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PETITIONER: HARBANS SINGH ETC.

       Vs.

RESPONDENT: GURAN DITTA SINGH ETC.

DATE OF JUDGMENT20/02/1991

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. KASLIWAL, N.M. (J)

CITATION:  1991 SCR  (1) 614        1991 SCC  (2) 523  JT 1991 (2)   138        1991 SCALE  (1)345

ACT:     Redemption of Mortgages (Punjab) Act 2 of 1913-Sections 4,  12 and 13-Application for  redemption  dismissed-Whether mortgagor’s  right  of redemption  barred-Whether  suit  for redemption   under  section  60-Transfer  of  Property   Act maintainable and civil court has jurisdiction.

HEADNOTE:      Kala  Singh  predecessor of  the  respondents  executed three  mortgages hypothecating agricultural lands in  favour of the appellants.  The mortgagor filed an application under Section  4 of the Redemption of Mortgages (Punjab) Act 2  of 1913 and sought redemption of the mortgages, by paying Rs.10 in   respect  of  each  of  the  mortgage.     The   parties compromised  regarding the amount payable and the  Collector passed  the order on compromise under Section 11 of the  Act on Feb. 3, 1964.  The mortgagor having committed default  in making the payment within the time allowed for the  purpose, the  petitions were dismissed by the  Collector.   Thereupon the  mortgagor  filed  three  separate  suits  against  each mortgagee  for redemption within one year under Section   12 of  the Act on June 12, 1964 and during the pendency of  the suits,  he  having  died  the  suits  were  dismissed.   The respondents  after obtaining mutation of their names in  the revenue records, filed separate suits for redemption of  the mortgages but beyond one year as contemplated under  section 12 read with Art.14  of the Limitation Act 1908.  The  suits were  dismissed  by the trial court; which order  was  later affirmed  both by the first  appellate Court as also by  the High  Court.   On a further appeal under the  Letter  Patent Act,  the  Division  Bench of the High  Court  allowed   the appeals  and  set  aside the judgments and  Decrees  of  the courts  below and granted decree of redemption holding  that the  suits  were not barred by limitation.   The  appellants have thus filed these appeals after obtaining special leave. The  appellants  have reiterated  their  contention  amongst others that the suits were barred by limitation and  further the  High Court was not right in applying the provisions  of Section 60 of the Transfer of Property Act.      Dismissing the appeals this Court,                                                        615      HELD:  Section  13 creates a bar to  make  any  further

