Page 1 1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5198 OF 2008

Singh Ram (D) Thr. L.Rs. ... Appellant (s)

Versus

Sheo Ram & Ors. ... Respondent (s)

With

Civil Appeal No. 7941 of 2014 @ S.L.P.(C) No. 26861

of 2008, Civil Appeal No. 1113 of 2009, Civil Appeal

No. 7942 of 2014 @ S.L.P.(C) No. 2097 of 2009, Civil

Appeal No. 7943 of 2014 @ S.L.P.(C) No. 6355 of

2009 Civil Appeal No. 5562 of 2009, Civil Appeal No.

7944 of 2014 @ S.L.P.(C) No. 22604 of 2009, Civil

Appeal No. 7947 of 2014 @ S.L.P.(C) No. 23963 of

2009, Civil Appeal No. 8551 of 2009, Civil Appeal

No. 7948 of 2014 @ S.L.P.(C) No. 25422 of 2011,

Civil Appeal No. 7951 of 2014 @ S.L.P.(C) No. 34380

of 2011, Civil Appeal No. 7953 of 2014 @ S.L.P.(C)

No. 1274 of 2012, Civil Appeal No. 7954 of 2014 @

S.L.P.(C) No. 1275 of 2012, Civil Appeal No. 5256 of

2012, Civil Appeal No. 7955 of 2014 @ S.L.P.(C) No.

19048 of 2012, Civil Appeal No. 7956-58 of 2014 @

S.L.P.(C) Nos. 772-774 of 2013, Civil Appeal No.

7959 of 2014 @ S.L.P.(C) No.5790 of 2013, Civil

Appeal No. 9616 of 2010, Civil Appeal No. 6014 of

2014, Civil Appeal No. 5727 of 2011, Civil Appeal

No. 8132 of 2011 and Civil Appeal No. 7573 of 2009

Page 2 2

J U D G M E N T

Adarsh Kumar Goel, J.

1.Leave granted in SLPs.

2.These matters have been put up before this Bench in

pursuance of the order passed by a Bench of two Judges on

18.08.2008, as under:-

“As it appears that observations made by this Court

in Prabhakaran & Ors. vs. M. Azhagiri Pillai &

Ors., reported in 2006 (4) SCC 484, in regard to the

interpretation and/or application of Article 61 of the

Schedule appended to the Limitation Act, 1963 are

contrary to the principles laid down by this Court in

a large number of decisions, including Jayasingh

Dhyanu Mhoprekar & Anr. vs. Krishna Babaji

Patil & Anr., [1985 (4) SCC 162] as also various

decisions referred to by the Full Bench of the High

Court, we are of the opinion that the matter should

be heard by a larger Bench.”

Before adverting to the question of reconciling conflicting opinions

in various decisions, including the two decisions referred to above,

we consider it appropriate to mention that by the impugned

judgment, the Full Bench of the High Court of Punjab and Haryana

at Chandigarh, considered the question "whether there is any time

limit for usufructuary mortgagor to seek redemption?” and decided

Page 3 3

the said question in the negative, in favour of the respondent-

mortgagor as follows:-

“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.”

The correctness of the above view is the subject matter of

consideration before this Court.

3.The predecessor of the respondents mortgaged the suit

property on 11.08.1903 to the predecessor of the appellants for a

sum of Rs.80/-. The appellant-plaintiffs filed a suit for declaration

that the suit land having not been redeemed for a period of more

than 60 years, the defendants lost all rights, title and interest

therein and the appellants became the owners by prescription.

4.The trial Court considered the matter under Issue No.2 and

held that limitation starts running from the date when the

mortgagee demands the money and the mortgagor refused the

same. Discussion on the said issue is as follows:-

“There is merit in the second contention made on

behalf of the defendants. It is case of usufructuary

mortgage and in case of usufructuary mortgage and

Page 4 4

no period for the payment of mortgage amount was

fixed. It is not the case of the plaintiffs that the

plaintiffs ever made demand for the mortgage

amount and they refused. In this situation, no

cause of action could accrue to the plaintiffs, which

could only accrue on demand of the mortgage

amount from the defendants and refusal of same by

the defendants. This view also finds support from

the decision in the case of Nilkanth Balwant Natu &

Ors. vs. Vidya Narasinh Bharathi Swami & Ors. AIR

1930 PC 188).

The law laid down in several cases referred to by

the learned counsel for the plaintiffs relating to the

interpretation of provisions of Section 28 and Article

148 of the Limitation Act, does not apply on the

facts of the instant case at all as the periods of

limitation is to run from the date on which the cause

of action arises. In the result, I hold that the

plaintiffs have not become owners of the suit land

on the expiry of period of more than 60 years.

Issue No.1 is thus decided in favour of the plaintiffs

and against the defendants, and Issue No.2 is

decided against the plaintiffs and in favour of

defendants.”

The above view was affirmed by the appellate Court as follows:-

“I find force in the contention of the learned counsel

for the respondents. The present one is a case of

usufructuary mortgage and in case of such a

mortgage no period of payment is fixed. A reading

of the mortgage deed would show that no time had

been fixed. The plaintiffs had nowhere pleaded that

they ever made demand for the mortgage amount

and it was refused. In such a situation, the trial

Court was right in coming to the conclusion that no

cause of action could accrue to the plaintiffs which

could only accrue on demand of the mortgage

amount from the defendants and the refusal of the

same by them. Reliance was rightly placed by the

trial court on Nilkanth Balwant Natu & Ors. vs. Vidya

Narasingh Bhorathiswami & Ors., AIR 1930 PC 188.

