Daughters Have Equal Rights In Ancestral Property, Even If They Were Born Before Enactment Of Hindu Succession Act, Holds Supreme Court

Daughters Have Equal Rights In Ancestral Property, Even If They Were Born Before Enactment Of Hindu Succession Act, Holds Supreme Court [Read Judgment] Feb 4th 2018, 09:07, by Sukriti Manu Sebastian The Supreme Court has held that daughters who were born before the enactment of Hindu Succession Act 1956 are entitled to equal shares as son in ancestral property.  The ruling was rendered in an appeal filed by daughters challenging a decree in a partition suit, which excluded them from partition.  The partition suit was filed by the grandson of the deceased propositus of a joint family in 2002. The Trial Court held that daughters were not entitled to share in property, as they were born before 1956, the year of enactment of Hindu Succession Act. The Trail Court also denied them the benefit of 2005 amendment, which conferred equal coparcenary status to daughters as sons.  The High Court upheld the decree of the Trial Court. The Supreme Court held that the Courts below erred in holding that daughters were not entitled to partition because they were born before 1956. It was held that according to Section 6 of the Act ,when a coparcener dies leaving behind any female relative specified in Class I of the Schedule to the Act(which includes a daughter), his undivided interest in the Mitakshara coparcenary property would not devolve upon the surviving coparcener by survivorship but upon his heirs by intestate succession.  Therefore, the interest of the deceased coparcener would devolve by intestate succession on his heirs, which included his daughters. The Court also held that the daughters were entitled to the benefit of 2005 amendment as well, and on that basis also they were entitled to shares.  It was settled in Prakash v. Phulavati (2016) 2 SCC 36 rights under the amendment area available to daughters living on the date of amendment, irrespective of when they were born.  In the instant case, the bench comprising Justice A.K Sikri and Justice Ashok Bhushan explained it further, and stated that the amendment declared that a daughter ‘shall by birth’  became coparcener in her own right in the same manner as son. Hence, the daughter will get coparcenary right by virtue of the amendment, ‘since birth’. It was observed as follows :- Section 6, as amended, stipulates that on and from the commencement of the amended Act, 2005, the daughter of a coparcener shall by birth become a coparcener in her own right in the same manner as the son. It is apparent that the status conferred upon sons under the old section and the old Hindu Law was to treat them as coparceners since birth. The amended provision now statutorily recognizes the rights of coparceners of daughters as well since birth. The section uses the words in the same manner as the son. It should therefore be apparent that both the sons and the daughters of a coparcener have been conferred the right of becoming coparceners by birth. It is the very factum of birth in a coparcenary that creates the coparcenary, therefore the sons and daughters of a coparcener become coparceners by virtue of birth. Devolution of coparcenary property is the later stage of and a consequence of death of a coparcener. The first stage of a coparcenary is obviously its creation as explained above, and as is well recognized. Also, the fact that the partition suit was filed in 2002 was held to be inconsequential. The Court stated that so far as partition suits are concerned, the partition becomes final only on the passing of a final decree. The decree was passed in 2007. Here, the rights of the daughters got crystallised in 2005, and hence the Trial Court ought to have taken into account that aspect while passing decree in 2007. The Court also observed that 2005 amendment was brought in on the touchstone of equality, thus seeking to remove the perceived disability and prejudice to which a daughter was subjected. The fundamental changes brought forward about in the Hindu Succession Act, 1956 by amending it in 2005, are perhaps a realization of the immortal words of Roscoe Pound as appearing in his celebrated treaties, The Ideal Element in Law, that “the law must be stable and yet it cannot stand still. Hence all thinking about law has struggled to reconcile the conflicting demands of the need of stability and the need of change.- the Bench observed. Hence, it was held that shares will devolve on the daughters as well. Read the Judgment Here

Mortgagees Right To Sell: Past Situation

Mortgagees Right To Sell: Past Situation
The power of the mortgagee to sell without intervention of the court, before the incorporation of such right under Section 69 of the Transfer of Property Act, 1882, was a subject-matter of controversy and divergent views.

This power of sale, a feature of the English mortgage was originally confined to Englishmen or to Indian residents in the Presidency Towns who were conversant with the forms of English mortgage and English law and procedure as administered in the Presidency Towns. In the mofussil, prior to the Transfer of Property Act, there were certain regulations governing the law of mortgages between the parties who were not Europeans. Those regulations did not empower the mortgagee to effect sale of the mortgaged property without the intervention of the court.

Section 69 of the Transfer of Property Act, 1882, was modelled on the English Conveyancing Act, 1881 and the English Law of Property Act, 1925. Section 69 was later remodelled by amending Act 20 of 1929 drawing the principles from the English law.

Section 69 of the Transfer of Property Act, 1882 contains five sub-sections. Sub-sections (1) and (2) as detailed hereunder, deal with the circumstances under which the mortgagee's right to exercise the power of sale without the intervention of the court arises. Sub-sections (3) and (4) respectively dwell on the title of the purchaser from the mortgagee and the manner of deployment of sale proceeds of the mortgaged property by the mortgagee, his duties and responsibilities. Sub-section (5) states that nothing in this section applies to powers conferred before the first day of July, 1882.


The right under Section 69 is as much and as full a right as the right of redemption of the mortgagor. The mortgagee is, in no sense, a trustee for the mortgagor in the matter of the power of sale; as he holds it for protection of his interest and for his benefit. The mortgagee is not debarred from exercising the power of sale, even though the mortgagor files a suit for redemption. So long as the mortgage money is not paid or validly tendered, the mortgagee with full knowledge of a pending suit for redemption and even to defeat the suit can enforce his power of sale under this section.

While clauses (b) and (c) of sub-section (1) require that power of sale without intervention of the court must be expressly conferred on the mortgagee by the mortgage deed, no such conditions need be fulfilled, where the mortgage is an English mortgage and neither of the parties is Hindu, Mohammedan or Buddhist or any sect, race etc., as stipulated under clause (a) of sub-section (1).

Power of sale without intervention of court

The words "power of sale" refer to a clause expressly included in the mortgage deed. They mean conveyancing. The expression has not been defined in the Act. It includes all steps which are necessary to be taken in connection with a sale. The law permits the greatest freedom of contract, unless it is expressly taken away. If any party contends that a particular clause restricts, in any way, the power of parties to enter into a contract, the burden rests on him to show that the words prevent an agreement between the parties.

The power of sale, under Section 69, can be exercised only in the three cases mentioned in clauses (a), (b) and (c) of sub-section (1). The situation of the property is immaterial in cases falling within clauses (a) and (b).

A mortgagee has no right of sale if there is no default in payment of the mortgage money. There can be default in payment of mortgage money only after it has become due, and not before. In cases, where no time is fixed for payment of the mortgage money, there must be a demand for payment before it can be said that the mortgagor has made a default in payment of the mortgage money. It has been held in Purasawalkam Hindu Janopakara Saswatha Nidhi Ltd. v. Kuddus Sahib that where the amount due for principal is not repayable at any particular date, nor is anything stated as to when it is to be repaid, there can be no default in the payment of the principal sum due until there is a demand made for the money.

Section 69(1) (a)

The first case in which the mortgagee can have the power to sell is mentioned in clause (a) of sub-section (1) of Section 69 of the Transfer of Property Act, 1882. It lays down the following conditions for the acquisition of the power, namely: (1) that the mortgage must be an English mortgage, as defined in Section 58(e) of the Transfer of Property Act, 1882, and (2) neither the mortgagor nor the mortgagee must be-
(i) a Hindu, Mohammedan or Buddhist, or
(ii) a member of any other race, sect, tribe, or class from time to time specified in this behalf by the State Government in the Official Gazette.

The power of sale is inherent in the mortgagee, if Conditions (i) and (ii) mentioned above are satisfied. Thus it can be exercised where an English mortgage is executed by a company, which can be said to have no religion3 In L.V. Apte v. R.G.N. Price, the A.P. High Court applied Section 69 to an English mortgage between a company and trustees for debenture-holders, some of the trustees being Hindus.

