(b) no more than a pledge or security

(b) The period of limitation for a suit by a mortgagor to recover possession of immovable property mortgaged and afterwards transferred by the mortgagee for a valuable consideration is twelve years and the period of limitation begins to run when the transfer becomes known to the plaintiff. (c) The period of limitation for a suit by a mortgagor to recover surplus collections received by the mortgagee after the mortgage has been satisfied is three years and the limitation period starts on the date when the mortgagor re-enters on the mortgaged property.

Mortgage is a document whereby one who borrows money charged on certain property as security for the repayment of the sum advanced. A mortgage is the conveyance of an estate by way of pledge for the security of a debt. Mortgage consists of two things: it is a personal contract for a debt secured by an estate; and, in equity, the estate is no more than a pledge or security for the debt. Mortgage is not a charge. There is a clear distinction between a mortgage and a charge, the former being a transfer of the interest, in immovable property as a security for the loan whereas the latter is not a transfer, though it is none the less a security for the payment of an amount. The right conferred by Article 61 is called the right to redeem and the suit to enforce such right is called the suit for redemption. The right of redemption is an integral incident of the relationship of the mortgagor and mortgagee. It is the right of the mortgagor to get back the mortgaged property in free and unfettered condition as it was at the time of mortgage.

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It is a recurring right enforceable at any time within the total period of limitation prescribed in Art. 61(a) of the Limitation Act. A suit by Puisne mortgagor for redemption of a prior mortgage is governed by the Article 61.

In Govindan Nair v. Abraham, [2003 (2) ICC 301 (Ker.) (DB)], it has been held that clause (a) of Article 61 is not restricted to the suit for redemption by the original mortgagor but governs all suits for redemption by a person entitled to redeem the mortgage. Article 61(a) attracts the suits relating to oral mortgage of immovable property.

In Sirichand v. Nathi, [AIR 1983 P&H 171 (FB)], it has been held that an oral mortgage in the State of Punjab before extension of Section 59 of the Transfer of Property Act to the State was valid but for redemption of such mortgage Article 11(a) is attracted. When the suit for redemption has been filed within 30 years after the execution of the mortgage deed is clearly within time there is no question of the right to redeem being extinguished. In Ajit Singh v. Shampabai, [(2001) 10 SCC 583], the properties were mortgaged by the first mortgagor.

Subsequently, the additional mortgages in favour of all heirs of the deceased original mortgagee were made and not in favour of only an heir and in continuation of the original mortgage. It is held that such subsequent mortgages would constitute valid acknowledgement and the suit for redemption within 30 years of such additional mortgages is not barred by limitation. This is because the right of the mortgagor to redeem the mortgage subsists in a suit for foreclosure till the final decree is passed debarring the mortgagor from all rights to redeem the mortgage. In Kunhoti v. Keya, (AIR 1949 Mad.

443), it has been held that the right of redemption can come to an end according the contract between the parties, by a merger or by a statutory provision which debars a mortgagor from redeeming the mortgage. Therefore, a mortgagee who has entered into possession of the mortgaged property will have to give up possession when a suit for redemption is filed unless he is able to show that the right of redemption has come to an end or that the suit is liable to fail on some other valid ground. In Baffan Singh v. Ram Subhog, (AIR 1950 All. 466), it has been held that in the case of usufructuary mortgage the onus lies on the mortgagee to prove what is due to him on the date of application for redemption under clause (b) of Sec. 62 of the Transfer of Property Act. The right of Usufructuary mortgagor has been specified in Section 62 of the Transfer of Property Act.

According to Section 62 of that Act states that “In the case of a Usufructuary mortgage, the mortgagor has a right to recover the possession of the property together with the mortgage deed and all documents relating to the mortgaged property which are in possession and power of the mortgagee — (a) where the mortgagee is authorised to pay himself the mortgage money from the rents and profits of the property, when such money is paid; (b) where the mortgagee is authorised to pay himself from such rents and profits or any part thereof a part only of the mortgage money, when the term, if any prescribed for the payment of the mortgage money has expired and the mortgagor pays or tenders to the mortgagee the mortgage money or the balance thereof deposits it in Courts as hereinafter provided.” In Raghunath v. Gyani Rai, (AIR 1962 Pat. 177), it has been held that where a property under an Usufructuary mortgage is purchased by a person at Court sale and thereafter, the mortgagee purchases the equity of redemption from the mortgagor the purchaser at the Court sale is entitled to sue for redemption within 12 years from the mortgagee’s purchase, even though the mortgagee remained in possession for more than 12 years. In A.M.A. Firm v.