No contrary view law has been cited to persuade

Page 5 5

me to take a contrary view.”

5.On second appeal by the plaintiffs before the High Court, the

matter was directed to be placed before the Full Bench to consider

the following questions:-

“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?”

6.The Full Bench held that in case of usufructuary mortgage,

limitation for recovery of possession under Article 61 of the

Limitation Act starts on payment of mortgage money as provided

under Section 62 of the Transfer of Property Act (for short ‘the T.P.

Act’) and not from the date of mortgage. Relevant observations

are:-

“After considering the aforesaid judgments, we

respectfully agree with 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 in 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

obligations for which it is given, the security must,

therefore, be redeemable on the payment or

Page 6 6

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 mortgagee

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

Page 7 7

chooses to redeem on payment of the principal sum

secured. Such right for possession will accrue after

the mortgage money is paid off.

The limitation of 30 years under Article 61(a) begins

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 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.

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

Page 8 8

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 Jaysingh Dnyanu Mhoprekar’s

case(supra), Pomal Kanji Govindji’s

case(supra), Panchannan 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) .”

7.We have heard learned counsel for the parties.

8.The main contention urged on behalf of the appellants is that

the right of mortgagor to redeem is governed by Article 61 of the

Schedule to the Limitation Act and the right to redeem or recover

possession accrues on the date of the mortgage itself, unless a

different time is agreed between the parties. Since the mortgagor

has right to redeem on payment of the mortgage money and there

can be no restriction on the mortgagor to exercise his right on the

date of mortgage itself, period of limitation starts on the date of

mortgage and on expiry thereof, right to recover possession comes

to an end. The expiry of limitation not only bars the remedy but also

Page 9 9

the right to seek possession as provided under Section 27 of the

Limitation Act. It is submitted that this Court has dealt with the

issue in Sampuran Singh & Ors. vs. Niranjan Kaur (smt.) &

Ors., (1999) 2 SCC 679. There is no occasion to reconsider the said

view. Reliance is also placed on a Full Bench decision of the High

Court of Himachal Pradesh in Bhandaru Ram (D) Thr. L.R. Ratan

Lal vs. Sukh Ram, AIR 2012 (H.P.) 1 (FB) wherein the impugned

judgment of the Full Bench of the Punjab and Haryana High Court

has been expressly dissented from and it has been concluded that

the period of limitation for filing a suit for recovery of possession of

immovable property or redemption of usufructuary mortgage, which

have not fixed any time for repayment of mortgage money, is 30

years from the date of mortgage, as prescribed under Article 61 of

the Schedule to the Limitation Act, 1963 (60 years under Article 148

as per Indian Limitation Act, 1908).

9.Learned counsel for the respondents support the view taken by

the High Court and submit that the usufructuary mortgage was

different from any other mortgage and the person, who parts with

possession of his property from rents and profits of which the

mortgagee was entitled to recover the mortgage money, could not

be placed at par with a mortgagor who had not given possession of

the property to mortgagee and allowed the usufruct of the property

Page 10 10

to be used for payment of mortgage money. In such cases,

limitation could not run from the date of mortgage but from the

date mortgage money is paid out of rents and profits of the

property to the knowledge of the mortgagor or from the date of

payment or deposit by the mortgagor. Mere expiry of time from the

date of mortgage could not extinguish the right of redemption and

to recover possession.

10.We have given our anxious consideration to the question of

law arising in the cases.

11.We are in agreement with the view taken in the impugned

judgment that in a usufructuary mortgage, right to recover

possession continues till the money is paid from the rents and

profits or where it is partly paid out of rents and profits when the

balance is paid by the mortgagor or deposited in Court as provided

under Section 62 of the T.P. Act.

12.It will be appropriate to refer to the statutory provisions of the

T.P. Act and the Limitation Act:-

“T.P. Act

58. "Mortgage", "mortgagor", "mortgagee",

"mortgage-money" and "mortgaged" defined.

(a) A mortgage is the transfer of an interest in

specific immoveable property for the purpose of

securing the payment of money advanced or to be

advanced by way of loan, an existing or future debt,

Page 11 11

or the performance of an engagement which may

give rise to a pecuniary liability.

The transferor is called a mortgagor, the transferee

a mortgagee; the principal money and interest of

which payment is secured for the time being are

called the mortgage-money, and the instrument (if

any) by which the transfer is effected is called a

mortgage-deed.

(b) Simple mortgage-Where, without delivering

possession of the mortgaged property, the

mortgagor binds himself personally to pay the

mortgage-money, and agrees, expressly or

impliedly, that, in the event of his failing to pay

according to his contract, the mortgagee shall have

a right to cause the mortgaged property to be sold

and the proceeds of sale to be applied, so far as

may be necessary, in payment of the mortgage-

money, the transaction is called a simple mortgage

and the mortgagee a simple mortgagee.

(c) Mortgage by conditional sale -Where, the

mortgagor ostensibly sells the mortgaged property-

on condition that on default of payment of the

mortgage-money on a certain date the sale shall

become absolute, or

on condition that on such payment being made the

sale shall become void, or

on condition that on such payment being made the

buyer shall transfer the property to the seller,

the transaction is called a mortgage by conditional

sale and the mortgagee a mortgagee by conditional

sale:

Page 12 12

PROVIDED that no such transaction shall be

deemed to be a mortgage, unless the condition is

embodied in the document which effects or

purports to effect the sale.