Section 69(1) (a) is confined only to a select sect of mortgagors and mortgagees who do not belong to the majority communities in India. This section is taken advantage of by corporate bodies who are not natural persons since such bodies are not deemed to belong to any religion. As far as individuals are concerned, this section can be adopted if both the mortgagor and mortgagee do not belong to the religion, race, sect, tribe or class which are excluded from the purview of Section 69(1) (a).

If the conditions in Section 69(1) (a) and Section 69(2) are complied with, mortgagee's power of sale arises suo motu.

It is opined that Section 69(1) (a) is outdated in the present circumstances since the stipulations cannot be applied to the commercial transactions like mortgages, in letter and spirit. No community can be compelled to exclude themselves from a particular commercial venture as it would affect their constitutional rights.

Sections 69(1) (b) and 69(1) (c)

The words "expressly conferred" in clauses (b) and (c) indicate that the inherent power available under clause (a) is not available under clauses (b) and (c).

To bring a case under Section 69(1) (b), it is necessary to establish that

(i) a power of sale without the intervention of the court is expressly conferred on the mortgagee by the mortgage deed, and
(ii) the mortgagee is Government. This clause is applicable only where the mortgagee is the Government and does not extend to any other person. It applies both to the State Governments and the Central Government.

Section 69(1) (c) requires that

(i) a power of sale without the intervention of the court must have expressly been conferred on the mortgagee by the mortgage deed, and

(ii) the mortgaged property, or any part thereof, must, on the date of the execution of the mortgage deed, have been situate within the towns of Calcutta, Madras, Bombay or in any other town, or area, which the State Government may, by notification in the Official Gazette, specify in this behalf.

It is observed that the three cases mentioned in clauses (a), (b) and (c) of sub-section (1) of Section 69 of the Transfer of Property Act are independent and mutually exclusive. Clause (a) applies only where the mortgage is an English mortgage and the parties do not belong to certain religions, or sects, etc. Clause (b) applies to cases where the mortgagee is the Government. Under clauses (a) and (b), it is not necessary that the property mortgaged should be situated in any particular place. It may be situated in any part of India. But an essential condition of clause (c) is that the mortgaged property must be situated within any of the towns or area, specified in the clause.

Conditions for exercise of power

Section 69(2) (a) and Section 69(2) (b) specify the conditions for exercise of the power. These conditions are imperative and cannot be varied by an agreement between the parties. The power to exercise the right of sale arises when

(i) (a) notice in writing requiring payment of the principal money has been served on the mortgagor, or on one of several mortgagors, and

(b) default has been made in payment of the principal money, or of part thereof, and

(c) such default has continued for three months after such service; or

(ii) some interest under the mortgage amounting at least to five hundred rupees is (a) in arrear, and (b) remains unpaid for three months after becoming due.

Conditions (i) and (ii) are in the alternative. It is sufficient if any one of them is fulfilled.

The power of sale under Section 69(1) can be exercised by the mortgagee only when the conditions under Section 69(2) are fulfilled.

No notice is necessary when default is made for the payment of interest. It is sufficient that interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due.

Notice cannot be waived

The notice required by Section 69(2) (a) is not only necessary but is imperative and even the period of three months cannot be curtailed by agreement of the parties.

The Supreme Court in Narandas Karsondas v. S.A. Kamtam held that the conferment of power on mortgagee to sell without intervention of the court in a mortgage deed by itself will not deprive the mortgagor of his right of redemption. The equity of redemption is not extinguished by mere contract for sale. Therefore, until sale is complete by registration the mortgagor does not lose his right of redemption. In view of the fact that only on execution of conveyance ownership passes from one party to another, it cannot be said that the mortgagor lost the right of redemption just because the property was put to auction. The mortgagor has a right to redeem unless the sale of property was complete by registration in accordance with the provisions of the Registration Act.

Section 69(1)(a) of the Transfer of Property Act, 1882 unduly excludes the majority communities in India from exercising the power of sale available for an English mortgagee. This section appears to have been enacted only for the transactions between mortgagors and mortgagees who are English people or people of English origin.

Section 69(1) (a)a blot on statute

When the debate on uniform civil code in India is hotting up amongst the law-makers and the general public, retention of Section 69(1) (a) of the Transfer of Property Act, 1882 is a blot on the statute-book. This section is a clear discrimination between religious communities in commercial transactions in India.

Section 69(1) (a) of the Transfer of Property Act, 1882 has lost its relevance in the present-day secular circumstances. English mortgage is rarely resorted to by the lenders like banks in view of the religious discrimination in the section itself and stamp duty and registration expenses being heavy to be borne by the mortgagors.

It is suggested that an amendment to Section 69 of the Transfer of Property Act is the need of the hour deleting the portion regarding restriction of the power of sale without intervention of the court only to certain religious communities.

The power of sale under Section 69(1) (c) of the Transfer of Property Act can be exercised only when the mortgaged properties are situated within certain towns. The restriction in respect of location of the properties within certain towns for the purpose of Section 69(1) (c) might have been a carefully considered decision at the time when the section was inserted into the Act. It protects the gullible rural masses from the usurious moneylenders. Since then, the situation has undergone changes and the people in the rural sector are prudent enough to know the implications of mortgage transactions.

Mortgagees Right To Sell: Present Situation

At present, an attempt has been made to change the situation by passing the “Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of 2002)”, which protects the interests of the banks and other financial institutions by providing ways to recover their amounts by selling the assets of the mortgagor.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, fondly called by bankers as Securitisation Act, has recently been enacted conferring powers on banks and financial institutions, if they are secured creditors, to realize the securities by sale etc., without intervention of court. The Act contains a provision overriding the provision of Section 69 of the Transfer of Property Act, 1882. Sub-section (1) of Section 13 of the said Act reads as under:

"13. (1) Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the intervention of court or tribunal, by such creditor in accordance with the provisions of this Act."

The provisions of the Act have been made applicable exclusively to banks and financial institutions as secured creditors to enforce their security interest with a view to recovering their debts. That is, if the banks and financial institutions are secured creditors having lent against securities like mortgage of immovable property, charge, hypothecation they can take over and sell such securities after giving 60 days' notice to the borrowers so as to adjust the loan, without resort to litigation in a competent court of law. The provisions of the Act cannot be considered to have been extended to the secured creditors in general. In a nutshell, the provisions of Section 69 of the Transfer of Property Act, 1882 can be ignored by the banks and financial institutions in the matter of recovery of their debts ex curia whereas other creditors have to file a suit in a competent court for recovery of the loan. Otherwise, Section 69 of the Transfer of Property Act, 1882 still remains on the statute and is applicable to other creditors who are not banks and financial institutions. The banks and financial institutions are empowered to short-circuit the legal process to enforce the securities for recovery of their loans while the other creditors such as individuals, association of persons have to undergo the rigmorale of court proceedings. This is a clear discrimination endowing one section with legal favouritism and depriving similarly placed others of such right. Hence the suggestion for the amendment to make the law uniform to all creditors who have lent against mortgage securities.

It is suggested that the stipulation of certain notified towns in Section 69(1) (c) of the Transfer of Property Act, 1882 should be deleted by an amendment since such a stipulation does not have any sanctity or reasonable purpose in the present circumstances.

Recourse to legal proceedings through a court of law for recovery of debts, though secured by mortgage, is not only time-consuming but expensive too. The suggested amendment to Section 69 of the Transfer of Property Act, 1882 will result in enforcement of mortgage security by the mortgagee without resort to court proceedings and will, to some extent, disburden the courts from the current scenario of docket explosion so that the other cases can be adjudicated as expeditiously as possible.

Conclusion
After going through this project, I have come to the conclusion that, section 69(1) (a) of the Transfer of Property Act, 1882 has lost its relevance in the present-day secular circumstances. English mortgage is rarely resorted to by the lenders like banks in view of the religious discrimination in the section itself and stamp duty and registration expenses being heavy to be borne by the mortgagors.

This is because, section 69(1) (a) of the Transfer of Property Act, 1882 unduly excludes the majority communities in India from exercising the power of sale available for an English mortgagee. This section appears to have been enacted only for the transactions between mortgagors and mortgagees who are English people or people of English origin.