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petition under the Act by the mortgagor or his successor  in interest.   A reading of Section 12 clearly postulates  that the  aggrieved party, be it mortgagor or mortgagee,  against an order made under ss. 6 to 11 is empowered to institute  a suit  to  establish his right in respect  of  the  mortgage. Subject  to the result of the suit, the order passed by  the Collector shall be conclusive.  Article 14 of the Limitation Act,  1908  which  is  equivalent  to  Article  100  of  the Limitation Act, 1963, prescribes limitation of one year from the date of the decision or the order of the officer of  the Government  in  his official capacity.  Article  61  of  the present Limitation Act provides 30 years for redemption  and recovery of the possession of the hypotheca.  The limitation of 30 years runs from the date when the right to  redemption or posession accrues.  Articles 105, 134 and 145 of the  old Limitation Act would apply to the present litigation and the limitation is 60 years.(619A-C)      The creation of mortgage is an act intervivos and not a statutory  or  common law right.  The  Act  accords  summary remedy and the default of compliance entails with  dismissal of   the  application  and  section  13   prohibits   second application  for the self same relief.  The remedy of  civil suit  for  redemption available at common  law,  subject  to limitation,  is  not  taken  away.   Civil  suit  is  not  a declaratory  suit,  but one to redeem the  mortgage  and  to recover possession of mortgage property. [621B-C]      In the instant case, 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  in section 60 would apply. [622G]      Though  the  application for redemption  was  dismissed under section 11 of the Act and and became conclusive  under section  12,  the  mortgagor’s right to  redemption  is  not barred.   A  suit  for redemption under section  60  of  the Transfer  of  Property Act will be  maintainable  and  civil court  has jurisdiction to grant the decree  of  redemption. [622G]      The   suits  for  redemption  are   admittedly   within limitation either under the old Limitation or under the  new Limitation  Act.  The bar of section 12 of the Act does  not oust the  jurisdiction of the civil court  to  entertain and grant decree of redemption. [623B]      Raghunath  Singh & Ors. v. Mt. Hansraj Kanwar and  Ors. A.I.R. 1934 P.C. 205; Tulsi Dass @ Nirmal Das Ors., v. diala Ram AIR 1943.                                                        616 Lah.  176; Sheo Lal & Ors. v. Sultan and Ors. [1970]  2  SCR 405;  Mussammat  Bhagwan Devi v.  Mussammat  Bunyadi  Khanum [1902]  Punjab Record 348; Safdar Ali v. Ghulam  Mohi-ud-din Ors.,  [1915]  (1)  Punjab  Record 406;  Mian  Nizam  &  Din Mohammed  v.  Lala Ramsukh Das, AIR 1938  Lah.  286;  Milkha Singh  v.  Mst. Shankari & Ors., AIR (34) Lahore  1;Ms.  Ram Gopal  Dula  Singh v. Sardar Gurbux Singh  Jiwan  Singh  and Ors., AIR 1955 Punjab 215; Atma Singh & Gian Singh v. Mangal Singh and Ors., ILR 1957 Jan.-June (Vol. 10) 79; Ganesh  Lal v.  Jyoti  Pershad,  [1953] SCC  243,  Suryanarayan  v.  Sri ramulu, [1913] (25) M L.J.P.16;-Referred to.      Gangu & Ors., v. Maharaj Das & Ors., ILR 15 Lahore 380; Kaura v. Ram Chand, [1925] ILR 6, Lah.206-Distinguished. Bhagat  Ram  & Ors. v. Jamna Ram and Ors., [1928]  114  I.C. 447-Not approved.

JUDGMENT:

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    CIVIL  APPELLATE JURISDICTION: Civil Appeal Nos.  12224 of 1975.      From  the  Judgment and Orders dated  9.4.1974  of  the Punjab  & Haryana High Court in L.P.A. Nos. 213,214 and  215 of 1973.      S.K.  Mehta,  Dhruv  Mehta and Aman  Vachher,  for  the Appellants.      K.C. Dua for the Respondents.      The Judgment of the Court was delivered by K.  RAMASWAMY,  J.  The  appellants  are   mortgagees.   The respondents  are  the heirs of Kala  Singh,  the  mortgagor. Kala  Singh  executed  three  mortgages  in  favour  of  the appellants Resham Singh, Jaswant Singh and Harbans Singh  on September  17,  1962,  June  17,  1961  and  May  31,   1962 respectively  hypothecating  the agricultural  lands  of  16 kanals  16 marlas in each of the first two mortgages and  16 kanals  in  the  third mortgage.   The  mortgagor  filed  an application  under  Sec. 4 of the  Redemption  of  Mortgages (Punjab) Act, 2 of 1913, for short ’the Act’.  He  deposited a sum of Rs.10 in each mortgage and sought redemption of the mortgages.  Ultimately  the  parties  compromised  and   the mortgagor  agreed  to  pay the balance  of  Rs.340  to  each mortgagee  within a month from May 1, 1964.   The  Collector passed  the  order  on  compromise  under  s.11  thereof  on February  3,  1964.  He committed  default  in  the  payment thereof.  The petitions were dismis-                                                     617 sed.   He  filed separate suits against each  mortgagee  for redemption within one year under Sec. 12 of the Act on  June 12, 1964.  Pending suits he died.  Thereafter the suits were dismissed.   After obtaining mutation of their names in  the revenue  records  the respondents filed separate  suits  for redemption  of  the  mortgages,  but  beyond  one  year   as contemplated  under  Sec.   12  read with  Art.  14  of  the Limitation Act, 1903.  The suits were dismissed by the Trial Court and were confirmed by the First Appellate Court and by the  High Court in Second Appeals.  But the  Division  Bench under  Clause  (10)  of the Letter  of  Patent  allowed  the appeals  and  set  aside the Judgments and  Decrees  of  the courts  below and granted decree of redemption in  terms  of the  prayer by Judgment dated April 9, 1974.  Assailing  the legality thereof the appeals have been filed after obtaining leave under the Art.  136 of the Constitution. Since  common questions  of  facts  and law arise for  decision  in  these appeals, they are disposed of by a common judgment.      The only question that was argued before the High Court and reiterated in this Court is whether the suits are barred by  limitation.  The contention of Shri Mehta,  the  learned counsel  for the appellants is that the order passed by  the Collector under Sec. 12 of the Act is conclusive between the parties  unless  the  suits are laid under Art.  14  of  the Limitation  Act within one year from the date of the  Order. Admittedly,  the present suits have been filed  beyond  such limitation  of one year.  The High Court committed  a  grave error  of law in applying the provisions of Sec. 60  of  the Transfer of property Act and the ratio of the Privy  council in  Raghunath  Singh & Ors. v. MT. Hansraj  Kanwar  &  Ors., A.I.R.  1934 P.C. 205.  He contends that the Act provides  a right  and remedy to the mortgagor and mortgagees.   Section 12  of  the Act makes the order conclusive and  binding  and Sec.  13 bars second application in that regard  unless  the suit  is filed within one year from the date of  the  order. It is not open to the Civil Court to go behind the order  of the Collector and enlarge the limitation provided under Art. 14 of the Limitation Act.  All the provisions of Transfer of