(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

authorizes 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.

(e) English mortgage-Where the mortgagor binds

himself to repay the mortgage-money on a certain

date, and transfers the mortgaged property

absolutely to the mortgagee, but subject to a

proviso that he will re-transfer it to the mortgagor

upon payment of the mortgage-money as agreed,

the transaction is called an English mortgage.

(f) Mortgage by deposit of title-deeds-Where a

person in any of the following towns, namely, the

towns of Calcutta, Madras, and Bombay, and in any

other town which the State Government concerned

may, by notification in the Official Gazette, specify

in this behalf, delivers to a creditor or his agent

documents of title to immovable property, with

intent to create a security thereon, the transaction

is called a mortgage by deposit of title-deeds.

(g) Anomalous mortgage-A mortgage which is not a

simple mortgage, a mortgage by conditional sale, a

Page 13 13

usufructuary mortgage, an English mortgage or a

mortgage by deposit of title-deeds within the

meaning of this section is called an anomalous

mortgage.

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.

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

Page 14 14

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

Limitation Act:-

Art. 61 By a mortgagor

a) To redeem or

recover

possession of

immovable

property

mortgaged

b) xxxxxxx

Thirty

years

xxxxxx

When the right to

redeem or to

recover

possession

accrues

xxxxxxxx

(emphasis supplied)

A perusal of above provisions shows that Article 61 refers to right to

redeem or recover possession. While right of mortgagor to redeem

is dealt with under Section 60 of the T.P. Act, the right of

usufructuary mortgagor to recover possession is specially dealt with

under Section 62. Section 62 is applicable only to usufructuary

mortgages and not to any other mortgage. The said right of

Page 15 15

usufructuary mortgagor though styled as ‘right to recover

possession’ is for all purposes, right to redeem and to recover

possession. Thus, while in case of any other mortgage, right to

redeem is covered under Section 60, in case of usufructuary

mortgage, right to recover possession is dealt with under Section 62

and commences on payment of mortgage money out of the

usufructs or partly out of the usufructs and partly on payment or

deposit by the mortgagor. This distinction in a usufructuary

mortgage and any other mortgage is clearly borne out from

provisions of Sections 58, 60 and 62 of the T.P. Act read with Article

61 of the Schedule to the Limitation Act. Usufructuary mortgage

cannot be treated at par with any other mortgage, as doing so will

defeat the scheme of Section 62 of the T.P. Act and the equity. This

right of the usufructuary mortgagor is not only an equitable right, it

has statutory recognition under Section 62 of the T.P. Act.There is

no principle of law on which this right can be defeated. Any

contrary view, which does not take into account the special right of

usufructuary mortgagor under Section 62 of the T.P. Act, has to be

held to be erroneous on this ground or has to be limited to a

mortgage other than a usufructuary mortgage. Accordingly, we

uphold the view taken by the Full Bench that in case of usufructuary

mortgage, mere expiry of a period of 30 years from the date of

Page 16 16

creation of the mortgage does not extinguish the right of the

mortgagor under Section 62 of the T.P. Act.

13.We may now refer to decisions of this Court.

(i)In Prabhakaran & Ors. vs. M. Azhagiri Pillai & Ors., (2006)

4 SCC 484, suit of mortgagor for redemption was held to be within

limitation. However, in para 13, it was observed:-

“13. Article 148 of the Limitation Act, 1908

(referred to as “the old Act”) provided a limitation of

60 years for a suit against a mortgagee to redeem

or to recover possession of immovable property

mortgaged. The corresponding provision in the

Limitation Act, 1963 (“the new Act” or “the

Limitation Act” for short), is Article 61(a) which

provides that the period of limitation for a suit by a

mortgagor to redeem or recover possession of the

immovable property mortgaged is 30 years. The

period of limitation begins to run when the right to

redeem or to recover possession accrues. In the

case of a usufructuary mortgage which does not fix

any date for repayment of the mortgage money, but

merely stipulates that the mortgagee is entitled to

be in possession till redemption, the right to redeem

would accrue immediately on execution of the

mortgage deed and the mortgagor has to file a suit

for redemption within 30 years from the date of the

mortgage. Section 27 of the Limitation Act provides

that “at the determination of the period hereby

limited to any person for instituting a suit for

possession of any property, his right to such

property shall be extinguished”. This would mean

that on the expiry of the period of limitation

prescribed under the Act, the mortgagor would lose

his right to redeem and the mortgagee would

become entitled to continue in possession as the

full owner.”

The above observations do not take into account the special right of

Page 17 17

usufructuary mortgagor under Section 62 of the T.P. Act to recover

possession which commences after mortgage money is paid out of

rents and profits or partly out of rents and profits and partly paid or

deposited by mortgagor. Thus, we are unable to accept the same

as correct view in law.

