Limitation Period In Case Of Usufructuary Mortgage Doesn’t Run From Date of Mortgage Creation But From Date Of Payment Of Mortgage: Supreme Court
The Supreme Court was considering a matter involving the issue of redemption of a disputed property that was mortgaged.
Justice B.V. Nagarathna, Justice R. Mahadevan, Supreme Court
The Supreme Court has reiterated that when there is a usufructuary mortgage, the period of limitation does not run from the date of creation of the mortgage but from the date of payment of mortgage either out of the usufructuary or partly out of the usufructuary or partly on payment of a deposit by the mortgagor as provided under Section 52 of the Transfer of Property Act, 1882.
The Apex Court was considering a matter involving the issue of redemption of a disputed property that was mortgaged.
The Division Bench of Justice B.V. Nagarathna and Justice R. Mahadevan held, “However, during the course of submissions, the judgment in Singh Ram (supra) referred to above, by a three judge Bench of this Court reported in (2014) 9 SCC 185 has been brought to our notice. On a perusal of the said judgment, it is noted that when there is a usufructuary mortgage, the period of limitation does not run from the date of creation of the mortgage but from the date of payment of mortgage- either out of the usufructuary or partly out of the usufructuary or partly on payment of deposit by mortgager as provided under Section 52 of Transfer of Property Act, 1882.”
Senior Advocate S. Murlidhar represented the Appellant while AOR Prem Malhotra represented the Respondent.
Factual Background
The petitioners, original plaintiffs, were the mortgagees of the disputed property. The said property was mortgaged by the ancestors of the respondents, who were the original defendants in a Civil Suit that was filed by the petitioners/original plaintiffs challenging the order of the Collector. The respondents/defendants filed an application under Section 6 of the Redemption of Mortgage Act, 1913, for redemption of the said property. The redemption of the mortgaged property was allowed in favour of the applicants, i.e. respondents/defendants. Aggrieved by the Collector’s order, the petitioners/original plaintiff filed a Civil Suit wherein the Trial Court set aside the Collector's order. The respondents/defendants’ first appeal was dismissed.
The Regular Second Appeal was allowed by the Punjab and Haryana High Court, holding that the respondents/defendants’ right to redeem the mortgage was not barred by limitation and that the fresh cause of action for redemption accrued based upon the adjustments made to the loan from the income arising from the land. Thereafter, the matter was remanded to the High Court. The Court placed reliance upon Ram Kishan and Ors. Vs Sheo Ram and Ors. (2008) and held that in the case of a usufructuary mortgage, where no time limit is fixed to seek redemption, the right to seek redemption would not arise from the date of the mortgage but would arise on the date when the mortgagor pays or tenders to the mortgagee or deposits in Court, the mortgage money or balance thereof. The order of the Collector was restored. Aggrieved thereby, the petitioners/original plaintiffs approached the Apex Court.
Reasoning
The Bench took note of the fact that the High Court had placed reliance on one of its judgments in the case of Singh Ram (Dead) through legal representatives Vs. Sheo Ram and Others to allow the appeal filed by the appellants therein, who were defendants in the suit.
The Bench reaffirmed that when there is a usufructuary mortgage, the period of limitation runs from the date of payment of the mortgage, as provided under Section 52 of the Transfer of Property Act, 1882. As per the Bench, till then the period of limitation would not start under Section 61 (a) of the Schedule to the Limitation Act. The Bench thus held, “As such mere expiry of the period prescribed thereunder could not extinguish the mortgager’s right of redemption and thereby the right of mortgagee to seek declaration of title and ownership over the mortgage property stands untouched.”
The Bench also found force in the submission of the respondents that if the ratio of Singh Ram (Supra) is applied to the present case, the suit filed by the appellant/plaintiffs would have to be dismissed. Thus, dismissing the appeal, the Bench affirmed the judgment of the high court.
Cause Title: Dalip Singh(D) v. Sawan Singh (D) (Neutral Citation: 2025 INSC 1498)
Appearance
Appellant: Senior Advocate S. Murlidhar, AOR B. Sunita Rao, Advocates Anurag, Varun Popli, Shailender Popli
Respondent: AOR Prem Malhotra, Advocates Pardeep Gupta, Parinav Gupta, Mansi Gupta, Rakshit Rathi, Harshvardhan Lodhi, AOR Vipin Gupta, AOR Bipin Bihari Singh