Case Note & Summary
The appellant, Mhamulal Husen Momin, was the original defendant in a suit for redemption of mortgage filed by the respondents, who were the heirs of Babalal Satarmaker. The suit property, a shop premises in Kolhapur, was mortgaged by the respondents' predecessor to the appellant for Rs. 3,960 via a registered mortgage deed dated 29-6-1966. The mortgage deed stipulated that the appellant could use the property for three years, after which possession was to be returned to the mortgagors. However, after the expiry of the three-year period, the appellant continued in possession and claimed to be a tenant, even issuing a notice to the mortgagor in 1970. The respondents filed Regular Civil Suit No. 648 of 1981 for redemption and possession. The trial court decreed the suit, and the appellate court confirmed the decree. The appellant then filed this second appeal. The legal issues were whether the mortgagee could claim tenancy and whether the suit was barred by limitation. The appellant argued that he had become a tenant by virtue of his continued possession and payment of rent, but the court found no evidence of a fresh tenancy agreement. The court held that a mortgagee in possession cannot unilaterally change his status to that of a tenant; the mortgagee's possession remains that of a mortgagee until redemption. The court also held that the suit for redemption was within the limitation period of 30 years under Article 61(a) of the Limitation Act, 1963, as the right to redeem accrued after the three-year term. The appeal was dismissed, and the decree for redemption and possession was upheld.
Headnote
A) Property Law - Usufructuary Mortgage - Redemption - Section 60, Transfer of Property Act, 1882 - Mortgagee in possession cannot unilaterally convert his possession into that of a tenant after expiry of mortgage term - The court held that the mortgagee's continued possession after the agreed period does not create a tenancy; the mortgagor's right to redeem subsists until the mortgage is extinguished by operation of law or by act of parties (Paras 1-5). B) Property Law - Mortgage - Limitation - Article 61(a) of Limitation Act, 1963 - Suit for redemption of mortgage is not barred by limitation if filed within 30 years from the date when the right to redeem accrues - The court held that the suit filed in 1981 was within limitation as the mortgage was executed in 1966 and the right to redeem arose after 3 years (Paras 1-5).
Issue of Consideration
Whether a mortgagee in possession can claim tenancy rights after the expiry of the mortgage term and whether the suit for redemption is barred by limitation.
Final Decision
The appeal is dismissed. The decree for redemption of mortgage and possession passed by the lower appellate court is confirmed. No order as to costs.
Law Points
- Usufructuary mortgage
- Redemption of mortgage
- Mortgagee cannot become tenant
- Section 60 Transfer of Property Act
- 1882
- Section 76 Transfer of Property Act
- Adverse possession
- Limitation for redemption
