2005 JTR(SC) 354
2005 29 AIC 205 ; 2005 AIR(SC) 1964 ; 2005 AIR(SCW) 1272 ; 2005 AIR(SCW) 1287 ; 2005 4 ALD(SC) 53 ; 2005 2 AllCJ 1135 ; 2005 AllLJ 1077 ; 2005 59 AllLR 440 ; 2005 2 AWC 1305 ; 2005 3 CHN(SC) 37 ; 2005 3 CivLJ 4 ; 2005 DNJ 284 ; 2005 2 ICC 744 ; 2005 11 JT 229 ; 2005 2 MLJ 171 ; 2005 3 RCR(Civ) 171 ; 2005 99 RD 177 ; 2005 2 Scale 384 ; 2005 3 SCC 422 ; 2005 1 WBLR 828 ; 2005 1 WLC 512 ; 2005 2 Supreme 240
2005(2) Supreme 240
Supreme Court of India
(From Allahabad High Court)
K.G. Balakrishnan & B.N. Srikrishna, JJ.
Mangal Prasad Tamoli (D) by Lrs. —Appellant
versus
Narvedshwar Mishra (D) by Lrs. and Ors. —Respondents
Civil Appeal No. 3902 of 1999
Decided on 24-2-2005
Counsel for the Parties :
For the Appellant : R.B. Mehrotra, Sr. Advocate and I.B. Gaur, Advocate.
Important point
An order of remand would be an interlocutory judgment which did not terminate proceedings and hence could be challenged in an appeal from the final order.
Act
Referred
:CIVIL PROCEDURE CODE : S.97, O.41 R.23
TRANSFER OF PROPERTY ACT : S.58
(A) The Transfer of Property Act, Section 58, read with Civil Procedure Code, Section 97 and Order 41, Rule 23, govern the adjudication of mortgage redemption suits and appellate interventions. The impugned mortgage was executed for a term of 60 years, creating a permissive mortgage that matured and automatically determined upon the death of the mortgagor. The equity of redemption was held to be subject to a clog because the redemption suit was filed prematurely, before the expiry of the statutory period, rendering the mortgage absolute and conclusive. The appellate jurisdiction under Order 41, Rule 23 of the Civil Procedure Code was invoked to challenge an interlocutory order of remand passed by the High Court, which had allowed the suit to proceed on the basis of an oral undertaking not to seek possession before the stipulated date. The provisions of the Transfer of Property Act do not permit a mortgagor to redeem during the currency of the mortgage unless expressly provided, and the Civil Procedure Code mandates that such premature suits be dismissed, affirming the hierarchy of the mortgagees title upon the determination of the term.
(B) A mortgage suit filed before the expiry of the mortgage term is premature and must be dismissed; the right of redemption accrues only upon the expiration of the stipulated period unless expressly provided otherwise; an order of remand passed on an interlocutory basis is challengeable before the appellate court under Order 41, Rule 23 of the Civil Procedure Code; and the doctrine of clogs on the equity of redemption applies to prevent redemption during the term of the mortgage.
Facts of the case:
A mortgage deed was executed by Mst. Toranto in 1908 in favor of Kesho Ram for a period of 60 years. Upon her death, the property descended to her son and then to his widow, Smt. Sukh Dei, who held a limited interest. A redemption suit was filed during the mortgage term by the plaintiff through the heirship of the original mortgagor, contending that the mortgage was void as a clog on redemption. The trial court and the first appellate court dismissed the suit as premature. The High Court allowed an appeal and remanded the suit after noting that the plaintiffs counsel had stated they would not seek possession before the stipulated date. Subsequent appeals and procedural battles followed regarding the death of certain parties and the maintenance of the appeal, culminating in a challenge to the validity of the High Courts remand order.
Findings of Court:
The High Courts order of remand was erroneous because it allowed the suit to proceed on the basis of an oral undertaking, which does not override the provisions of law requiring the dismissal of premature mortgage redemption suits. The appellate court was correct in entertaining the challenge to the interlocutory remand order under Order 41, Rule 23 of the Civil Procedure Code. The doctrine of clogs on the equity of redemption mandates that redemption cannot be enforced during the term of the mortgage, and the plaintiffs undertaking not to seek possession did not alter the legal position.
Issues:
Whether a mortgage redemption suit filed during the subsistence of the mortgage is maintainable; whether the High Court was justified in passing an order of remand allowing the suit to proceed on the basis of an oral undertaking; whether the provisions of the Transfer of Property Act and the Civil Procedure Code preclude the court from trying the merits of a premature suit; and whether the order of remand is open to attack in a subsequent appeal.