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Property  Act  were  not  applicable  to  State  of  Punjab. Certain  Provisions  relating to Sale-deeds and  gifts  were made  applicable  to the State of Punjab  with  effect  from April  1,  1955 and to the area comprised in  the  erstwhile Pepsu  State, w.e.f. May 15, 1957. As on the date  when  the suits  were laid, s. 60 of Transfer of Property Act did  not apply  to Punjab and so the ratio in Raghunath Singh’s  case (supra) is inapplicable.  The High Court committed  manifest error  in applying s.60. He cited decisions of  Lahore  High Court  in support of the contention that the suit  shall  be laid  within  one year which we would advert to at  a  later stage.   Shri  Dua,  learned  counsel  for  the  respondents contended that the High                                                        618 Court  is justified in holding that the suit is  not  barred by  limitation  and the ratio of the decision cited  by  the appellants cannot be applied.      The Act is a beneficial legislation giving right to the mortgagors to seek redemption and restoration of  possession of  the hypotheca in summary proceedings before the  revenue courts.  The Act applied only to mortgage of land where  the principal  money secured under the mortgage does not  exceed Rs.  5,000  and the hypotheca does not exceed  50  acres  of land.   Section  4 gives right to the  mortgagor  and  other persons entitled to sue for redemption at any time after the principal  money  becomes payable and before  the  suit  for redemption  is  barred,  by presenting  a  petition  to  the collector  for  a direction i.e. mortgage  be  redeemed  and erstwhile morgages shall put the mortgagor in possession  of the hypotheca, after following the procedure in that behalf. Secs.  5 to 11 deal with the procedure.  Under s. 11 if  the Collector,  on an enquiry, forms an opinion that the sum  is rightly  due  under  the  mortgage,  he  shall,  unless   he dismisses  the petition under Sec. 10, make an  order  under Sec.6.   If the sum is found larger than the sum  deposited, the mortgagor shall deposit the amount with any further  sum that  may  be due on account of interest upto  date  of  the deposit;  on  making deposit within the period  or  extended period  not  exceeding 30 days,  thereafter,  the  Collector shall  make  an order under Sec.6  thereto.   On  committing default  by the Mortgagor, the Collector shall  dismiss  the petition.   Section 6 provides the relief of redemption;  of restoration of possession to the martgagor; delivery of  the mortgage,  deed  and payment of the mortgage  money  to  the mortgagee.  Section 12, which is material for the purpose of this case, reads thus:          (1) "Saving of suits to establish rights-Any  party          aggrieved  by an order made under Section 6, 7,  8,          9,  10  or 11 of this Act may institute a  suit  to          establish his right in respect of the mortgage, but          subject  to  the result of such suit, if  any,  the          order shall be conclusive.          (2)  Setting  aside ex-parte orders  or  orders  of          dismissal-Notwithstanding anything in this  section          a  mortgagee against whom an ex-parte  order  under          section  7  has been made or  a  petitioner,  whose          petition  has  been  dismissed  in  default   under          section  6 may apply to the Collector to have  such          order of dismissal set aside, and Collector may  in          his discretion set aside such order of   dismissal,          on  such terms as to costs or otherwise as  he  may          deem  fit;  provided that the  order  of  dismissal          shall not be set aside unless notice of                                                        619          the  application  has been served on  the  opposite