(ii)In Jayasingh Dhyanu Mhoprekar & Anr. vs. Krishna Babaji

Patil & Anr., 1985 (4) SCC 162 , the question of limitation for

redemption was not involved. Question was whether mortgagor’s

right of redemption was affected when mortgaged land was allotted

to mortgagees by way of grant under the provisions of the Bombay

Paragana and Kulkarni Watans (Abolition) Act, 1950, it was

observed:-

“6. The only question which arises for decision in

this case is whether by reason of the grant made in

favour of the defendants the right to redeem the

mortgage can be treated as having become

extinguished. It is well settled that the right of

redemption under a mortgage deed can come to an

end only in a manner known to law. Such

extinguishment of right can take place by a contract

between the parties, by a merger or by a statutory

provision which debars the mortgagor from

redeeming the mortgage. A mortgagee who has

entered into possession of the mortgaged property

under a mortgage will have to give up possession of

the property when the suit for redemption is filed

unless he is able to show that the right of

redemption has come to an end or that the suit is

liable to be dismissed on some other valid ground.

This flows from the legal principle which is

applicable to all mortgages, namely “Once a

Page 18 18

mortgage, always a mortgage”. It is no doubt true

that the father of the first defendant and the second

defendant have been granted occupancy right by

the Prant Officer by his order dated February 5,

1964 along with Pandu, the uncle of Defendant 1.

But it is not disputed that the defendants would not

have been able to secure the said grant in their

favour but for the fact that they were in actual

possession of the lands. They were able to be in

possession of the one-half share of the plaintiffs in

the lands in question only by reason of the

mortgage deed. If the mortgagors had been in

possession of the lands on the relevant date, the

lands would have automatically been granted in

their favour, since the rights of the tenants in the

watan lands were allowed to subsist even after the

coming into force of the Act and the consequent

abolition of the watans by virtue of Section 8 of the

Act. The question is whether the position would be

different because they had mortgaged land with

possession on the relevant date.”

Apart from judgments mentioned in reference order, reference may

be made to some other judgments dealing with the issue.

(iii)In Harbans vs. Om Prakash, (2006) 1 SCC 129, this Court

upheld the view that limitation for redemption does not start from

date of mortgage in a usufructuary mortgage and held that view in

State of Punjab & Ors. vs. Ram Rakha & Ors ., (1997) 10 SCC

172 was contrary to earlier view in Seth Gangadhar vs. Shankar

Lal, 1959 SCR 509. It was observed:-

“7. Reference may be made to certain paragraphs

in Seth Ganga Dhar v. Shankar Lal, 1959 SCR 509

which read as follows:

“[4.] It is admitted that the case is governed by the

Transfer of Property Act. Under Section 60 of that

Page 19 19

Act, at any time after the principal money has

become due, the mortgagor has a right on payment

or tender of the mortgage money to require the

mortgagee to reconvey the mortgaged property to

him. The right conferred by this section has been

called the right to redeem and the appellant sought

to enforce this right by his suit. Under this section,

however, that right can be exercised only after the

mortgage money has become due. In Bakhtawar

Begam v. Husaini Khanam,ILR (1914) 36 All 195 (IA

at p. 89) also the same view was expressed in these

words:

‘Ordinarily, and in the absence of a special condition

entitling the mortgagor to redeem during the term

for which the mortgage is created, the right of

redemption can only arise on the expiration of the

specified period.’

Now, in the present case the term of the mortgage

is eighty-five years and there is no stipulation

entitling the mortgagor to redeem during that term.

That term has not yet expired. The respondents,

therefore, contend that the suit is premature and

liable to be dismissed.

** *

[6.] The rule against clogs on the equity of

redemption is that, a mortgage shall always be

redeemable and a mortgagor’s right to redeem

shall neither be taken away nor be limited by any

contract between the parties. The principle behind

the rule was expressed by Lindley, M.R. In Santley v.

Wilde, (1899) 2 Ch. 474 in these words:

‘The principle is this: a mortgage is a conveyance of

land or an assignment of chattels as a security for

the payment of a 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

Page 20 20

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”.’

[7.] 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 within 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 a 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 follows from Section 60 of the

Transfer of Property Act. So it was said in Mohd.

Sher Khan v. Seth Swami Dayal, AIR 1922 PC 17:

‘An anomalous mortgage enabling a mortgagee

after a lapse of time and in the absence of

redemption to enter and take the rents in

satisfaction of the interest would be perfectly valid

if it did not also hinder an existing right to redeem.

But it is this that the present mortgage undoubtedly

purports to effect. It is expressly stated to be for

five years, and after that period the principal money

became payable. This, under Section 60 of the

Transfer of Property Act, is the event on which the

mortgagor had a right on payment of the mortgage

money to redeem.

[14.] In comparatively recent times Viscount

Haldane, L.C. repeated the same view when he said

in G. and C. Kreglinger v. New Patagonia Meat and

Cold Storage Co. Ltd, 1914 AC 25 (AC at pp. 35-36):

‘This jurisdiction was merely a special application of

a more general power to relieve against penalties

Page 21 21

and to mould them into mere securities. The case of

the common law mortgage of land was indeed a

gross one. The land was conveyed to the creditor

upon the condition that if the money he had

advanced to the feoffor was repaid on a date and at

a place named, the fee simple would revest in the

latter, but that if the condition was not strictly and

literally fulfilled he should lose the land forever.

What made the hardship on the debtor a glaring

one was that the debt still remained unpaid and

could be recovered from the feoffor notwithstanding

that he had actually forfeited the land to the

mortgagee. Equity therefore, at an early date began

to relieve against what was virtually a penalty by

compelling the creditor to use his legal title as a

security.