Ratio Decidendi:
The court must dismiss a mortgage redemption suit filed before the expiry of the mortgage term, as the right of redemption arises only after the determination of the mortgage period; an oral undertaking not to seek possession does not prevent the dismissal of a premature suit; and an interlocutory order of remand passed in such a context is challengeable and, if erroneous, renders all subsequent proceedings non-est.
Result:
The appeal is allowed, the High Courts order of remand dated 18.1.1966 is set aside, all subsequent proceedings are declared non-est, the original judgment dismissing the suit as premature is reaffirmed, and the appellants are entitled to costs.
(A) The Transfer of Property Act, Section 58, read with Civil Procedure Code, Section 97 and Order 41, Rule 23, govern the adjudication of mortgage redemption suits and appellate interventions. The impugned mortgage was executed for a term of 60 years, creating a permissive mortgage that matured and automatically determined upon the death of the mortgagor. The equity of redemption was held to be subject to a clog because the redemption suit was filed prematurely, before the expiry of the statutory period, rendering the mortgage absolute and conclusive. The appellate jurisdiction under Order 41, Rule 23 of the Civil Procedure Code was invoked to challenge an interlocutory order of remand passed by the High Court, which had allowed the suit to proceed on the basis of an oral undertaking not to seek possession before the stipulated date. The provisions of the Transfer of Property Act do not permit a mortgagor to redeem during the currency of the mortgage unless expressly provided, and the Civil Procedure Code mandates that such premature suits be dismissed, affirming the hierarchy of the mortgagees title upon the determination of the term.
(B) A mortgage suit filed before the expiry of the mortgage term is premature and must be dismissed; the right of redemption accrues only upon the expiration of the stipulated period unless expressly provided otherwise; an order of remand passed on an interlocutory basis is challengeable before the appellate court under Order 41, Rule 23 of the Civil Procedure Code; and the doctrine of clogs on the equity of redemption applies to prevent redemption during the term of the mortgage.
Facts of the case:
A mortgage deed was executed by Mst. Toranto in 1908 in favor of Kesho Ram for a period of 60 years. Upon her death, the property descended to her son and then to his widow, Smt. Sukh Dei, who held a limited interest. A redemption suit was filed during the mortgage term by the plaintiff through the heirship of the original mortgagor, contending that the mortgage was void as a clog on redemption. The trial court and the first appellate court dismissed the suit as premature. The High Court allowed an appeal and remanded the suit after noting that the plaintiffs counsel had stated they would not seek possession before the stipulated date. Subsequent appeals and procedural battles followed regarding the death of certain parties and the maintenance of the appeal, culminating in a challenge to the validity of the High Courts remand order.
Findings of Court:
The High Courts order of remand was erroneous because it allowed the suit to proceed on the basis of an oral undertaking, which does not override the provisions of law requiring the dismissal of premature mortgage redemption suits. The appellate court was correct in entertaining the challenge to the interlocutory remand order under Order 41, Rule 23 of the Civil Procedure Code. The doctrine of clogs on the equity of redemption mandates that redemption cannot be enforced during the term of the mortgage, and the plaintiffs undertaking not to seek possession did not alter the legal position.
Issues:
Whether a mortgage redemption suit filed during the subsistence of the mortgage is maintainable; whether the High Court was justified in passing an order of remand allowing the suit to proceed on the basis of an oral undertaking; whether the provisions of the Transfer of Property Act and the Civil Procedure Code preclude the court from trying the merits of a premature suit; and whether the order of remand is open to attack in a subsequent appeal.
Ratio Decidendi:
The court must dismiss a mortgage redemption suit filed before the expiry of the mortgage term, as the right of redemption arises only after the determination of the mortgage period; an oral undertaking not to seek possession does not prevent the dismissal of a premature suit; and an interlocutory order of remand passed in such a context is challengeable and, if erroneous, renders all subsequent proceedings non-est.
Result:
The appeal is allowed, the High Courts order of remand dated 18.1.1966 is set aside, all subsequent proceedings are declared non-est, the original judgment dismissing the suit as premature is reaffirmed, and the appellants are entitled to costs.
Judgment
Srikrihna, J.—One Harbans Mishra filed a civil suit No. 1070 of 1950 impleading as defendants Kesho Ram, Mst. Sukh Dei, Mst. Danpati, Sukhi Lal and Nageshwar Kalwar. The suit was one for redemption of a mortgage and with a chequered history.