Therefore, I have come to the conclusion that an amendment to Section 69 of the Transfer of Property Act is the need of the hour, deleting the portion regarding restriction of the power of sale without intervention of the court only to certain religious communities.


Further, as regards the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 is concerned, there is a clear discrimination endowing one section with legal favouritism and depriving similarly placed others of such right. Hence I would suggest for the amendment to make the law uniform to all creditors who have lent against mortgage securities. This is because this Act is applicable only to banks and financial institutions and not to other types of creditors.

Further, recourse to legal proceedings through a court of law for recovery of debts, though secured by mortgage, is not only time-consuming but expensive too. The suggested amendment to Section 69 of the Transfer of Property Act, 1882 will result in enforcement of mortgage security by the mortgagee without resort to court proceedings and will, to some extent, disburden the courts from the current scenario of docket explosion so that the other cases can be adjudicated as expeditiously as possible.

Therefore, in my view there is an urgent need to amend the provisions of sec.69 of the "Transfer of Property Act, 1882", so that the interest of the secured creditors can be realized more fruitfully and without much delay and harassment.

The author can be reached at: rks_nlu@legalserviceindia.com / Print This Article

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All HUF Assets Should Be Taken As Joint Property Unless Proven Otherwise: SC

All HUF Assets Should Be Taken As Joint Property Unless Proven Otherwise: SC [Read Judgment] Sep 15th 2017, 04:32, by Sukriti The Supreme Court recently reiterated the principle that all assets in a Hindu Undivided Family would be presumed to be joint property belonging to all its members and that the burden to prove otherwise is on the family member asserting such claim. “It is a settled principle of Hindu law that there lies a legal presumption that every Hindu family is joint in food, worship and estate and in the absence of any proof of division, such legal presumption continues to operate in the family. The burden, therefore, lies upon the member who after admitting the existence of jointness in the family properties asserts his claim that some properties out of entire lot of ancestral properties are his self-acquired property,” the Bench comprising Justice R.K. Agrawal and Justice Abhay Manohar Sapre observed. The Court was hearing an Appeal challenging an order passed by the Karnataka High Court in a family dispute pertaining to ownership and partition of agricultural lands. The Apex Court upheld the High Court’s order which had declared the property as joint property of the family. The Court opined that the Appellants had failed to prove that the property was self acquired and observed, “In order to prove that the suit properties described in Schedule ‘B’ and ‘C’ were their self-acquired properties, the plaintiffs could have adduced the best evidence in the form of a sale-deed showing their names as purchasers of the said properties and also could have adduced evidence of payment of sale consideration made by them to the vendee. It was, however, not done. Not only that, the plaintiffs also failed to adduce any other kind of documentary evidence to prove their self-acquisition of the Schedule ‘B’ and ‘C’ properties nor they were able to prove the source of its acquisition.” It, therefore, upheld the judgments passed by the lower Courts and observed, “In our considered opinion, it was, therefore, obligatory upon the plaintiffs to have proved that despite existence of jointness in the family, properties described in Schedule ‘B’ and ‘C’ was not part of ancestral properties but were their self-acquired properties. As held above, the plaintiffs failed to prove this material fact for want of any evidence. We have, therefore, no hesitation in upholding the concurrent findings of the two Courts, which in our opinion, are based on proper appreciation of oral evidence.” Read the Judgment Here

Certificate Of Purchase Can’t Be Conclusive Proof Of Title In Case Of Joint Family Property: Bombay HC

Certificate Of Purchase Can’t Be Conclusive Proof Of Title In Case Of Joint Family Property: Bombay HC [Read Judgment]

Jun 21st 2018, 15:33, by Sukriti

Nitish Kashyap

The Bombay High Court has held that certificate of purchase cannot be conclusive proof of title vis-à-vis joint tenants of a land.

Justice Anuja Prabhudessai held that in case of a joint family property, the certificate of purchase issued in the name of karta or an elder of the family is actually for or on behalf of the joint family.

Case Background

The court was hearing an appeal against judgment of a Joint District Judge, Thane, dated January 24, 1990, wherein compensation for sale of a land in Thane was directed to be divided equally between descendants of co-tenants Vithu and Gajanan.

The government acquired the said piece of land measuring 1 acre 26 gunthas and 8 annas in 1973 for Rs. 57,000 approximately.

Changa Agaskar was the original tenant of the said land and after his death, his two sons, Vithu and Gajanan, used to cultivate the land together as a joint family property.

Vithu claimed that he had purchased the said land in the proceedings under Section 32(G) of the Bombay Tenancy & Agricultural land Act. He further claimed that upon paying the purchase price, the certificate of purchase under Section 32 M of the Act was issued in his favour on July 20, 1966. The original claimant, therefore, claimed that being the exclusive owner, he was entitled to receive the entire compensation amount.

However, descendants of Gajanan claimed that the land was never partitioned and that even after the death of Changa and Gajanan, they continued to cultivate the land as a joint family property. The respondents denied that Vithu was the sole tenant/purchaser of the property. They have stated that Vithu had paid the purchase price of the acquired land out of the sale proceeds of the joint family land. The respondents, therefore, claimed that being the co-tenants of the property, they were entitled to 50 percent of the compensation.

Judgment

After examining the Bombay Tenancy and Agricultural Land Act, the court noted that it is clear that an undivided Hindu family can be a tenant within the meaning of Section 2(18) of the Act. Thereafter, the court looked at the land survey records, mutation entries and said:

“It is thus clear that the original claimant Vithu was not a tenant of the said land in his personal or individual capacity but had only inherited the tenancy rights upon the death of Changa. The original claimant Vithu had therefore failed to prove that he was the sole tenant of the said property. The claimant had also not adduced evidence to prove that the subject property was partitioned during the lifetime of Vithu and Gajanan or that they were cultivating the property or their respective shares separately. The reference court was therefore perfectly justified in holding that the acquired land was a joint family property.”

The land records revealed that the original claimant Vithu had subsequently got his name entered in the survey records, by bracketing the name of Gajanan. He had also purchased the property under Section 32G and a certificate of purchase was issued in his name. It is to be noted that no notice was given to the respondents before deleting/bracketing the name of Gajanan from the survey records, the court said.

Thus, the court rejected the appeal against judgment of the District Judge in Thane and said:

“Under such circumstances, the certificate of purchase issued in the name of Vithu, would be for and on behalf of the joint family. The said certificate would at the most be conclusive proof of purchase against the owner of the land. The tenancy rights of the joint tenants cannot be negated solely on the ground that the certificate of purchase was issued in favour of Karta of a joint family or any elderly person of a joint family. Hence, the certificate of purchase cannot be the conclusive proof of title, vis-a-vis the joint tenants.”

Read the Judgment Here

Once a Mortgage, Always a Mortgage

Punjab-Haryana High Court

Ram Kishan And Ors. vs Sheo Ram And Ors. on 12 December, 2007

Equivalent citations: AIR 2008 P H 77, (2008) 149 PLR 1

Author: H Gupta

Bench: U N Singh, H Gupta, R Bhalla

JUDGMENT Hemant Gupta, J.

1. The appellant, a mortgagee, filed a suit for declaration to the effect that they have become owners of the agricultural land measuring 13 Kanals 6 Marias by prescription. The case set up was that one Ami Chand son of Devi Singh mortgaged with possession agricultural land measuring 14 Bighas for a sum of Rs. 80/- with Hardhan Singh son of Jit Ram on 11.8.1903. During consolidation operations, the land measuring 13 Kanals 6 Marias was allotted in lieu of the original mortgaged land. The plaintiff claims to be in continuous possession of the suit land as mortgagees, whereas Munshi Ram, predecessor-in-interest of defendants, was recorded as mortgagor. The mortgagees sought the declaration on the ground that the suit land has not been got redeemed during the period of more than 60 years and, therefore, the defendants have lost all right, title and interest in it. Though the defendant denied the factum of mortgage, but the trial Court returned a finding that it was a case of usufructuary mortgage and no period for payment of mortgage amount was fixed. It was observed that it is not the case of the plaintiff that they had made a demand for mortgage amount, which was refused by the defendant. Thus, no cause of action had accrued to the plaintiff which could only accrue on demand of the mortgage amount from the defendants and refusal of the same by the defendants. The trial Court, thus, dismissed the suit holding that the plaintiffs have not become owners of the suit land.