My Lords, this was the origin of the jurisdiction

which we are now considering, and it is important to

bear that origin in mind. For the end to accomplish

which the jurisdiction has been evolved ought to

govern and limit its exercise by equity judges. That

end has always been to ascertain, by parol evidence

if need be, the real nature and substance of the

transaction, and if it turned out to be in truth one of

mortgage simply, to place it on that footing. It was,

in ordinary cases, only where there was conduct

which the Court of Chancery regarded as

unconscientious that it interfered with freedom of

contract. The lending money, on mortgage or

otherwise, was looked on with suspicion, and the

court was on the alert to discover want of

conscience in the terms imposed by lenders.’

[15.] The reason then justifying the Court’s power to

relieve a mortgagor from the effects of his bargain

is its want of conscience. Putting it in more familiar

language the Court’s jurisdiction to relieve a

mortgagor from his bargain depends on whether it

was obtained by taking advantage of any difficulty

or embarrassment that he might have been in when

he borrowed the moneys on the mortgage. Was the

mortgagor oppressed? Was he imposed upon? If he

was, then he may be entitled to relief.

Page 22 22

[16.] We then have to see if there was anything

unconscionable in the agreement that the mortgage

would not be redeemed for eighty-five years. Is it

oppressive? Was he forced to agree to it because of

his difficulties? Now this question is essentially one

of fact and has to be decided on the circumstances

of each case. It would be wholly unprofitable in

enquiring into this question to examine the large

number of reported cases on the subject, for each

turns on its own facts.

The section is unqualified in its terms, and contains

no saving provision as other sections do in favour of

contracts to the contrary. Their Lordships therefore

see no sufficient reason for withholding from the

words of the section their full force and effect.’

[17.] First then, does the length of the term — and

in this case it is long enough being eighty-five years

itself lead to the conclusion that it was an

oppressive term? In our view, it does not do so. It is

not necessary for us to go so far as to say that the

length of the term of the mortgage can never by

itself show that the bargain was oppressive. We do

not desire to say anything on that question in this

case. We think it enough to say that we have

nothing here to show that the length of the term

was in any way disadvantageous to the mortgagor.

It is quite conceivable that it was to his advantage.

The suit for redemption was brought over forty-

seven years after the date of the mortgage. It

seems to us impossible that if the term was

oppressive, that was not realised much earlier and

the suit brought within a short time of the

mortgage. The learned Judicial Commissioner felt

that the respondents’ contention that the suit had

been brought as the price of landed property had

gone up after the war, was justified. We are not

prepared to say that he was wrong in this view. We

cannot also ignore, as appears from a large number

of reported decisions, that it is not uncommon in

various parts of India to have long-term mortgages.

Then we find that the property was subject to a

Page 23 23

prior mortgage. We are not aware what the term of

that mortgage was. But we find that that mortgage

included another property which became free from

it as a result of the mortgage in suit. This would

show that the mortgagee under this mortgage was

not putting any pressure on the mortgagor. That

conclusion also receives support from the fact that

the mortgage money under the present mortgage

was more than that under the earlier mortgage but

the mortgagee in the present case was satisfied

with a smaller security. Again, no complaint is made

that the interest charged, which was to be

measured by the rent of the property, was in any

manner high. All these, to our mind, indicate that

the mortgagee had not taken any unfair advantage

of his position as the lender, nor that the mortgagor

was under any financial embarrassment.

[18.] It is said that the mortgage instrument itself

indicates that the bargain is hard, for, while the

mortgagor cannot redeem for eighty-five years, the

mortgagee is free to demand payment of his dues

at any time he likes. This contention is plainly

fallacious. There is nothing in the mortgage

instrument permitting the mortgagee to demand

any money, and it is well settled that the

mortgagee’s right to enforce the mortgage and the

mortgagor’s right to redeem are coextensive.”

8. On the contrary, learned counsel for the

respondent submitted that in Panchanan Sharma v.

Basudeo Prasad Jaganani, 1995 Supp (2) SCC 574 it

was clearly held that when there is no stipulation

regarding period of limitation it can be redeemed at

any time. It was, inter alia, held as follows: (SCC p.

576, para 3)

“The sale certificate, Ext. C-II does not bind the

appellant and, therefore, the mortgage does not

stand extinguished by reason of the sale. It is

inoperative as against the appellant.”

9. Though the decision in State of Punjab case

prima facie supports the stand of the appellant, the

Page 24 24

decision rendered by a three-Judge Bench of this

Court in Ganga Dhar case according to us had dealt

with the legal position deliberately and stated the

same succinctly.”

(iv)In Parichhan Mistry (Dead) by L.Rs. & Anr. vs. Acchiabar

Mistry & Ors., (1996) 5 SCC 526, it was observed:-

“2. The High Court came to the conclusion that the

mortgagors having failed to pay a portion of the

rent for realisation of which the landlord had filed a

suit and obtained a decree and that said decree

being put to execution and the mortgagee having

paid up the decretal dues, the mortgagor loses his

right of redemption and, therefore the suit for

redemption must fail. The learned Judge came to

the conclusion that the equity of redemption, in the

facts and circumstances of the case was

extinguished and, therefore, the mortgagor is not

entitled to redeem. The short question that arises

for consideration is whether in the facts and

circumstances of the case the High Court was right

in coming to a conclusion that right of redemption

got extinguished and the mortgagor had no right of

redemption. It is true that a right of redemption

under a mortgage deed can come to an end, but

only in a manner known to law. Such

extinguishment of right can take place by contract

between the parties or by a decree of the court or

by a statutory provision which debars the

mortgagors from redeeming the mortgage. The

mortgagor’s right of redemption is exercised by the

payment or tender to the mortgagee at the proper

time and at the proper place, of the mortgage

money. When it is extinguished by the act of the

parties the act must take the shape and observe

the formalities which the law prescribes. 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

Page 25 25

his position on moiety of the property as mortgagee

into that of an absolute owner. It is no doubt true

that the mortgagee would be entitled to purchase

the entire equity of redemption from the mortgagor.