2. One Mst. Toranto had mortgaged the suit property on 26.1.1908 in favour of Kesho Ram for a period of 60 years. This property is said to have been inherited by Smt. Sukh Dei, who on 1st April 1950 executed a sale deed selling her right of redemption in favour of Narvedshwar Mishra (original plaintiff and respondent herein). Sukh Dei had only a limited interest being a Hindu widow not in possession of the property. The plaintiff contended in the suit that the period of 60 years was fixed as the period of mortgage amounted to a clog on the equity of redemption and hence, null and void, and therefore, the plaintiff was entitled to redeem the mortgaged property without waiting for expiry of the mortgage period. Mst. Toranto died leaving her son Harbans Kalwar and daughter Harkali. Harbans Kalwar also died leaving behind his widow Sukh Dei the only heir. Mst. Dhanpati filed a suit No. 904 of 1951 for redemption and possession of the mortgaged property (the property which was the subject matter of suit No. 1070 of 1950) on the basis that she was the daughter of Mst. Toranto and had inherited the property in dispute after the death of Mst. Toranto and was, therefore, entitled to exercise the right of redemption of the same. Similarly, one Sukhi Lal also filed a suit No. 1486/1953 for redemption of the same property on the basis that he had purchased the right of redemption from Nageshwar who was the son of Smt. Toranto and the only heir. Mangal Prasad Tamoli, Bindeshwari & Sarjoo Devi, the legal heirs of the original mortgagee Keshav, contested all the three suits on various grounds.
3. By judgment dated 30.11.1955 the First Additional Munsiff, Gorakhpur dismissed all the three suits holding as follows:
4. That Smt. Danpati and Sukhi Lal had no right to the property aforesaid, the aforesaid Plaintiff in Suit O.S.No. 904 of 1951 and 1486 of 1953 have failed to prove that they were the heirs of Smt. Toranto or purchasers from the heirs of Toranto; that Smt. Toranto had a limited interest in the mortgaged property and the mortgage became void after her death in the year 1908. The heirs of Smt. Toranto having not claimed any redemption within 12 years of the death of Smt Toranto, the mortgagee became the possessor of the mortgaged property and the mortgage did not remain permissive and the suit for redemption filed by the plaintiff was dismissed inter alia on the ground that the Plaintiff had no right to redeem the property; held that Harbans Kalwar son of Toranto died after Smt. Toranto and Sukh Dei was the wife of Harbans Kalwar who claimed the property of Smt. Toranto after the death of Harbans Kalwar, the conditions of mortgage did not amount to clog on redemption and the suit was premature.
5. Narvadeshwar Mishra heir of the original plaintiff filed Civil Appeal No. 44 of 1956 arising out of the suit No. 1070 of 1950. Smt. Dhanpati and Sukhi Lal did not file any appeal against the dismissal of their Suit No. 904 of 1951 and 1486 of 1953, in view of the finding of trial court that suit was premature. On 23.4.1958 the Additional Civil Judge, Gorakhpur dismissed the appeal on the sole ground that the suit was premature and the terms of the mortgage were not a clog on redemption. The other points urged in the appeal were left open. On 18.1.1996 the High Court allowed the second appeal of Narvadeshwar Mishra and others (the heirs of plaintiff-respondents herein) holding that the finding of the courts below to the effect that the terms of the mortgage was not a clog on redemption and that the suit was premature was correct. The High Court, however, went further to hold that as appellant had made a statement before it that he would not take the possession of the property before actual expiry of the mortgage time, i.e. before 26.11.1968, the suit could be decided on merit. In this view of the matter, the High Court partly allowed the second appeal and remanded the suit to the first lower appellate court. Although, according to the present appellants, this order of remand was erroneous in law and contrary to the judgment of this Court in Gangadhar vs. Shankar Lal1, they were advised that there was no need to challenge the judgment at that stage as their rights were not finally adjudicated and the effect of the High Court judgment was that the suit for redemption could not have been brought before 26.1.68.
6. Sometime in 1965 Sukh Dei died. She was original defendant 2 in O.S.No. 1070 of 1950 and arrayed as a respondent in the appeal before the lower appellate court. There was failure to bring the legal representatives of deceased Sukh Dei on record. The heirs of Sukh Dei not having been substituted, the suit abated. An appeal carried by the plaintiff against the abatement order was also dismissed by the District Judge for default. An application for restoration was filed in the appeal. An attempt to serve notice issued for restoration of the appeal elicited the report that three of the respondents had died in 1965-66. The Additional Civil Judge, Gorakhpur held that the appeal stood abated against respondents 4 and 6 in the appeal.
7. In appeal the First Additional District Judge took the view that though one of the appellants Smt. Godawari (one of the heirs of the original plaintiff) had died, and her heirs were not brought on record, the appeal did not abate. An application for amendment moved on behalf of the defendants to amend the written statement, raising the contention that Smt. Sukh Dei had only limited interest, was rejected with the observation that the point could be urged at the time of arguments.