2. The appeal against the judgment and decree passed by the learned trial Court was also dismissed and hence, the mortgagees are in second appeal claiming declaration in respect of their ownership over the suit property.

3. Initially this appeal was admitted to D.B. in view of the important questions of law likely to arise in many cases. Later, in Regular Second Appeal No. 893 of 2006, the mortgagee, who was in appeal, raised an argument that in case of usufructuary mortgage, where no time limit is fixed to seek redemption, the time to seek redemption will arise on the date of mortgage itself. The said appeal was admitted to Division Bench in view of the important question of law. Many other appeals were ordered to be heard with these appeals.

4. The Division Bench while hearing the present appeal along with other appeals framed the following questions for opinion of the larger Bench:

1. Whether the right to seek redemption would arise on the date of mortgage itself in case of usufructuary mortgage when no time limit is fixed to seek redemption?

2. Whether there is any time limit in the case of a usufructuary mortgagor to get his property redeemed?

5. The Transfer of Property Act, 1882 (for short 'the Act') is as such not applicable to the States of Punjab and Haryana. Sections 54, 107 and 123 of the Act were extended to the then State of Punjab with effect from 1.4.1955 and to the Pepsu area of the State of Punjab with effect from 15.5.1957. Section 59 was extended to whole of Punjab with effect from 10.6.1968. Section 58(g) of the Act, has been extended to district headquarters in the State of Punjab vide notifications dated 28.8.1975; to all the block headquarters vide notification dated 23.6.1979; Mandi Gobindgarh in District Fatehgarh Sahib and Mohali in Ropar vide notification dated 28.5.2001.; The provisions of Sections 59 and 58(f) have been extended to the State of Haryana with effect from 5.8.1967 and 10.5.1972, respectively. Section 58 of the Act was extended to the area of Chandigarh with immediate effect vide notification dated 18.12.1982. The provisions of Section 118 of the Act were extended to urban area of the State of Punjab vide notification dated 10.8.1989.

6. The facts remains that the provisions of Section 58(d) of the Act and other provisions in respect of usufructuary mortgage have not been made applicable to the areas falling within the jurisdiction of this Court, though such mortgages are required to be made by way of registered document in the State of Punjab w.e.f. 10.6.1968 and from 5.8.1967 in the State of Haryana. It is also equally well settled that if the provisions of the Act are not applicable to the area, the principles of justice, equity and good conscience are to be applied while determining the rights of the parties.

The Constitution Bench of the Hon'ble Supreme Court in Murari Lal v. Dev Koran , considered the question "Does the equitable doctrine ensuing the mortgagors equity of redemption in spite of a clog created on such equity by stipulation in the mortgage deed apply to the present case? That was a case arising from Alwar (Rajasthan) where the provisions of the Act did not apply. The Court concluded as under:

These decisions show that the High Courts in India conformed to the view that whether or not there is a statutory provision directing the Judges to give effect to the principles of justice, equity and good conscience, it is their duty to enforce that principle where they are dealing with stipulations introduced in mortgage transactions which appear to them to be unreasonable, oppressive or unjust.

xxx xxx xxx ...In fact, in Namdeo Lokman Lodhi v. Narmadabai this Court has emphatically observed that it is axiomatic that the courts must apply the principles of justice, equity and good conscience to transactions which come before them for determination even though the statutory provisions of the Transfer of Property Act are not made applicable to these transactions. These observations, in substance, represent the same traditional judicial approach in dealing with oppressive, unjust and unreasonable restrictions imposed by the mortgagees on needy mortgagors when mortgage documents are executed.

7. In the judgment reported as Harbans Singh and Anr. v. Guran Ditta Singh and Anr. , the Hon'ble Supreme Court while dealing with the mortgage in a case arising out of Punjab, held to the following effect:

We hold that applying the principle of justice, equity and good conscience though Section 60 of the Transfer of Property Act per se did not apply, the principles of Section 60 would apply. Though the application for redemption was dismissed under Section 11 of the Act and became conclusive under Section 12 the mortgagor's right to redemption is not barred. A suit for redemption under Section 60 of Transfer of Property Act will be maintainable and civil court has jurisdiction to grant the decree of redemption.

Thus, the provisions of the Act in respect of usufructuary mortgage are required to be interpreted keeping in view the principles of justice, equity and good conscience and keeping in view the fact that the stipulations introduced in the mortgage transactions are not unreasonable, oppressive and unjust.

8. The relevant provisions contained in Sections 58(a), 58(d), 60, 62, 67 of the Act and Articles 61, 62 and 63 of the Limitation Act, 1963 (hereinafter to be referred as "the Limitation Act"), are being reproduced as under:

58. "Mortgage", "mortgagor", "mortgagee", "mortgage-money" and "mortgaged" defined, (a) A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.

xxx xxx xxx

(d) Usufructuary mortgage-Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee.

xxx xxx xxx

60. Right of mortgagor to redeem At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, to require the mortgagee (a) to deliver to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee, (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:

Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of a court. (emphasis supplied) xxx xxx xxx

62. Right of usufructuary mortgagor to recover possession In the case of a usufructuary mortgage, the mortgagor has a right to recover possession of the property together with the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee,-

(a) where the mortgagee is authorised to pay himself the mortgage-money from the rents and profits of the property,-when such money is paid;

(b) where the mortgagee is authorised to pay himself from such rents and profits or any part thereof a part only of the mortgage-money, when the term (if any) prescribed for the payment of the mortgage-money has expired and the mortgagor pays or tenders to the mortgagee the mortgage money or the balance thereof or deposits it in court hereinafter provided.

xxx xxx xxx

67. Right to foreclosure or sale In the absence of a contract to the contrary, the mortgagee has, at any time after; the mortgagemoney has become due to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgage-money ha& been paid or deposited as hereinafter provided, a right to obtain from the Court a decree that the mortgagor shall be absolutely debarred of his right to redeem the property, or a decree that the property be sold.

A suit to obtain a decree that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.

Nothing in this section shall be deemed-

(a) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee under an anomalous mortgage by the terms of which he is entitled to foreclose, to institute a suit for foreclosure, or a usufructuary mortgagee as such or a mortgagee by conditional sale as such to institute a suit for sale; or Articles 61, 62 and 63 of the Limitation Act, 1963

61. By a mortgagor-

(a) to redeem or recover possession of immovable property mortgaged; Thirty years When the right to redeem or to recover possession accrues.

(b) to recover possession of immovable property mortgaged and afterwards transferred by the mortgagee for a valuable consideration; Twelve years When the transfer becomes known to the plaintiff.

(c) to recover surplus collections received by the mortgagee after the mortgage has been satisfied.

Three years When the mortgagor re-enters on the mortgaged property.

62. To enforce payment of money secured by a mortgagee or otherwise charge upon immovable property.

Twelve years When the money used for become due. 63. By a mortgagee-

(a) for foreclosure, Thirty years When the money secured by the mortgagee become due.

(b) for possession of immovable property mortgaged.

Twelve years When the mortgagee becomes entitled to possession.

9. The primary reliance of the learned Counsel for the appellant is on the judgment of the Hon'ble Supreme Court in Prabhakaran and Ors. v. M. Azhagiri Pillai and Sampuran Singh and Ors. v. Niranjan Kaur (Smt.) and Ors. , to contend that in case of usufructuary mortgage, where no time limit is fixed for redemption, the right to redeem will accrue to the mortgagor on the date of mortgage itself and therefore, failure to redeem the mortgage within the period prescribed under Article 61 of the Act will lead to closure of the option of the mortgagor to seek redemption. Thus, the appellants are entitled to the declaration in respect of their title over the suit property. Reference is also made to the Full Bench judgment of this Court reported as Shri Chand and Ors. v. Nathi (1983) 85 P.L.R. 288; Satnam Singh alias Shamsher Singh and Ors. v. Roshan Lal and Ors. 986 P.L.J. 504 and B. Ramman Lal v. Raghunath Shanker and Anr. A.I.R. 1941 Allahabad 56, to contend that the right of redemption in the cases of usufructuary mortgage, where no time limit is fixed arises on the date of mortgage itself. It is contended that in terms of Section 60 of the Act, the failure to redeem the property within the time prescribed, entitles a mortgagee to seek declaration to debar a mortgagor to seek redemption as contemplated in the proviso of the aforesaid Section. It is also argued that the principle that once a mortgage is always a rhortgage means that once a transaction is in the form of mortgage, it cannot be converted into any other transaction even of by the acts of the parties and that dehors the provisions of the statute and principles of law, the nature of the transaction as a mortgage would remain intact till the period of limitation alone.

