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Bharat Singh (deceased) through LRs & Others v/s Sidharth & Others

Company & Directors' Information:- R SIDHARTH & COMPANY (INDIA) PVT LTD [Strike Off] CIN = U17111WB1991PTC051089

    RSA No. 344 of 2007(O&M)

    Decided On, 25 May 2016

    At, High Court of Punjab and Haryana


    For the Appellants: V.K. Jain, Senior Advocate with J.L. Malhotra, Advocate. For the Respondents: R1 to R4, Sudhir Mittal, Advocate.

Judgment Text

Amit Rawal, J.(Oral)

1. Appellants-defendants No. 1, 2 and 37 are aggrieved of the judgments and decrees rendered by both the Courts below in a suit for declaration and joint possession.

2. Mr. V.K. Jain, learned Senior Counsel assisted by Mr. J.L.Malhotra, Advocate appearing on behalf of the appellants-defendants No. 1, 2 and 37 submits that the Courts below erred in holding that plaintiffs got ⅔rd share of the mortgaged property redeemed from the mortgagee on 24.12.1996. Rather it should have been held that plaintiff-respondents were not competent to redeem the mortgaged property partially. He further submits that appellants had been subrogated in place of the mortgagees and therefore, plaintiffs and other mortgagors - Surti and Sukhman were competent to redeem the property from the mortgagees. The suit for possession was not maintainable as the appellants had been subrogated in place of the mortgagees and therefore, they should have filed the suit for redemption and not for possession. The status of mortgagor and mortgagee came to an end when the preliminary decree was passed on 15.12.1976 after expiry of 12 years and the persons, i.e., appellants, who, got the suit land redeemed, will automatically become owners of the mortgaged property and this vital aspect has not been noticed by both the Courts below. The suit for possession was not maintainable and the counter claim seeking declaration that they have become full owners by way of redemption has erroneously been declined by the Courts below. He further submits that appellants had stepped into shoes of the mortgagors, whereas, respondent-plaintiffs have purchased the share from the erstwhile mortgagors and did not seek redemption of the mortgagee and payment of ⅔rd share amount to the mortgagee tantamounts to extinguishment/creating of right which requires registration under the provisions of Section 17(1)(C) and (2) of the Registration Act. In support of his contentions, he relies upon the judgment rendered by the Hon'ble Division Bench of this Court in Gurdial Singh Kehar Singh and others v. Kartar Singh and others 1964 AIR (Punjab) 141. He further relies upon the judgments rendered in Basheshar Nath and others v. Municipal Committee Moga AIR 1940 Lahore 68 and Naman and another v. Hari Singh AIR 1941 (Lahore) 246. He further submits that suit is also beyond the period of limitation as the mortgagee is of year 1996 and present suit had been filed on 14.06.2000 and in this regard relies upon the ratio decidendi culled out by the Hon'ble Supreme Court in Valliama Champaka Pillai v. Sivathana Pillai and others, AIR 1979 Supreme Court 1937 and thus, urges this Court to formulate the following substantial questions of law as carved out in the memorandum of appeal which read thus:-

"(i) Whether the relationship of mortgagor and mortgagee comes to an end on the passing of the Preliminary Decree, if so to what effect?

(ii) Whether a mortgage, which has been redeemed, can be redeemed by the other co-mortgagors, on paying proportionate consideration, as per their share to the mortgagee?

(iii) Whether a partial redemption is permissible in the eyes of law or not?

(iv) Whether one of the mortgagors, on redemption of the mortgage is subrogated in place of the mortgagee and the non-redeeming co-mortgagor can file a suit for possession without seeking redemption or not?"

(v) Whether a co-mortgagor, who redeems the property, becomes owner, if the property is not redeemed within the prescribed period of limitation by the other co-mortgagor?

(vi) Whether a co-mortgagor can sue for possession directly, without seeking redemption of the land from their co-mortgagors?

(vii) Whether the suit for possession was maintainable?

(viii) Whether the suit was barred by limitation in the peculiar facts and circumstances of the case?

(ix) Whether the findings of the Courts below are based on non-consideration of the oral and documentary evidence and misreading thereof, are vitiated in the eyes of law?"

3. Mr. Sudhir Mittal, learned counsel appearing on behalf of respondents No. 1 to 4 submits that the aforementioned suit seeking declaration and joint possession was filed on the ground that Bhagwani, Sukhman and Surti, daughters of Duli Chand had mortgaged the suit property, i.e., land and single storey house, vide registered mortgage deed dated 30.12.1966 in favour of defendants No. 3 to 9, for a sum of Rs. 35,000/-. During the subsistence of the mortgage deed, one of the mortgagors, namely, Bhagwani gifted her ⅓rd share, vide gift deed dated 17.01.1968 (Ex.P13) in favour of defendants No. 34 to 36, who, further gifted to Karan Singh, father of defendant No. 2, Bharat Singh, defendant No. 1 and defendant No. 37, vide gift deed dated 31.10.1968. It is in these circumstances, the appellant-defendants have stepped into the shoes of Bhagwani-mortgagor. Defendants No. 1 and 2 only filed a suit for redemption and preliminary decree was passed on 15.12.1976 against the mortgagees, i.e., defendants No. 3 to 9. Appeal preferred against the aforementioned preliminary decree was dismissed on 10.02.1981 and the Regular Second Appeal filed in this Court was also dismissed, vide judgment dated 19.07.1996 with a direction to the mortgagors to deposit the mortgaged amount within a period of three months from the date of the judgment.