The mortgagee occupies a peculiar position and,

therefore, the question as to what he purchases at

a court sale is a vexed question, but being in an

advantageous position where the mortgagee

availing himself of his position gains an advantage

he holds, such advantage is for the benefit of the

mortgagor. It has been so held by this Court in the

case of Sidhakamal Nayan Ramanuj Das v. Bira

Nayak,AIR 1954 SC 336 and Mritunjoy Pani v.

Narmanda Bala Sasmal, (1962) 1 SCR 290. This

being the position of law if for some default in

payment of rent a rent decree is obtained and the

mortgagee pays off the same even then the

mortgage in question is liable to be redeemed at

the option of the mortgagor. The mortgagee cannot

escape from his obligation by bringing the equity of

redemption to sale in execution of a decree on the

personal covenant. By virtue of purchase of the

property by the mortgagee in court sale, no merger

takes place between the two rights nor the

mortgage stands extinguished.”

(v)In Achaldas Durgaji Oswal (Dead) Thr. L.Rs. vs. Ramvilas

Gangabisan Heda (Dead) Thr. L.Rs. & Ors. , (2003) 3 SCC 614,

this Court upheld the view that right of redemption was not lost

despite failure of a mortgagor in a usufructuary mortgage to make

deposit in terms of a preliminary decree for redemption. It was

observed:-

“7. Mr Mohta, learned Senior Counsel appearing on

behalf of the respondents on the other hand, would

submit that whereas Order 34 Rule 7 would apply

both in respect of the suit for foreclosure and

redemption of mortgage, Order 34 Rule 8 thereof

Page 26 26

refers to final decree in redemption suit only. The

learned counsel would contend that having regard

to the well-established rule “once a mortgage

always a mortgage”, the right of a mortgagor to

redeem the mortgage would continue unless the

same is extinguished either by reason of a decree

passed by a court of law or by an agreement of

parties. The learned counsel pointed out that in this

case the application for drawing up of a final decree

was filed within a period of three years from the

date of making the deposit and thus the same was

not barred by limitation.

Findings

8. Usufructuary mortgage is defined in Section

58(d) of the Transfer of Property Act in the following

terms:

“58. (d) 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 an usufructuary

mortgage and the mortgagee an usufructuary

mortgagee.”

9. Mortgagor, despite having mortgaged the

property might still deal with it in any way

consistent with the rights of the mortgagee. He has

an equitable right to redeem the property after the

day fixed for payment has gone by but his right or

equity of redemption is no longer strictly an

equitable estate or interest although it is still in the

nature of an equitable interest. (See Halsbury’s

Laws of England, 4th Edn., Vol. 32, p. 264.)

10. The right of the mortgagor, it is now well

Page 27 27

settled, to deal with the mortgaged property as well

as the limitation to which it is subject depends upon

the nature of this ownership which is not absolute,

but qualified by reason of the right of the

mortgagee to recover his money out of the

proceedings. The right to redeem the mortgage is a

very valuable right possessed by the mortgagor.

Such a right to redeem the mortgage can be

exercised before it is foreclosed or the estate is

sold. The equitable right of redemption is

dependent on the mortgagor giving the mortgagee

reasonable notice of his intention to redeem and on

his fully performing his obligations under the

mortgage.

11. The doctrine of redemption of mortgaged

property was not recognised by the Indian courts as

the essence of the doctrine of equity of redemption

was unknown to the ancient law of India. The Privy

Council in Thumbasawmy Mudelly v. Mohd. Hossain

Rowthen called upon the legislature to make a

suitable amendment which was given a statutory

recognition by reason of Section 60 of the Transfer

of Property Act which reads thus:

“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 retransfer 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 acknowledgement in writing that any

right in derogation of his interest transferred to the

mortgagee has been extinguished:

Page 28 28

Provided that the right conferred by this section has

not been extinguished by act of the parties or by

decree of a court.

The right conferred by this section is called a right

to redeem and a suit to enforce it is called a suit for

redemption.

Nothing in this section shall be deemed to render

invalid any provision to the effect that, if the time

fixed for payment of the principal money has been

allowed to pass or no such time has been fixed, the

mortgagee shall be entitled to reasonable notice

before payment or tender of such money.”

12. A right of redemption, thus, was statutorily

recognized as a right of a mortgagor as an incident

of mortgage which subsists so long as the mortgage

itself subsists. The proviso appended to Section 60,

as noticed hereinbefore, however, confines the said

right so long as the same is not extinguished by an

act of the parties or by a decree of court.

13. In the Law of Mortgage by Dr Rashbehary

Ghose at pp. 231-32 under the heading “Once a

mortgage, always a mortgage”, it is noticed:

“In 1681 Lord Nottingham in the leading case of

Howard v. Harris4 firmly laid 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.