10. On the other hand, learned Counsel for the mortgagor-respondents relied upon Ganga Dhar v. Shankar Lal and Ors. , Jayasingh Dnyanu Mhoprekar and Anr. v. Krishna Babaji Patil and Anr. ; Panchanan Sharma v. Basudeo Prasad Jaganani and Ors. and Harbans v. Om Prakash and Ors. , to contend that the usufructuary mortgagor has a right to redeem the property at any point of time in a case where no time limit is fixed for redemption. It is contended that in case where time limit is fixed, the right of redemption will arise on the date fixed for redemption but where no time limit is fixed, the mortgagor has the right to seek redemption at any time on payment of the mortgage debt.

11. Before we refer to the judgments cited by the counsel for the parties and other precedents in respect of the issues arising in the present appeal, we would like to refer certain general principles in respect of usufructuary mortgage.

12. In Santley v. Wilde 1895-89 All India England Reports 1338, a judgment of Court of appeal, it has been held as under:

The principle is this : a mortgage is a conveyance of land or an assignment of chatties as a security for the payment of debt or the discharge of some other obligation for which it is given. This is the idea of a mortgage and the security is redeemable on the payment or discharge of such debt or obligation, any provision to the contrary notwithstanding. That, in my opinion, is the law. Any provision inserted to prevent redemption on payment or performance of the debt or obligation for which the security was given is what is meant by a clog or fetter on the equity of redemption and is therefore void. It follows from this, that "once a mortgage always a mortgage". xx xx xx xx The courts of equity have fought for years to maintain the doctrine that a security is redeemable on the performance of the obligation for which it was given. If the obligation is the payment of debt, the security is redeemable on the payment of that debt. That in my opinion is the true principle applicable to the cases, and that is what is meant when it is said that there must not be any clog or fetter on the equity of redemption.

In authoritative commentary on the Act, by Mulla (9th Edition), certain statements are relevant. They read as follows:

In an usufructuary mortgage, a transfer is made of the right of possession and enjoyment of the usufruct. The rights of a usufructuary mortgagee forms part of the bundle which constitute ownership. The remainder still remains with the mortgagor and can be transferred by him. The mortgagor' right is as indicated in section 60 of the Act i.e. after the principal money has become due, the mortgagor has a right to pay the mortgage money and on such payment, he has the right to require the mortgagee to deliver possession. This right cannot be extinguished except by the act of parties or by a decree of a Court. This right is called the right to redeem and a suit to enforce it is called a suit for redemption. Thus the scope of a suit for redemption is preliminary to enforce the right to make a payment of the mortgage money. A claim to redeem a mortgage actually does not attach to the land, although the decree passed in the suit may ultimately affect possession which is also an interest in land. The section is not prefaced by any such words as 'in the absence of a contract to the contrary'. The right of redemption is therefore a statutory right which cannot be fettered by any condition which impedes or prevents redemption. Any such condition is void as a clog on redemption"

xxx xxx xxx ...The mortgagor' right of redemption is exercised by the payment or tender to the mortgagee at the proper time and the proper place, of the mortgage money. When it is extinguished by the act of parties, the act must take the shape and observe the formalities which the law prescribes. The expression act of the parties' refers to some transaction subsequent to the mortgage and standing apart from the mortgage transaction. A usufructuary mortgagee cannot by mere assertion of his own or by a s unilateral action on his part, convert his position on moiety of the property as mortgagee into that of an absolute owner....

13. The authoritative work of Dr. Rashbehary Ghose's "Law of Mortgage", which has received the approval of the Full Bench of Lahore High Court in Lachhman Singh v. Natha Singh through Harnam Singh and Ors. A.I.R. 1940 Lahore 401 and recently in Achaldas Durgajit Oswal (Dead) through LRs. v. Ramvilas Gangabisan Heda (dead) through LRs. and Ors. , the maxim 'once mortgage, always a mortgage has been explained as under (Eighth Edition - Page Nos. 280-281) under the heading "Once a Mortgage, always a mortgage":

In 1681 Lord Nottingham in the leading case of Harris v. Harris (1681) 1 Vern 33 firmly Lald down the principle: 'Once a mortgage,' always a mortgage.' This is a doctrine to protect the mortgagor's right of redemption:

It renders all agreements in a mortgage for forfeiture of the right to redeem and also encumbrances of or dealings with the property by the mortgagee as against a mortgagor coming to redeem. In 1902 the well-known maxim, 'once a mortgage, always a mortgage' was supplemented by the words and nothing but a mortgage' added by Lord Davey in the leading case of Noakes v. Rice 1902 A.C. 24 (H.L.) : (1900-3) A11. E.R Rep 34, in which the maxim was explained to mean 'that a mortgage cannot be made irredeemable and a provision to that effect is void'. The maxim has been supplemented in the Indian context by the words 'and therefore always redeemable', added by Justice Sarkar of the Supreme Court in the case of Seth Ganga Dhar v. Shankarlal .

It is thus evident that very conception of mortgage, involves three principles. First, there is the maxim: 'Once a mortgage, always a mortgage.' that is to say, a mortgage is always redeemable and if a contrary provision is made, it is invalid. And this is an exception to the aphorism, modus et conventio vincunt legem (custom and agreement overrule law). Secondly, the mortgagee cannot reserve to himself any collateral advantage outside the mortgage agreement. Thirdly, as a corollary from the first another principle may be deduced, namely, 'once a mortgage, always a mortgage, and nothing but a mortgage'. In other words, any stipulation which prevents a mortgagor from getting back the property mortgaged is void. That is, a mortgage is always redeemable.

The maxim 'once a mortgage, always a mortgage' may be said to be a logical corollary from the doctrine, which is the very foundation of the law of mortgages, that time is not of the essence of the contract in such transactions; for the protection which the law throws round the mortgagor might be rendered wholly illusory, if the right to redeem could be limited by contract between the parties For a very curious case mentioned in the books in which the mortgagor was permitted to redeem, although he had solemnly sworn on the Bible never to exercise the right, see Stistefl's case cited in East India Co. v. Atkyns Comyn 348. Right to redeem is an incident of a subsisting mortgage and is inseparable from it so that the right is co-extensive with the mortgage itself. The right subsists until it is appropriately and effectively extinguished either by the acts of the parties concerned or by a proper decree of the competent court.

14. With the said comments of the leading commentators on the subject, we revert to precedents on the subject. A Full Bench of the Lahore High Court in Lachhman Singh's case (supra) has delineated the characteristics of an usufructuary mortgage as under:

It will be seen that the characteristics of a usufructuary mortgage, as defined above, are: (1) that the possession of the mortgaged property is delivered, or agreed to be delivered, to the mortgagee; (2) that he is to appropriate the rents and profits either (a) in lieu of interest, or (b) towards the principal, or (c) partly in lieu of interest and partly in payment of the principal; (3) that in none of these cases the mortgagor incurs any personal liability to repay; and (4) as the mortgagor has not bound himself to repay (but may repay if and when he chooses) there can be no "forfeiture" and therefore the remedies by way of foreclosure or sale are not open to the mortgagee.