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        party."      Section  13 creates a bar to make any further  petition under the Act by the mortgagor or his successor in interest. A  reading of Sec. 12 clearly postulates that the  aggrieved party,  be it mortgagor or mortgagee, against an order  made under  ss.  6  to 11 is empowered to  institute  a  suit  to establish  his right in respect of the mortgage, subject  to the  result  of the suit the order passed by  the  Collector shall be conclusive.  Article 14 of the Limitation Act, 1908 which is equivalent to Art. 100 of the Limitation Act  1963, prescribes  limitation  of  one year from the  date  of  the decision  or the order of the officer of the  Government  in his official capacity.  Article 61 of the present Limitation Act  provides  30 years for redemption and recovery  of  the possession  of  the hypotheca.  The limitation of  30  years runs  from  the  date  when  the  right  to  redemption   or possession  accrues.  Articles 105, 134, and 145 of the  Old Limitation Act would apply to the present litigation and the limitation  is 60 years.  In Tulsi Dass @ Nirmal Das &  Ors. v.  Diala Ram, (2) AIR 1943 Lah. 176 a Full Bench for  which Tek  Chand. J. wrote the leading judgment held at  page  189 thus:          "The  order  of the Collector does not  affect  the          rights of the parties in any way; it is  conclusive          to  this extent only that the petition for  summary          redemption has been dismissed and no other petition          under the Act would lie.  No suit under s. 12 being          necessary  or comptetent, there was no bar  to  the          mortgagor suing for redemption in the civil  Courts          within  the  period  allowed  by  law  in  ordinary          course.   It  must,  therefore, be  held  that  the          mortgagor’s  suit  in  A.I.R.  1929  Lah.  513  was          rightly  decreed and that the  contrary  conclusion          reached by the Single Bench in A.I.R. 1927 Lah. 461          and  re-affirmed  by the Division Bench  in  A.I.R.          1938  Lah. 638 that it is the form of the order  of          the  Collector  which has to be seen  and  not  the          substance of it, is erroneous.      This view was approved by this Court in Sheo Lal & Ors. v.  Sultan  &  Ors., [1970] 2 SCR 405 by a  Bench  of  three Judges.   The facts were that the Collector did  not  decide the  dispute on merits, but rejected the  application  filed under Sec. 4 of the Act holding that the application  raised complicated  question  of  facts  and  law  and  thereby  he declined to exercise summary jurisdiction under the Act.  On institution  of the suit the plea of limitation  under  Art. 14 of Old Limitation Act was raised which was upheld by  the Trial Court, but on                                                        620 appeal  the  decree  of  redemption  was  granted  and   was confirmed  by  the High Court in Second  Appeal.   The  same contention  was  reiterated  before  this  Court.   In  that context  Shah,  J. as he then was, speaking for  the  court, held  that it is not the form of the order of dismissal  but its  substance will determine the application of the  period of limitation prescribed by Art.  14 of the Limitation  Act. An  order  relegating  the mortgagor to  a  civil  suit  for obtaining  an order of redemption, event if  becomes  final, does not bar a suit for redemption for it raises no cloud on the  title  of the mortgagor arising out  of  the  mortgage. Such an order is not one which is required to be set  aside. An  order required to be set aside is one which the  officer making it has jurisdiction to make it and has the effect  of barring the claim for relief unless it is set aside.      It is clear that an order passed by the Collector under