8. On 26.3.1982 the first Additional District Judge, Gorakhpur allowed appeal No. 44 of 1956 and decreed suit No. 1070 of 1950 setting aside the judgment of the First Additional Munsif, Gorakhpur dated 30.11.1955. Aggrieved thereby, Mangal Prasad Tamoli filed second appeal No. 1259/82 in the High Court of Allahabad. The second appeal was dismissed by the High Court on 17.9.1996. Aggrieved thereby, the heirs of the said Mangal Prasad Tamoli are in appeal before this Court by special leave. Although the facts are somewhat convoluted, the disposition of this appeal does not require traversing the maze. The learned counsel appearing for the appellant urged only one contention in favour of the appellant and we are satisfied that the appeal must succeed thereupon.
9. Learned counsel contended that the position in law is that when a mortgage suit is filed prematurely it is not open to the Court to continue with the suit on the ground that the plaintiff has agreed not to take possession before the due date. The suit has to be necessarily dismissed, though it may be open to the plaintiff to bring the suit after the period of the mortgage is over.
10. The learned counsel invited our attention to the order of the High Court dated 18.2.1966 in second appeal No. 3033/58 and contended that this order is wholly erroneous. Though the said order was not challenged in the year 1966, the appellants were entitled to canvas the correctness of the said order in the present appeal. We shall presently examine these contentions.
11. In Seth Ganga Dhar v. Shankar Lal & Ors.2 (at p.512), following the view taken by the Privy Council in Bakhtawar Begum v. Husaini Khanam3, it was held that “Ordinarily, and in the absence of a special condition entitling the mortgagor to redeem during the term for which the mortgage is created, the right of redemption can only arise on the expiration of the specified period.”
12. In Gangadhar (supra) the term of the mortgage was 85 years and there was no stipulation in the deed which entitled the mortgagor to redeem during the said term. The suit had been admittedly filed before the expiration of the term of the mortgage. After perusing the authorities cited at the Bar and after taking the view that the period of redemption of 85 years was neither oppressive nor so unreasonably long as to amount a clog on redemption. It was then held: “we then come to the conclusion that the suit was premature and must fail”.
13. Relying strongly on the authority of Gangadhar (supra), the learned counsel contended that as the suit filed by the plaintiff was premature, it ought to have been dismissed and there was no justification for the High Court to have made an order of remand in suit No. 3033/58 by its judgment dated 18.1.1966.
14. When we put to the learned counsel as to how he could in the present appeal filed in the year 1999 challenge the order of remand made by the judgment of the High Court on January 18, 1966 in second appeal No. 3033/58, the learned counsel drew our attention to the decision of this Court in Kshitish Chandra Bose v. Commissioner of Ranchi4 as authority for the proposition that an order of remand by the High Court being an interlocutory judgment, which did not terminate the proceedings, it is open to the aggrieved party to challenge it after the final judgment. This Court in Satyadhyan Ghosal and Ors. v. Smt. Deorajin Debi & Anr.5, under similar circumstances, took the view that an order of remand was an interlocutory judgment which did not terminate the proceedings and hence could be challenged in an appeal from the final order. This view was again reiterated in KC Bose (supra) wherein it is observed (p. 767)
“Mr. Sinha appearing for the respondent was unable to cite any authority of this Court taking a contrary view or overriding the decisions referred to above. In this view of the matter we are of the opinion that it is open to the appellant to assail even the first judgment of the High Court and if we hold that this judgment was legally erroneous then all the subsequent proceedings, namely, the order of remand, the order passed after remand, the appeal and the second judgment given by the High Court in appeal against the order of remand would become non-est.”
15. Having considered the questions urged by the learned counsel, which appear to be backed by the two decisions of this Court, in the background of the facts of the case before us, we are satisfied that the appellants are entitled to succeed on both counts.
16. The trial court and the first appellate court had held that the suit for redemption brought by the plaintiff was premature and rightly dismissed. It is the High Court, by its judgment dated 18.1.1966 in second appeal No. 3033/58, which took an erroneous view that because of the plaintiff’s advocate had stated that he would not seek delivery of possession before stipulated time (26.1.1968), the suit could be continued. It was on this wrong understanding of the legal position that the remand order dated January 18, 1966 came to be made by the High Court pursuant to which the appeal and further proceedings continued. If this remand order was bad in law, then all further proceedings consequent thereto would be non-est and have to be necessarily set aside. That the appellants are entitled to urge this point even at this point of time, is supported by the authority of this Court in Gangadhar (supra).
17. For the aforesaid reasons, the appellants are entitled to succeed. The appeal is allowed. The judgment and order of the High Court of Allahabad in second appeal No. 3033/58 rendered on 18.1.1966 remanding the appeal to the first Appellate Court is set aside. Consequently, all proceedings and orders of the first Appellate Court consequent to the remand are declared to be bad and non-est and set aside. The original judgment of the trial court and the first appellate court dismissing the suit No. 3033 of 1958 as pre-mature is reaffirmed.
The appellants are entitled to costs of the appeal.
Appeal allowed.
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