Thus, any personal liability on the part of mortgagor is excluded in case of usufructuary mortgage and a usufructuary mortgagee is not entitled to sue for sale of the property. If there is any stipulation to the contrary, the transaction ceases to be one of usufructuary mortgage and is described as anomalous mortgage. The Court proceeded to hold as under:

As stated in (2) above, usufructuary mortgages are of three kinds. Of these, the two described in (b) and (c) are self redeeming; the mortgagee has to look to the rents and profits only to re-pay himself and when his entire charge is so liquidated he must re-deliver possession of the mortgaged property to the mortgagor free from all encumbrances.

xxx xxx xxx The most common form of usufructuary mortgage however is that described in 2(a) above, and it is to this class that the mortgages in the cases before us belong. Here the rents and profits are to be set off against interest and the mortgagee is entitled to retain possession until such time as the mortgagor chooses to redeem on payment of the principal sum secured. This form' of mortgage has been in vogue in India since ancient times. It was known to the Hindu lawyers under the expressive name of bhog bandakam which literally means "mortgage (bandaka) by enjoyment (bhog)." It was a mortgage for an indefinite period, during which the mortgagee enjoyed the usufruct and the mortgagor was entitled to redeem at any time on payment of the principal. It retained its popularity during the Mughal period, especially among the Mohammedan creditors who by obtaining possession of property (as zer-i-peshgi lessee and under other similar names) and appropriating the rents and profits till redemption, could find a safe investment for their money without charging interest.

The Court concluded to the following effect:

It will be clear from the foregoing discussion that the principal characteristics of a usufructuary mortgage are that there is no personal liability of the mortgagor to pay, nor has the mortgagee a right to have the mortgaged property brought to sale.

xxx xxx xxx Judged in this light, it must be conceded that a usufructuary mortgagor is under no liability to mortgagee. He is under no legal obligation to pay; it is his option to redeem, if and when he chooses....

15. In Ramprasad v. Bishambhar Singh A.I.R. 1946 Allahabad 400, the Court while examining the provisions of Section 60 of the Act held that it applies to a case in which the mortgagor goes to the Court to obtain the return of his property on repayment of debt amount still due. On the other hand, Section 62 of the Act applies in the case of usufructuary mortgage. The mortgagor has a right to recover possession of the property when the principal money is paid off, where the mortgagee is authorized to pay himself the mortgage money out of the rents and profits of the property. It was held that is not a case of redemption at all. When the rents and profits of the mortgaged property discharge the principal amount secured by the mortgage, the mortgage came to an end and the correlative right arise in the mortgagor to recover possession of the property. The said judgment was affirmed by the Hon'ble Supreme Court in Prithi Nath Singh and Ors. v. Suraj Ahir and Ors. . A Division Bench of Batna High Court in Jadubans Sahai and Ors. v. Bahuria Phulpati Kuer and Ors. , considered the scope of Sections 60 and 62 of the Act. While considering Section 60 of the Act, it was observed that suit for redemption of a usufructuary mortgage necessarily involves a prayer for possession of the mortgaged property. It is essentially a suit for both redemption and possession of the mortgaged property. But, there may be cases where the mortgagor may claim only possession of the mortgaged property and for this provision has been made in Section 62 of the Act. The Court found that in terms of Clause (a) of Section 62 of the Act, the only relief which the mortgagor can claim is return of possession when by the contract between the parties, the mortgagee is authorised to recover the mortgage debt from usufruct of the property in mortgage. Clause (b) of Section 62 of the Act contemplates cases where the rents and profits of the mortgaged property are to be applied towards interest accruing due on the mortgage debt or towards principal or partly towards principal and partly towards interest. It was held that Section 62 of the Act comes into operation, where in terms of the contract between the parties, the mortgagee is authorised to appropriate the rent and profits of the mortgaged property towards partial deduction of either the principal amount or interest or both. The Court held to the following effect:

There may be cases where accounts may have to be taken before a redemption of the mortgage is granted. Wherever, the mortgagor claims satisfaction of the mortgage debt with the usufruct, the suit is not necessarily a suit for possession. In a pure redemption suit also there may be a prayer for account for redemption and for possession. If the mortgagor claims that the entire mortgage money had been satisfied and nothing is due on the basis of the mortgage, it is for the Court to determine whether or not there is satisfaction of the mortgage. Therefore, such an allegation is immaterial so far as the determination of the question whether the suit is one for possession or one for redemption is concerned. In my opinion, a suit purely for possession arises only when the case falls under Clause (a) of Section 62.

16. While considering the question that when limitation begins to run under Article 148 (now Article 61 of the Limitation Act, 1963), the Court found that if suit is for possession under Section 62 of the Act, the period of limitation starts from the date on which the right to recover possession accrues, and that will be after the mortgage money has been paid off in the circumstances mentioned in Section 62.

17. In Pomal Kanji Govindji and Ors. v. Vrajalal Karsandas Purohit and Ors. etc , the Court examined the principles of redemption of a mortgage and clog on equity of redemption. The Court observed that freedom of contract is permissible provided it does not lead to taking advantage of the oppressed or depressed people. The law must transform itself to the social awareness. Poverty should not be unduly permitted to curtail one's right to borrow money on the ground of justice, equity and good conscience on just terms. If it does, it is bad; whether it does or does not, must, however, depend upon the facts and the circumstances of each case. The Court proceeded to hold to the following effect:

26. It is a right of the mortgagor on redemption, by reason of the very nature of the mortgage, to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy it before the mortgage. If he is prevented from doing so or is prevented from redeeming the mortgage, such prevention is bad in law. If he is so prevented, the equity of redemption is affected by that whether aptly or not, and it has always been termed as clog. Such a clog is inequitable. The law does not countenance it....

27. These principles have been recognised by this Court in Ganga Dhar v. Shankar Lal (supra). It has also to be borne in mind that long term for redemption in respect of immovable properties was prevalent at a time when things and the Society were, more or less, in a static condition. We live in changing circumstances. Mortgage is a security of loan. It is an axiomatic principle of life and law that necessitous men are not free men. A mortgage is essentially and basically a conveyance in law or an assignment of chattels as a security for the payment of debt or for discharge of some other obligation for which it is given. The security must, therefore, be redeemable on the payment or discharge of such debt or obligation. Any provision to the contrary, notwithstanding, is a clog or fetter on the equity of redemption and, hence, bad and void. "Once a mortgage must always remain a mortgage", and must not be transformed into a conveyance or deprivation of the right over the property.

18. In terms of proviso to Section 60 of the Act, any mortgage including usufructuary mortgage can be extinguished only by act of the parties or by decree of the Court. The said expressions have been considered in numerous judgments. We shall examine the meaning of each of the expressions i.e., by act of the parties or by decree of the Court, in detail hereinafter.

Right of redemption when extinguished by a decree of the Court:

One of the earliest judgments examining the said expressions is Raghunath Singh and Ors. v. Mt. Hansraj Kunwar and Ors. 22 A.I.R. 1934 Privy Council 205. The question in the aforesaid case was whether on account of non payment of the mortgage amount in terms of the decree extinguishes the right of the mortgagor to seek redemption. In the aforesaid case, the plaintiff was granted time to deposit the mortgage amount and, in case of default, it was ordered that his case will stand dismissed. It was held to the following effect:

...The right to redeem is a right conferred upon the mortgagor by enactment, of which he can only be deprived by means and in manner enacted for that purpose, and strictly complied with. In the present case, the only basis for the claim that the right to redeem has been extinguished is Section 60; but in their Lordships' view the old decree cannot properly be construed as doing that which it does not purport to do, viz., as extinguishing the right to redeem.

No authority was cited to their Lordships in any way conflicting with the view which they have formed. 24 All. 44(2) was a case of a usufructuary mortgage. The proper decree in a suit to redeem such a mortgage ought to have provided that in default of redemption the property should be sold. In fact it provided that in a case of default the judgment should be deemed non-existent.

It was held by the Full Bench that a second redemption suit was maintainable....

19. The Federal Court in Thoda China Subnet Rao and Ors. v. Mattapalli Raju and Ors. 23 A.I.R. 1950 Federal Court 1, considered the judgment of Privy Council and found that the Civil Procedure Code dealt with the procedure relating to all suits. There was a special law which dealt with the rights of the mortgagors and mortgages and that substantive law was found to be in the Transfer of Property Act.