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ss. 6 to 11 is only conclusive for what was decided  therein and  if  the adjudication made by the Collector  in  summary proceedings are sought to be reopened, certainly, unless the order  is  got  over,  either by the  martgagor  or  by  the mortgagee,  or any person claiming right, title or  interest through them being an aggrieved person within the meaning of Sec. 12, the order of the Collector binds the parties or the persons claiming right, title or interest from the  parties. Take for instance, there is a dispute as in the present case about  the mortgage money before the Collector.  Kala  Singh disputed   the  money  secured  of  hypothecation  but   had compromised  and agreed to pay the amount mentioned  in  the mortgages  bond,  namely,  Rs.850-Rs.  10  in  each  of  the mortages  disputed but in the suit filed within one year  he reiterated  his  original stand.  Had the  same  stand  been taken  by  the respsondents disputing  the  mortgage  money, certainly  it  would  not  be open  to  the  respondents  as successor  in interest of the mortgagor to contend that  the money  advanced  under  the mortgage was not  Rs.  850,  but something  less.  That is not the case in the present  suit. They  agreed to pay Rs. 850 as decided by the Collector  and sought  redemption in the civil suit.  Thereby they are  not seeking  to set aside the order of the Collector,  but  they are  seeking  redemption  of  the  mortage.   Take   another instance  where  the  mortgagor disputed  the  execution  or validity  of the mortgage, bond itself and the  finding  was recorded  against the mortgagee, i.e. the mortgage bond  was not either executed or is void for being vitiated by  fraud, coercion   or   undue   influence,   etc.    The   mortgagor successfully avoided the mortgage by a specific order passed by  the Collector under the relevant provisions of the  Act. If  no  suit  was filed within a period  of  one  year,  the findings  of  the Collector become  conclusive  between  the mortgagee and the mortgagor and it is not open to assail the order of the Collector after one year in a suit of                                                          621 foreclosure  or sale by the mortgagee.  Therefore, what  was prohibited by Sec. 12 is only the substance of the order and not the form.      Once a mortgage always a mortgage and gets extinguished by  payment of mortgage money by the mortgagor or decree  of redemption  is  passed  and  satisfied.   The  creation   of mortgage is an act intervivos and not a statutory or  common law  right.  The Act accords summary remedy and the  default of compliance entails with dismissal  of the application and s.  13  prohibits  second applications  for  the  self  same relief.   The remedy of civil suit for redemption  available at  common  law, subject to limitation, is not  taken  away. Civil suit is not a declaratory suit, but one to redeem  the mortgage and to recover possession of mortgaged property.      The  question  then  is  whether  the  respondents  are entitled  to redemption of the mortgage.  Section 60 of  the Transfer of Property Act, 1882 gives right to redemption  of the  mortgage  by instituting a suit for redemption  of  the mortgage  property.   But  as seen,  at  the  relevant  time section 6D was not made applicable to Punjab.  In  Mussammat Bhagwan  Devi  v. Mussammat Bunyadi  Khanum,  [1902]  Punjab Record  348  the  Division  Bench  held  that  although  the Transfer of Property Act and the Indian Easement Act are not in force in Punjab, the Punjab Courts when deciding cases in which  principles  of law dealt with by  the  provisions  of those  Acts  are  involved, may adopt  those  provisions  as embodying law applicable to the case especially when the law enunciated therein coincides with the principles of  equity, good conscience and justice for which there is no  statutory

