Case Note & Summary
The case involves a second appeal arising from a suit for redemption of mortgage filed by the respondents (plaintiffs) against the appellant (defendant No. 2) and others. The suit land, agricultural land bearing Survey No. 99/2 admeasuring 13 Acres 35 Guntas at Banegaon, was owned by Shaikh Amir, husband of plaintiff No. 1 and father of plaintiffs 2 to 4. In May 1950, Shaikh Amir mortgaged the suit land to Sampat (original defendant No. 1) for consideration of Rs. 750, with possession delivered to the mortgagee. The mortgage deed stipulated that the mortgagee would recover the mortgage money by cultivating the land for a period of 20 years, after which possession was to be returned to the owner. After the expiry of 21 years, possession was not returned, leading to the suit. The trial court decreed the suit for redemption, which was confirmed by the first appellate court. The appellant, as legal representative of the original mortgagee, challenged the decree in second appeal. The High Court framed the substantial questions of law regarding the nature of the mortgage and limitation. The court analyzed the mortgage deed and held that the transaction was a usufructuary mortgage under Section 58(d) of the Transfer of Property Act, 1882, as possession was given and the mortgagee was to enjoy the usufruct in lieu of interest. The stipulation for return of possession after 20 years did not convert it into a mortgage by conditional sale. The court further held that the suit for redemption was not barred by limitation under Article 61(a) of the Limitation Act, 1963, as the right to redeem in a usufructuary mortgage continues until the mortgage is terminated. The appeal was dismissed, and the decree for redemption was upheld.
Headnote
A) Property Law - Usufructuary Mortgage - Right of Redemption - Sections 58(d), 60, 62 Transfer of Property Act, 1882 - The court considered whether a transaction described as a 'mortgage by conditional sale' with a fixed term of 20 years and a stipulation for return of possession after expiry was a usufructuary mortgage. Held that the transaction was a simple usufructuary mortgage as possession was delivered and the mortgagee was to recover the mortgage money from the usufruct, and the right of redemption subsists even after the fixed term. (Paras 1-10) B) Limitation - Suit for Redemption - Article 61(a) Limitation Act, 1963 - The court examined whether the suit for redemption filed after 21 years from the date of mortgage was barred by limitation. Held that the suit was within time as the right to redeem accrues only after the mortgage money becomes due, and in a usufructuary mortgage, the right to redeem continues until the mortgage is terminated by a decree or by the mortgagor's failure to pay within the period of limitation. (Paras 11-15)
Issue of Consideration
Whether the transaction in question was a mortgage by conditional sale or a usufructuary mortgage, and whether the suit for redemption was barred by limitation.
Final Decision
The High Court dismissed the second appeal and confirmed the decree of redemption of mortgage in favour of the respondents. The court held that the transaction was a usufructuary mortgage and the suit was within limitation.
Law Points
- Usufructuary mortgage
- Right of redemption
- Mortgage by conditional sale
- Limitation for redemption
- Section 60 Transfer of Property Act
- 1882
- Section 62 Transfer of Property Act
