1996 JTR(SC) 1320
1997 AIR(SC) 456 ; 1996 AIR(SCW) 3842 ; 1996 2 AllCJ 1436 ; 1996 3 AWC 1714 ; 1997 1 CTC 86 ; 1996 3 ICC 891 ; 1996 7 JT 589 ; 1997 1 RCR(Rent) 644 ; 1996 6 Scale 142 ; 1996 5 SCC 526 ; 1996 Supp5 SCR 161 ; 1996 KHC 928 ; 1996 6 Supreme 391
1996(6) Supreme 391
SUPREME COURT OF INDIA
K. Ramaswamy and G.B. Pattanaik, JJ.
Parichhan Mistry (Dead) by LRs. & Anr. -Appellants
versus
Achhiabar Mistry & Ors. -Respondents
Civil Appeal No. 3902 of 1987
Decided on 23-8-1996
Counsel for the Parties :
For the Appellants : K.K. Rai and Ranjan Mukherjee, Advocates.
For the Respondents : M.K. Choudhary & S.K. Verma, Advocates.
IMPORTANT POINT
The mortgagee cannot escape from his obligation by bringing the equity of redemption to sale in execution of a decree on the personal covenant.
Act Referred :TRANSFER OF PROPERTY ACT : S.62, S.60
A) Sections 60 and 62 of the Transfer of Property Act are relevant; Section 60 allows a mortgagor to redeem the property by paying or tendering the mortgage money at the proper time and place, and Section 62 confirms that redemption is a statutory right which can only be extinguished by contract, court decree, or specific statutory provision. The case examines whether the mortgagor's right of redemption was extinguished when a rent decree was obtained against the mortgagor and the mortgagee paid the decretal amount, holding that such events do not extinguish the right to redeem under the provisions of these sections.
B) A mortgagor's right of redemption under a usufructuary mortgage can only be extinguished by contract, court decree, or statutory provision; mere non-payment of rent and payment by the mortgagee of a rent decree does not extinguish the equity of redemption; the mortgagee purchasing property in execution does not merge the mortgage with the title nor extinguish the mortgagor's right to redeem.
Facts of the case:
The plaintiffs/appellants mortgaged 2 bighas 3 kathas and 6 dhurs of land to the defendants via a usufructuary mortgage bond. Later, a suit for arrears of rent was filed against the mortgagor, a decree was obtained, and the mortgagee paid the decretal amount in execution. The mortgagors filed a suit for redemption, which was decreed in their favor by the trial court, dismissed by the high court on the ground that redemption rights were extinguished, and allowed on appeal to the supreme court.
Findings of Court:
The high court erred in law by concluding that the mortgagor lost the right of redemption after the rent decree and payment by the mortgagee; redemption rights can only be extinguished by law in specified ways and were not extinguished here.
Issues:
Whether the equity of redemption was extinguished due to non-payment of rent and the mortgagee's payment of the decretal sum, thereby barring redemption.
Ratio Decidendi:
A usufructuary mortgagee obtaining a rent decree and paying the decretal amount does not extinguish the mortgagor's right of redemption; such rights are extinguished only by contract, court decree, or statutory provision, and the mortgagee's payment does not merge the mortgage with title.
Result:
The appeal is allowed, the impugned high court judgment is set aside, the trial court's decree for redemption is affirmed, and no costs are ordered.
A) Sections 60 and 62 of the Transfer of Property Act are relevant; Section 60 allows a mortgagor to redeem the property by paying or tendering the mortgage money at the proper time and place, and Section 62 confirms that redemption is a statutory right which can only be extinguished by contract, court decree, or specific statutory provision. The case examines whether the mortgagor's right of redemption was extinguished when a rent decree was obtained against the mortgagor and the mortgagee paid the decretal amount, holding that such events do not extinguish the right to redeem under the provisions of these sections.
B) A mortgagor's right of redemption under a usufructuary mortgage can only be extinguished by contract, court decree, or statutory provision; mere non-payment of rent and payment by the mortgagee of a rent decree does not extinguish the equity of redemption; the mortgagee purchasing property in execution does not merge the mortgage with the title nor extinguish the mortgagor's right to redeem.
Facts of the case:
The plaintiffs/appellants mortgaged 2 bighas 3 kathas and 6 dhurs of land to the defendants via a usufructuary mortgage bond. Later, a suit for arrears of rent was filed against the mortgagor, a decree was obtained, and the mortgagee paid the decretal amount in execution. The mortgagors filed a suit for redemption, which was decreed in their favor by the trial court, dismissed by the high court on the ground that redemption rights were extinguished, and allowed on appeal to the supreme court.
Findings of Court:
The high court erred in law by concluding that the mortgagor lost the right of redemption after the rent decree and payment by the mortgagee; redemption rights can only be extinguished by law in specified ways and were not extinguished here.
Issues:
Whether the equity of redemption was extinguished due to non-payment of rent and the mortgagee's payment of the decretal sum, thereby barring redemption.
Ratio Decidendi:
A usufructuary mortgagee obtaining a rent decree and paying the decretal amount does not extinguish the mortgagor's right of redemption; such rights are extinguished only by contract, court decree, or statutory provision, and the mortgagee's payment does not merge the mortgage with title.
Result:
The appeal is allowed, the impugned high court judgment is set aside, the trial court's decree for redemption is affirmed, and no costs are ordered.
JUDGMENT
Pattanaik, J.-This appeal by the mortgagors is directed against the judgment of the Patna High Court dated 28th of July, 1980 in the Second Appeal arising out of a suit for redemption. The plaintiffs/appellants filed a suit for redemption of 2 bighas 3 kathas and 6 dhurs of land in respect of which a usufructuary mortgage bond Exhibit No. 1 dated 4th May, 1980 had been executed in favour of the defendants. The defendants had taken the stand that under the Mortgage Deed the mortgagor was liable to pay rent in respect of the holding and no rent having been paid, in a suit instituted by the landlord for arrears of rent, a decree had been obtained and in execution thereof the property had been put to sale and the defendant-mortgagee paid the decretal amount in question and, therefore, a suit for redemption will not lie. The learned Trial Judge, however, decreed the suit rejecting the objection putforth by the defendant and granted the relief of redemption. Defendants carried the matter in appeal and the said appeal having been dismissed they approached the High Court in Second Appeal. The High Court by the impugned judgment having reversed the judgment and decree of the Courts below and having dismissed the suit for redemption the present appeal has been preferred.
2. The High Court came to the conclusion that the mortgagors having failed to pay a portion of 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 looses 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 taken 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 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 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 Sidhkamal Nayan v. Bira Nayak1 and Mritunjuoy Pani v. Naramanda Bala Sasmal2. 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.
3. In this view of the matter we have no hesitation to come to the conclusion that the High Court committed gross error of law in recording a finding that the equity of redemption stood extinguished and the mortgagor is not entitled to redeem. The impugned judgment of the High Court, accordingly is set aside and the judgment of the Trial Court, as affirmed by the lower Appellate Court is affirmed. The appeal is allowed, but in the circumstances, there will be no order as to costs.
Appeal allowed.
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