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law applicable to the Punjab.  In that it was held that  the mortgagor  in  possession  had  no  authority,  without  the consent  of the mortgagee, to do an act which was likely  to prove  destructive or permanently injurious to the  property mortgaged.   In  Safdar Ali. v. Ghulam Mohi-ud-din  &  Ors., [1915]  1 Punjab Record 406 the Full Bench was  to  consider whether  Doctrine of Clogging would apply when the  Transfer of Property Act was not made applicable to Punjab.  The Full Bench  held that though the Doctrine of Clogging,  in  terms does  not  apply  in  Punjab, when  there  is  no  statutory prohibition,  governing  the matter be  restricted  to  case where something unconscionable or oppressive in the  bargain calls  for  redress.  In terms the Full  Bench  applied  the Principles in the provisions of the Transfer of Property Act consistent  with  the Doctrine of Justice, Equity  and  Good Conscience.  In Mian Nizam & Din Mohammad v. Lala  Ram  Sukh Das,  AIR  1938  Lahore 286 the  right  of  prior  mortgagee purchasing property mortgaged to him be deemed to keep alive for his benefit as against subsequent mort-                                                        622 gagee.  It was held that the principles contained in s.  101 of Transfer of Property Act would be applicable and applied. In Milkha Singh v. Mst. Shankari & Ors., AIR (34) Lahore 1 a Full  Bench  of  five Judges applied the  Doctrine  of  Part Performance under s. 53A of the Transfer of Property Act  as a  defence.  It  was further held that s. 53A  is  based  on equitable  principles  which were previously  applicable  to whole  of India, though the Transfer of Property Act per  se was  not applied to Punjab.  In M/s Ram Gopal Dula Singh  v. Sardar Gurbux singh Jiwan Singh & Ors., AIR 1955 Punjab  215 Kapur,  J., as he then was speaking for the Division  Bench, held that though s. 6 of the Transfer of Property Act is not applicable  to  Punjab, the right to expectancy may  not  be transferred.  It was further held that in Punjab and  Lahore there  is  no disagreement as to Principles of  Transfer  of Property  Act  being applicable to Punjab because  they  are based on Justice, Equity and Good-conscience.  This view was again reiterated in Atma Singh & Gian Singh v. Mangal  Singh &  Ors., I.L.R.1957 Jan. -June (Vol.10) 79 and  applied  ss. 58,  92 and 100, Doctrine of Subrogation, but  excluded  the applicability of the technical rules.  This Court in Ganeshi Lal  v. Jyoti Pershad, [1953] SCC 243 held that  though  the Transfer of Property Act 1882 does not apply to Punjab,  the priciple of equity, justice and good conscience would  apply to  Punjab.   If one of the several  mortgagor  redeems  the entire  mortage by paying a sum less  than the  full  amount due  under the mortgage, he is entitled to receive from  his co-mortgagors only their proportionate shares on the  amount actually  paid  by him.  He is not entitled to  claim  their proportionate  shares  on the amount which was  due  to  the mortages  under  terms  of  the  mortgage  on  the  date  of redemption.  The same principle laid down in Suryanarayan v. Sriramulu,  [1913]  25  M.L.J. p. 16 was  referred  to  with approval  in  Ganeshi Lal’s case.  Though in  Ganeshi  Lal’s case  the entire claim under the suit for  contribution  was not decreed, the provision of Transfer of Property Act  were applied,  on  the  Principles of equity,  justice  and  good conscience and granted degree pro rata.      We hold that applying the principle of Justice,  Equity and Good Conscience though s. 60 of the Transfer of Property Act  per  se did not apply, the principles in  s.  60  would apply.  Though the application for redemption was  dismissed under s.11 of the Act and became conclusive under s. 12  the mortgagor’s  right to redemption is not barred.  A suit  for redemption  under s. 60 of Transfer of Property Act will  be

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maintainable  and civil court has jurisdiction to grant  the decree of redemption.      In  Gangu  &  Ors., v. Maharaj Das &  Ors.,  I.L.R.  15 Lahore 380 a                                                        623 Full Bench following Kaura v. Ram Chand [1925] I.L.R. 6 Lah. 206  held  that  unless  the  order  of  the  Collector   be challenged   within  one  year  the  civil  court   has   no jurisdiction to entertain the suit.  In this case the  right to  redemption of mortgage itself was barred by  limitation. Therefore,  the ratio does not apply.  Though the  ratio  in Bhagat Ram & Ors. v. Jamna Ram & Ors. [1928] 114 I.C. 447 is in  favour of the appellants, in our view the ratio  therein is not good law.  Thus we hold that the suits for redemption are  admittedly  within  limitation  either  under  the  Old Limitation or under the new Limitation Act.  The bar of Sec. 12  of the Act does not oust the jurisdiction of  the  civil Court to entertain and grant decree of redemption.      The  appeals  are  accordingly dismissed,  but  in  the circumstances  parties are directed to bear their own  costs throughout. Y.L.                              Appeal dismissed.                                                        624