Rice5 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

Page 29 29

Justice Sarkar of the Supreme Court in the case of

Seth Ganga Dhar v. Shankar Lal.

It is thus evident that the 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 around the mortgagor might

be rendered wholly illusory, if the right to redeem

could be limited by contract between the parties.

Right to redeem is an incident of a subsisting

mortgage and is inseparable from it so that the

right is coextensive 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.”

4. In The Law of Mortgages by Edward F. Cousins at

p. 294, in relation to protection of the right to

redeem, it is stated:

“But the protection of embarrassed mortgagors

could not be achieved by the mere creation of the

equitable right of redemption. As soon as the

practice in equity to allow redemption after the

Page 30 30

contract date became known, mortgagees sought to

defeat the intervention of equity by special

provisions in the mortgage-deed. These provisions

were designed either to render the legal right to

redeem illusory, and thus prevent the equity of

redemption from arising at all, or to defeat or clog

the equity of redemption after it had arisen. For

example, the mortgage contract might provide for

an option for the mortgagee to purchase the

mortgaged property, thus defeating both the legal

and equitable right to redeem, or might allow

redemption after the contract date only upon

payment of an additional sum or upon performance

of some additional obligation. Consequently, the

Chancellor began to relieve mortgagors against

such restrictions and fetters on the legal and

equitable rights to redeem imposed by special

covenants in the mortgage.

The protection of a mortgagor against all attempts

to defeat or clog his right of redemption involved

the creation of subsidiary rules of equity,

invalidating the various contrivances which

ingenious conveyancers devised. These rules are

sometimes summed up in a maxim of equity ‘once

a mortgage always a mortgage’. This means that

once a contract is seen to be a mortgage no

provision in the contract will be valid if it is

inconsistent with the right of the mortgagor to

recover his security on discharging his obligations.

Provisions offending against the maxim may either

touch the contractual terms of redemption,

rendering the right to redeem illusory, or they may

touch only the equitable right to redeem after the

passing of the contract date, hampering the

exercise of the right. Provisions of the latter kind

are termed ‘clogs’ on the equity of redemption.

Greene, M.R. in Knightsbridge Estates v. Byrne 7

emphasized that provisions touching the

contractual right to redeem are not properly to be

classed as clogs on the equity of redemption. But it

is evident that such provisions are in substance

clogs on the equity of redemption, since they tend

Page 31 31

to defeat it altogether.”

15. In Fisher and Lightwood’s Law of Mortgage, the

nature of the right of redemption is stated thus:

“The rights of redemption.— The right to redeem a

mortgage was formerly conferred on the mortgagor

by a proviso or condition in the mortgage to the

effect that, if the mortgagor or his representative

should pay to the mortgagee the principal sum, with

interest at the rate fixed, on a certain day, the

mortgagee, or the person in whom the estate was

vested, would, at the cost of the person redeeming,

reconvey to him or as he should direct (a). This is

still the practice in the case of a mortgage effected

by an assignment of the mortgagor’s interest (b). A

proviso for reconveyance was no longer appropriate

after 1925 for a legal mortgage of land [which has

to be made by demise (c)], and it is not necessary

to have a proviso for surrender of the term in such a

mortgage, since the term ceases on repayment (d).

Nevertheless, in order to define the rights of the

mortgagor and the mortgagee, a proviso is inserted

expressly stating that the term will cease at the

date fixed (e).

It has been seen (f) that, at law, whatever form the

mortgage took, upon non-payment by the

appointed time, the estate of the mortgagee

became absolute and irredeemable, but that equity

intervened to enable the mortgagor to redeem after

the date of repayment.

There are, therefore, two distinct rights of

redemption — the legal or contractual right to

redeem on the appointed day and the equitable

right to redeem thereafter (g). The equitable right

to redeem, which only arises after the contractual

date of redemption has passed, must be

distinguished from the equity of redemption, which

arises when the mortgage is made (g).”

16. The question which falls for consideration in this

appeal must be considered keeping in view the

statutory right of the mortgagor in terms of Section

Page 32 32

60 of the Transfer of Property Act. By reason of

Article 61 of the Limitation Act, 1963, the limitation

provided for a suit to redeem or recover the

possession of immovable property mortgaged by a

mortgagor is thirty years from the date of accrual of

right to redeem or recover possession. Article 137

which is a residuary provision provides for limitation

of three years in a case where no period of

limitation is provided.

20. The statutory provisions, as noticed

hereinbefore, are required to be construed having

regard to the redeeming features of usufructuary

mortgage, namely, (a) there is a delivery of

possession to the mortgagee, (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.

21. Order 34 Rules 7 and 8 do not confer any right

upon the usufructuary mortgagee to apply for final

decree which is conferred on the mortgagee on

other types of mortgages. By reason of sub-rule (1)

of Rule 8 of Order 34, a mortgagor is entitled to

make an application for final decree at any time

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 this Rule. No such application is again

contemplated at the instance of the usufructuary

mortgagee. By reason of sub-rule (1) of Rule 8 of

Order 34, a right of redemption is conferred upon

the mortgagor of a usufructuary mortgage. Such a

provision has been made evidently having regard to

the right of redemption of a mortgagor in terms of

Section 60 of the Transfer of Property Act and

further, having regard to the fact that a

usufructuary mortgagee would be entitled to

Page 33 33

possess the property in question till a final decree of

redemption is passed.