That substantive law provided only two ways in which the right of redemption can be extinguished and they were: (i) by act of the parties, (ii) by decree of the Court. It was held to the following effect:

In our opinion, the view of the Madras High Court is incorrect. We prefer the view taken by the Bombay High Court on this point. The right of redemption is an incident of a subsisting mortgage and it subsists so long as the mortgage itself subsists. As held by the Privy Council in Raghunath Singh's case 61 I.A. 362 A.I.R. (21) 1934 P.C. 205 the right of redemption can be extinguished by a decree, the decree should run strictly in accordance with the form prescribed for the purpose.

Unless the equity of redemption is so extinguished, a second suit for redemption by the mortgagor, if filed within the period of limitation, is not, therefore, barred. The Board expressly held that if the appellants failed to establish that the old decree extinguished the right to redeem, there was no ground for saying that the old decree operated as res judicata and the Courts are prevented from trying the second suit under Section 11, Civil P.C. They, therefore, held that the right to redeem was not extinguished by the procedural provisions contained in the Civil Procedure Code.

20. In K. Parameswaran Pillai (dead) v. K. Sumathi alias Jesis Jessie Jacquiline and Anr. , while considering the provisions of Order 34 Rules 7 and 8 of the Code of Civil Procedure, 1908 (hereinafter to be referred as "the Code"), it was held that by operation of Sub-rule (1) of Rule 8 where, before a final decree debarring the plaintiff from all rights to redeem the mortgaged property has been passed or before the confirmation of a sale held in pursuance of a final decree passed under Sub-rule (3) of Rule 8, the plaintiff makes payment into court of all amounts due from him, the final decree is discharged. It was further held to the following effect:

...The resultant operation of the law would be that in the case of usufructuary mortgage, the plaintiff need not make any application for extension of time fixed in the preliminary decree. The mortgage/defendant has no right to make an application to foreclose the right of the plaintiff or sale of hypotheca declaring that the plaintiff has been debarred from making payment in court or to proceed further. At any time before passing of final decree or confirmation of the sale held in pursuance of the final decree the plaintiff usufructuary mortgagor has been given right to make payment of the redemption money due under preliminary decree and the subsequent liability incurred thereon. The outer limit for making such payment is passing of the final decree or confirmation of the sale made in furtherance thereof. The final decree for foreclosure or sale or redemption in relation to other mortgages, the right of payment has been hedged with the duty to deposit the money declared or quantified in the preliminary decree within the time specified under the preliminary decree or extended period from time to time till final decree debarring the plaintiff from redemption etc is passed. The outer limit for a usufructuary mortgagor for making payment of the amount due under the preliminary decree, is passing of the final decree or the date of confirmation of the sale.

It was also held that in case of usufructuary mortgage Clause (a) of Sub-rule (3) of Rule 8 expressly excludes the right to the mortgagee to apply for foreclosure or sale or redemption. Necessary consequence is that so long as the right subsists, though there is delay in compliance of the condition imposed in the preliminary decree, the right of redemption to the mortgagor is not lost.

21. In Achaldas Durgaji Oswal (dead) v. Ramvilas Gangabisan Heda (dead) through L.Rs. and Ors. , the Court quoted with approval the principle of law authored by Dr. Rashbehary Ghose, as reproduced above, and other eminent writers and held to the following effect while considering the statutory right of mortgagee in terms of Section 60 of the Transfer of Property Act, 1882, and Article 61 of the Limitation Act, 1963:

20. The statutory provisions, as noticed herein before, are required to be construed having regard to the redeeming features of usufructuary mortgage, namely, (a) there is a delivery of possession to the mortgage, (b) he is to retain possession until repayment of money and to receive rents and profits or part thereof in lieu of interest, or in payment of mortgage-money, or partly in lieu of interest and partly in payment of mortgage-money, (c) there is redemption when the amount due is personally paid or is discharged by rents or profits received and (d) there is no remedy by sale or foreclosure.

*** *** ***

22. The right of redemption of a mortgagor being a statutory right, the same can be taken away only in terms of the proviso appended to Section 60 of the Act which is extinguished either by a decree or by act of parties. Admittedly, in the instant case, no decree has been passed extinguishing the right of the mortgagor nor has such right come to an end by act of the parties.

23. A right for obtaining a final decree for sale or foreclosure can be exercised only on payment of such money. Such a right can be exercised at any time even before the sale is confirmed although the final decree might have been passed in the meanwhile. The mortgagee is also not entitled to receive any payment under the preliminary decree nor is the mortgagor required to make an application to recover before paying the same.

24. Even, indisputably, despite expiry of the time for deposit of the mortgaged money in terms of the preliminary decree, a second suit for redemption would be maintainable.

22. Thus the right to seek redemption continues to exist at all times but before the confirmation of sale of the mortgaged property irrespective of the decree of sale being granted. In fact even another suit to seek redemption would be maintainable.

In view of the aforesaid judgments, it can be safely concluded that right to redemption exist at all times but before confirmation of sale. Even second suit for redemption has been found to be maintainable.

23. Extinguishment of right of redemption by act of parties:

Now we will examine the extinguishment of right of redemption by act of the parties. Hon'ble Supreme Court in Narandas Karsondas v. S.A. Kamtam and Anr. , was seized of a question where the mortgagee under English mortgage had a power to sell the mortgaged property without the intervention of the Court. The mortgagee has sold the properties after giving notice to the mortgagor. The question arose whether the mortgagor can exercise his right of redemption after such sale. The Court held that right of redemption will be only on execution of conveyance and registration of transfer of mortgagor's interest by registered document. The conferment of power without the intervention of the Court in a mortgage deed by itself will not deprive the mortgagor of his right to redemption. It was held as under: ...The extinction of the right of redemption has to be subsequent to the deed conferring such power. The right of redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale.

24. In Parichhan Mistry (dead) by Lrs. and Anr. v. Achhiabar Mistry and Ors. , it was held that usufructuary mortgage cannot by mere assertion of his own or by a unilateral act on his part, assert himself to be the absolute owner. It was held to the following effect:

...When it is extinguished by the act of parties the act must take the shape and observe the formalities which the law prescribe. The expression "Act of parties" refers to some transaction subsequent to the mortgage and standing apart from the mortgage transaction. A usufructuary mortgagee cannot by mere assertion of his own or by a unilateral act on his part, convert his position on moiety of the property as mortgagee into that of an absolute owner....

25. Later, Hon'ble Supreme Court in Hamzabi and Ors. v. Syed Karimuddin and Ors. (2001)1 S.C.C. 414, held to the following effect:

2. The right of the mortgagor to redeem had its origin as an equitable principle for giving relief against forfeiture even after the mortgagor defaulted in making payment under the mortgage deed. It is a right which has defaulted in making payment under the mortgage deed. It is a right which has been jealously guarded over the years by courts. The maxim of "once a mortgage always a mortgage" and the avoidance of provisions obstructing redemption as "clogs on redemption" are expressions of this judicial protection. (See: Pomal Kanji Govindji v. Vrajlal Karsandas Purohit in this context). As far as this country is concerned, the right is statutorily recognised in Section 60 of the Transfer of Property Act. The section gives the mortgagor right to redeem the property at any time after the principal money has become due by tendering the mortgage money and claiming possession of the mortgaged property from the mortgagee. The only limit to this right is contained in the proviso to the section which reads:

Provided that the right conferred by this section has not been extinguished by act of the parties or by decree of a court.

3. While the expression "decree of court" is explicit enough, the phrase "act of parties" has given rise to controversy. One such act may be when the mortgagor sells the equity of redemption to the mortgagee. This Court in Narandas Karsondas v. S.A. Kamtham has said: S.C.C. p.254, para 34 "In India it is only on execution of the conveyance and registration of transfer of the mortgagor's interest by registered instrument that the mortgagor's right of redemption will be extinguished.

Thus, the right of redemption by act of parties can be extinguished by independent contract subsequent to the mortgage and not by an unilateral act on the part of the mortgagee under the mortgage.