4. It is a matter of record that the mortgaged amount has been deposited on 21.09.1996. On 25.09.1996, appellants-defendants No. 1 and 2 filed an application for final decree. During the pendency of the aforementioned application, two other sisters, namely, sukhman and Surti - mortgagors sold their mortgagee rights in favour of the plaintiffs, vide sale deed dated 24.12.1996 (Ex.P1). Accordingly, the plaintiffs-defendants No. 1, 2 and 3 had stepped into the shoes of original mortgagors. Both the Courts below after noticing the aforementioned facts held that it is a case of subrogation and therefore, the appellants-defendants No. 1, 2 and 37 would not have an exclusive right over the property. It is only apportionment of the mortgage money amongst the mortgagors nothing beyond. Thus, claim of the mortgagors qua the entire property has rightly been rejected and suit has been decreed and thus, urges this Court for affirming the findings rendered by both the Courts below. He further submits that as per the ratio decidendi culled out by the Hon'ble Supreme Court in Valliama Champaka Pillai's case (supra), it has been held that relief of redemption is inherent in a suit for declaration as the plaintiffs are lawful owners of ⅔rd share of the property and they have no concern with regard to other ⅓rd share belonging to the contested defendants. He also submits that pith and substance is for seeking redemption on payment of the redemption money and therefore, argument that offering of amount at this stage is wholly misconceived.

5. Assuming for an argument sake that receipt Ex.PW6/1 is not registered, even then right of the co-mortgagee does not cease to exist but at the best co-mortgagee has right to recover the contribution amount of hypothecation. The right of the 'non-redeeming' co-mortgagor to pay the share and get possession of his property from the redeeming co-mortgagor, subsists as long as the latter's right to contribution subsists. The mortgage aforementioned did not provide any period for redemption, in view of the law laid down by the Hon'ble Supreme Court in Singh Ram (dead) through Legal Representatives v. Sheo Ram and others (2014) 9 SCC 185 and there is no limitation to seek redemption.

6. I have heard learned counsel for the parties and appraised the impugned judgments and decrees of the Courts below and of the view that there is no force and substance in the plea of Mr. Jain, for, in case, the argument of partial redemption is accepted, in my view, the suit for seeking of redemption of the property at the instance of defendants No. 1 and 2 was also not maintainable as it was also a case of partial redemption. Once the respondent-plaintiffs had stepped into shoes of mortgagors and the property had already been redeemed, there was no question of filing a suit for redemption at their instance. After the redemption, all the three mortgagors are co-owners, in case, they do not seek partition, the remedy is to acknowledge the status of ownership by way of declaration and consequential relief of joint possession. It is on this background of the matter, the Courts below decreed the suit.

7. It is conceded position on record that mortgage money has been deposited on 21.09.1996 by appellants No. 1 and 2 only. The Courts below have not taken into consideration this aspect, whereas, the entire payment of mortgage money cannot be fastened upon the appellants and the other mortgagors, i.e., now the plaintiffs, cannot seek the possession of the property without discharging the liability of the payment of mortgage amount. As noticed above, mortgage money was Rs. 35,000/-, so share of the respondent-plaintiffs would be Rs. 23,500/-. The respondent-plaintiffs shall not be entitled to seek execution of the decree until and unless, they do not deposit their share of mortgage amount, i.e., Rs. 23,500/-. On deposit of the same amount, status of appellants No. 1, 2 and 37 and of the plaintiffs would be of co-sharers.

8. The judgment relied by both the parties in Valliama Champaka Pillai's case (supra) basically supports the case of the appellants. Paragraph 31 of the judgment reads thus:-

"From what has been said above it is clear that where the Transfer of Property Act is not in force and a mortgage with possession is made by two persons, one of whom only redeems discharging the whole of the common mortgage debt, he will, in equity, have two distinct rights: Firstly, to be subrogated to the rights of the mortgagee discharged, vis-a-vis the non-redeeming co-mortgagor, including the right to get into possession of the latters portion or share of the hypotheca. Secondly, to recover contribution towards the excess paid by him on the security of that portion or share of the hypotheca, which belonged not to him but to the other co-mortgagor. It follows that where one co-mortgagor gets the right to contribution against the other co-mortgagor by paying off the entire mortgage debt, a correlated right also accrues to the latter to redeem his share of the property and get its possession on payment of his share of the liability to the former. This corresponding right of the 'non-redeeming' co-mortgagor, to pay his share of the liability and get possession of his property from the redeeming co-mortgagor, subsists as long as the latter's right to contribution subsists. This right of the 'non-redeeming' co-mortgagor, as rightly pointed out by the learned Chief Justice of the High Court in his leading judgment, is purely an equitable right, which exists irrespective of whether the right of contribution which the redeeming co-mortgagor, has as against the other co-mortgagor, amounts to a mortgage or not."

9. Thus, in my view, there is no force in the submission of Mr. Jain, regarding the maintainability of the suit as the right of

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the non-redeeming mortgage subsists. As regards, the suit being barred by law of limitation, I am also not impressed with the aforementioned submission, for, as per the law laid down by the Hon'ble Supreme Court in Singh Ram's case (supra), where mortgage does not provide any period of redemption, there is no limitation for seeking redemption. The pith and substance in a suit for acknowledgment of declaration also tantamount to redeeming the mortgage. 10. In pursuance to the interim order dated 23.04.2010 passed by this Court while disposing of the application for determination of the mesne profits, the appellants have furnished the security for mesne profits and the respondent-plaintiffs shall be entitled to seek execution thereof, in accordance with law. 11. With the aforementioned observations and modification in the judgments and decrees, the judgment and decree qua declaration and possession is hereby affirmed. The questions of law, as noticed above are answered against the appellants-defendants No. 1, 2 and 37 and in favour of the respondent-plaintiffs. 12. Accordingly, the appeal stands disposed of. Final decree sheet be prepared in the aforementioned terms. Appeal disposed of.