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.”

(vi)In Prithi Nath Singh vs. Suraj Ahir, (1963) 3 SCR 302, this

Court approved the observations of Allahabad High Court in Rama

Prasad vs. Bishambhar Singh , AIR 1946 All 400, that Sections 60

and 62 of T.P. Act make distinction in right of a usufructuary

mortgagor and other mortgagor as follows:-

“11. In Ramprasad v. Bishambhar Singh, AIR 1946

All 400, the question formulated for determination

was whether the suit being a suit to recover

possession of the mortgaged property after the

mortgage money had been paid-off was a suit

“against the mortgagee to redeem” or “to recover

possession of immovable property mortgaged”.

Page 34 34

Braund, J., said, at p. 402:

“Now, it is quite obvious that that section (Section

60 of the Transfer of Property Act) can only refer to

a case in which a mortgagor under a subsisting

mortgage approaches the Court to establish his

right to redeem and to have that redemption

carried out by the process of the various

declarations and orders of the Court by which it

effects redemption. In other words, Section 60

contemplates a case in which the mortgage is still

subsisting and the mortgagor goes to the Court to

obtain the return of his property on repayment of

what is still due. Section 62, on the other hand, is in

marked contrast to Section 60. Section 62 says that

in the case of a usufructuary mortgage the

mortgagor has a right to “recover possession” of

the property when (in a case in which the

mortgagee is authorised to pay himself the

mortgage money out of the rents and profits of the

property) the principal money is paid-off. As we see

it, that is not a case of redemption at all. At the

moment when the rents and profits of the

mortgaged property sufficed to discharge the

principal secured by the mortgage, the mortgage

came to an end and the correlative right arose in

the mortgagor “to recover possession of the

property”. The framers of the Transfer of Property

Act have clearly recognised the distinction between

the procedure which follows a mortgagor's desire to

redeem a subsisting mortgage and the procedure

which follows the arising of a usufructuary

mortgagor's right to get his property back after the

principal has been paid-off.”

(vii)In Hamzabi & Ors. vs. Syed Karimuddin & Ors. , (2001) 1

SCC 414, it was observed:-

“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 been jealously guarded

Page 35 35

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 (1989) 1 SCC 458 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. Kamtam, (1977) 3 SCC 247 has said that: (SCC

p. 254, para 34)”

(viii)Contrary view has been expressed in Sampuran Singh &

Ors. vs. Smt. Niranjan Kaur(smt.) & Ors. , (1999) 2 SCC 679 as

follows:-

“14. Submission was, as aforesaid, that right to

redeem only accrues when either the mortgagors

tender the amount of mortgage or the mortgagees

communicate satisfaction of the mortgage amount

through the usufruct from the land. This submission

is misconceived, as aforesaid, if this interpretation

is accepted, then till this happens the period of

limitation never start running and it could go on for

an infinite period. We have no hesitation to reject

Page 36 36

this submission. The language recorded above

makes it clear that right of redemption accrues from

the very first day unless restricted under the

mortgage deed. When there is no restriction the

mortgagors have a right to redeem the mortgage

from that very date when the mortgage was

executed. Right accruing means, right either

existing or coming into play thereafter. Where no

period in the mortgage is specified, there exists a

right to a mortgagor to redeem the mortgage by

paying the amount that very day in case he

receives the desired money for which he has

mortgaged his land or any day thereafter. This right

could only be restricted through law or in terms of a

valid mortgage deed. There is no such restriction

shown or pointed out. Hence, in our considered

opinion the period of limitation would start from the

very date the valid mortgage is said to have been

executed and hence the period of limitation of 60

years would start from the very date of oral

mortgage, that would be from March 1893. In view

of this, we do not find any error in the decision of

the first appellate court or the High Court holding

that the suit of the present appellants is time-

barred.”

However, facts mentioned in para 3 show that possession remained

with mortgagor and it was not a case of usufructuary mortgage.

14.We need not multiply reference to other judgments. Reference

to above judgments clearly spell out the reasons for conflicting

views. In cases where distinction in usufructuary mortgagor’s right

under Section 62 of the T.P. Act has been noted, right to redeem has

been held to continue till the mortgage money is paid for which

there is no time limit while in other cases right to redeem has been

held to accrue on the date of mortgage resulting in extinguishment

Page 37 37

of right of redemption after 30 years.

15.We, thus, hold that special right of usufructuary mortgagor

under Section 62 of the T.P. Act to recover possession commences in

the manner specified therein, i.e., when mortgage money is paid

out of rents and profits or partly out of rents and profits and partly

by payment or deposit by mortgagor. Until then, limitation does not

start for purposes of Article 61 of the Schedule to the Limitation Act.

A usufructuary mortgagee is not entitled to file a suit for declaration

that he had become an owner merely on the expiry of 30 years from

the date of the mortgage. We answer the question accordingly.

Page 38 38

16.On this conclusion, the view taken by the Punjab and Haryana

High Court will stand affirmed and contrary view taken by the

Himachal Pradesh High Court in Bhandaru Ram (D) Thr. L.R.

Ratan Lal vs. Sukh Ram (supra) will stand over-ruled.

17. The appeals are dismissed.

.............................................J.

[ T.S. THAKUR ]

............................................J.

[ C. NAGAPPAN ]

...........................................J.

[ ADARSH KUMAR GOEL ]

New Delhi

August 21, 2014