In Ganga Dhar's case (supra), Hon'ble Supreme Court was examining a mortgage which was for a period of 85 years but the same was sought to be redeemed before the expiry of the said period on the ground that such long period amounts to clog on redemption. The Court held to the following effect:

The right of redemption, therefore, cannot be taken away. The Courts will ignore any contract the effect of which is to deprive the mortgagor of his right to redeem the mortgage. One thing, therefore is clear, namely, that the term in the mortgage contract, that on the failure of the mortgagor to redeem the mortgage with the specified period of six months the mortgagor will have no claim over the mortgaged property, and the mortgage deed will be deemed to be deed of sale in favour of the mortgagee, cannot be sustained. It plainly takes away altogether, the mortgagor's right to redeem the mortgage after the specified period. This is not permissible, for "once a mortgage always a mortgage" and therefore always redeemable. The same result also follow from S.60 of the Transfer of Property Act....

26. The said judgment was quoted extensively by the Hon'ble Supreme Court in Harbans 's case (supra), which arose out of a judgment of this Court reported as Harbour v. Om Parkash .

The order passed by this Court is reproduced for ready reference:

1. This is plaintiffs second appeal.

2. Plaintiff filed civil suit contending therein that the land in dispute was mortgaged by the ancestors of one Bhira with the fore-fathers of plaintiff and mortgage has not been got redeemed by the mortgagor within 30 years and so, the plaintiff and defendants 2 and 3, have become owners by efflux of time. Upon notice of suit, defendant No. 1 contested the suit and alleged that mortgage has already been redeemed. He denied that plaintiff and defendants 2 and 3 have become owners by efflux of time. Trial Court decreed the suit, but on appeal by defendant No. 1 judgment of the trial Court has been modified and it has been held that plaintiff and defendants 2 and 3 have not become owners as there is no period of limitation to redeem usufructuary mortgage. It has, however, been held that defendant No. 1 has failed to prove the mortgage has been redeemed. Against the judgment and decree of the first appellate Court, plaintiff has come in second appeal.

3. Learned Counsel appearing on behalf of plaintiff relying upon judgment of the Apex Court in State of Punjab and Ors. v. Ram Rakha and Ors. , has contended that by not redeeming the mortgage within the stipulated period, mortgagor has lost right to redeem the same.

4. After hearing the counsel and going through the record, I am of the view that the judgment cited by the counsel for plaintiff in Ram Rakha's case (supra), the point in issue was not considered. In this case, it is the admitted case of the parties that mortgagee is in possession of the property in dispute and no evidence has been brought on record by the mortgagee to show that mortgage was for a fixed period. Since no time was prescribed for redeeming the land, the mortgagor has the right to get the property redeemed, there being no limitation for redeeming the said mortgage (emphasis supplied). In this regard, reference be made to judgment in Panchanan Sharma v. Basudeo Prasad Jaganani and Ors. 1995 H.R.R. 575. Consequently, this appeal being without any merit shall stand dismissed.

This Court has relied upon Panchanan Sharma's case (supra) and distinguished State of Punjab v. Ram Rakha and held that usufructuary mortgage is always redeemable. The appeal of the mortgagee was dismissed by the Supreme Court in Harbans's case (supra) with a quote from Dr. Rashbehary Ghose's work, to the effect "that once a mortgage always a mortgage and is always redeemable".

27. In Panchanan Sharma's case (supra), Hon'ble Supreme Court has held that if the deed gives time for redemption or adjustment of the rent or profits and liabilities in terms of the contract, the limitation for redemption would run from the date fixed in the mortgage deed. Otherwise, there is no limitation for redemption of usufructuary mortgage. It was held to the following effect:

Though it is not necessary for the purpose of this case to go into the question whether Ramtahal Singh is a benamidar for the first defendant, suffice to state that by operation of Section 76(c), he is enjoined to pay land revenue to the Government and for the default committed by the mortgagee, when the property was sold, the mortgagor had not lost his right of redemption by the conduct and actions of the mortgagee. If the deed gives time for redemption or adjustment of the rent or profits and liabilities in terms of the contract read with the relevant provisions of the Act stood discharged, the limitation for would run from the date fixed in the mortgage deed. Otherwise, there is no limitation for redemption of usufructuary mortgage. The usufructuary mortgagor does not lose his tile to the property or right to redemption by lapse of time....

28. Learned Counsel for the mortgagees referred to a Full Bench judgment of this Court in Shri Chand and other's case (supra).

However, the primary question examined in the said case was validity of the oral mortgages effected prior to the enforcement of Section 59 of the Act in Haryana State. The Court found that oral or unregistered mortgages executed prior to applicability of Section 59 of the Act to the State of Haryana were valid. Since the suit was filed against the dead persons and the application for impleading the legal representatives was filed after period of 30 years from the date of mortgage, the Court dismissed the suit while allowing the revision petition. The question that as to when the period of limitation would run in case of usufructuary mortgage was not examined nor raised in the aforesaid judgment.

29. In Sampuran Singh's case (supra) the primary question revolved around acknowledgment of the mortgage. Although the said judgment supports the argument raised by learned Counsel for the mortgagee but the judgment of the larger Bench including that of Seth Ganga Dhar's case (supra) were not noticed. The'said judgment is on the lines of another judgment of Hon'ble Supreme Court in Ram Rakha's case (supra) which was noticed in Harbans's case (supra) and it was held that the said decision does not lay down correct position in law.

30. In Prabhakaran 's case (supra), the primary question again was in respect of acknowledgment. Though in para No. 13 of the judgment it has been observed that in case of a usufructuary mortgage which does not fix any date for repayment of the mortgage money, the right to redeem would accrue immediately on execution of the mortgage deed. But said observation is orbiter inasmuch as Hon'ble Supreme Court has allowed the appeal of the mortgagor for redemption while holding that there is acknowledgment. Therefore, the said judgment provides little assistance to the mortgagees.

31. After considering the aforesaid judgments, we respectfully agree that the view of the Full Bench of this Court in Lachhman Singh's case (supra) and that of Patna High Court in Jadubans Sahai's case (supra). The provisions of Sections 60, 62 and 67 of the Transfer of Property Act are not applicable within the jurisdiction of this Court. Therefore, these provisions are required to be interpreted keeping iii view the principles of equity and good conscience. Since the mortgage is essentially and basically a conveyance in law or an assignment of chattels as a security for the payment of debt or for discharge of some other obligation for which it is given, the security must, therefore, be redeemable on the payment or discharge of such debt or obligation. That is the view of the Hon'ble Supreme Court in Pomal Kanji Govindji's case (supra) wherein it has also been held that poverty should not be unduly permitted to curtail one's right to borrow money. Since at one point of time the mortgagor for one or the other reason mortgaged his property to avail financial assistance on account of necessities of life, the mortgagor's right cannot be permitted to be defeated only on account of passage of time. The interpretation sought to be raised by the mortgagees is to defeat the right of the mortgagor and is wholly inequitable and unjust. The mortgagee remains in possession of the mortgaged property; enjoys the usufruct thereof and, therefore not to lose anything by returning the security on receipt of mortgage debt.

Section 60 of the Act is general in nature applicable to all kinds of mortgages including usufructuary mortgage which is evident from Clause (b) of Section 60 of the Act, where the mortgagee in possession of the mortgaged property is required to deliver possession to the mortgagor. But Section 62 of the Act is a special provision dealing only with the rights of usufructuary mortgagor. In terms of Clause (a) of Section 62 of the Act, the suit is for possession after the mortgage comes to an end by self redeeming process as the mortgagee is authorised to pay himself the mortgage money from the rents and profits of the property. The mortgagee has to look to the rents and profits only to repay himself and when his entire charge is so liquidated he must re-deliver possession of the mortgaged property to the mortgagor. However, in terms of Clause (b) of Section 62 of the Act, the right of the mortgagor will arise'only after rents and profits derived by the mortgagee out of the usufruct of the mortgaged property are adjusted towards the interest or the principal and on mortgagor paying the balance in the manner prescribed. In such mortgages, rents and profits are to be set off against interest and the mortgagee is entitled to retain possession until such time as the mortgagor chooses to redeem on payment of.the principal sum secured. Such right for possession will accrue after the mortgage money is paid off.

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 Lald 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.

Having answered the questions or law framed, we do not una any merit in the present appeal filed by the mortgagees to seek declaration in respect of their title. The appeal is dismissed.