Right To Redeem Mortgage Continues Until Decree For Sale Is Passed In Suit For Foreclosure & Property Is Put For Sale: Kerala High Court

The Kerala High Court observed that the right to redeem the mortgage continues until a Decree for sale is passed in a suit for foreclosure and that the property is put for sale upon a final Decree being passed.

The Court observed thus in a batch of Appeals arising out of a common Judgment of the Addl. Munsiff’s Court in suits and a counterclaim for partition.

A Single Bench of Justice Easwaran S. enunciated, “In the absence of any suit for foreclosure, going by the principle, once a mortgage is always a mortgage, the right to redeem the mortgage continues until a decree for sale is passed in a suit for foreclosure and that the property is put for sale upon a final decree being passed.”

The Bench referred to the Judgment of the Supreme Court in the case of Surendra Kumar v. Nathulal and Another (2001) in which it was held that the requirement under proviso to Section 68 of the Indian Evidence Act, 1872 (IEA) arises only if the executant has denied the execution.

Advocate G.S. Raghunath appeared for the Appellants while Advocate B. Krishna Mani appeared for the Respondents.

Factual Background

OS No.441 of 2004 (first suit) was instituted by Vimala seeking for injunction for redemption of mortgage. Another suit (OS No.216 of 2004) was instituted by Vimala’s sibling, seeking for a decree of injunction restraining his sister from trespassing into the plaint schedule property. The said property belonged to the 2nd Plaintiff’s father, late Sadasivan. He had mortgaged the property in favour of one Raghavan by a registered mortgage deed. It was contended that although the property was under mortgage, Raghavan executed a gift deed in her favour. After the transfer, Sadasivan had kept the balance 15 cents in his possession. While so the mortgage was redeemed for and on behalf of the 1st Defendant via registered deed. He was entitled to hold the property under mortgage and was obliged to get the release deed executed from the erstwhile mortgagers as and when the mortgage was redeemed by them.

According to the Plaintiffs, the execution of deed was a valid acknowledgment of the mortgage and hence, the suit for redemption of mortgage is maintainable. Thus, it was prayed that the Plaintiffs be permitted to redeem the mortgage. The Defendants contested the suit by denying the execution of the gift deed stating that it is a void document. It was further contended that the suit for redemption of mortgage was time barred. Along with the suit, a counter claim was raised by the Defendants seeking for a partition of the property covered by the gift deed. The Trial Court found that the gift deed was void inasmuch as the mandatory requirement of Section 123 of the Transfer of Property Act, 1882 (TOPA) was not met. As regards the prayer for redemption of mortgage, the Trial Court held that the suit is barred by limitation. Accordingly, the suit was decreed and the Defendants were restrained by an order of injunction from trespassing into the property. This was under challenge before the High Court.

Reasoning

The High Court in the above context of the case, noted, “… the trial court as well as the first appellate court erred egregiously in holding that the suit for redemption of mortgage was time barred.”

The Court said that there is no bar under Section 123 of TOPA, for a Registrar to be an attesting witness, provided he has signed the gift deed with the required animus.

“Read in cumulative and on the basis of the discussion which has preceded above, this Court finds that the judgments rendered by the trial court as well as the first appellate court are wrong inasmuch as the evidence and the point of law have been thoroughly misappreciated. The consequence is that the judgments of the courts below are liable to be interfered with”, it remarked.

Accordingly, the High Court allowed the Appeals, decreed the suit, permitted the Plaintiffs to redeem the mortgage by payment of 1/3rd of the mortgage amount, dismissed the counter-claim as not maintainable.

Cause Title- Sivanandan (Died) & Anr. v. Ani & Anr. (Neutral Citation: 2025:KER:4855)

Appearance:

Appellants: Advocates G.S. Raghunath, K. Rajesh Kannan, A.S. Shammy Raj, and P. Shanes Methar.

Respondents: Advocate B. Krishna Mani

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