Marudachalam, (AIR 1948 Mad. 412), it has been held that a suit by the second mortgagee for redemption of the prior mortgage attracts Article 61(a) of the Limitation Act. The following suits are not under the Article 61 of the Limitation Act: (i) Suit for annulment for mortgage and for possession (Chokhey Singh v.

Hardeo, AIR 1921 Oudh 196). (ii) Suit for possession from auction-purchaser in mortgage sale (Butuk v. Rudra, AIR 1950 Pat. 206). (iii) Invalid sale of equity of redemption (Uttam v.

Rajkrishna, 24 CWN 229). (iv) Suit on subsequent agreement (Gopal v. Desai, 6 Bom. 674). (v) Suit for accessories (Khudadad v. Girdhari, 42 IC 468). (vi) Adverse possession by mortgagee (Markanda v.

Naide, 26 Pat. 717). In Dial Singh v.

Chanam Singh, [(1964) 66 Punj.LR 515], it has been held that when the mortgagee transfers the property to the transferee as owner for valuable consideration clause (a) of Art. 61 will not be attracted. In such case clause (b) of Art. 61 will be attracted.

Art. 61(a) of the Limitation Act, 1963 would also apply to the suit against the charge-holder also. In each and every case, it is for the Court to decide as to whether Art. 61(a) or Art. 61(b) will apply. Both the clauses (a) and (b) of Art. 61 covers suits by mortgagor to recover possession of property mortgaged.

But the difference between a suit under clause (a) and one under clause (b) is that clause (a) covers suits to redeem or to recover immovable property mortgaged but clause (b) relates only to suits to recover possession. A suit under clause (a) may be against the mortgagee, his successors- in-interest or assigns but under clause (b) it is against a transferee for valuable consideration or the mortgage. The period of limitation under clause (a) is 30 years whereas under clause (b) it is 12 years. The starting point of clause (a) is the date when the right to recover possession accrues and clause (b) it is when the transfer became known to plaintiff. In Era Malappa v. Sriram, (AIR 1972 AP 296), it has been held that when the transferee of the mortgagee is not for valuable consideration namely, a donee or devisee, clause (a) is attracted and clause (b) is only restricted to the suits against the transferee for valuable consideration. When the transfer is not for valuable consideration the mortgagor can seek for redemption even against such transferee within 30 years of the date when the right to redeem or to recover possession arises. When clause (a) also contemplates suits for possession it is comprehensive enough to cover suits for possession against the transferee of the mortgagee also, but clause (b) is confined to cases where mortgagee in possession of mortgaged property either under a usufructuary mortgage or under the terms of the mortgage-deed or independently of the term of .

the deed either before, at the time of or after the mortgage has transferred possession to a transferee for valuable consideration. It may be that even in such a case redemption may be necessary if something is due on the mortgage but a suit against a transferee for valuable consideration is a suit under clause (b) and the relief sought for would be for possession on redemption unless there was a transfer of absolute title in the mortgage property Article 61(b) will not apply. The transfer contemplated by clause (b) is a transfer purported to be made by the mortgagee as owner and not as mortgagee. The transfer contemplated by clause (b) of Art. 61 is not mere assignment of the interest of the original transferor. It must necessarily mean a transfer of a larger interest than the transferee was competent to transfer.

In Nanibai v. Geetabai, (AIR 1958 SC 706), it has been held that’ the expression ‘mortgagee’ used in the Article 61 is not confined the original mortgagee and it includes heirs of the mortgagee. Therefore, if the heirs of the mortgagee transferred the mortgage property in assertion of the absolute interest clause (b) of the Article 61 is attracted. As a matter of fact any transferee of the rights of the mortgagee comes within the purview of the term ‘mortgagee’ for the purpose of Art. 61(b). Article 61(b) is applicable only when the transfer is for valuable consideration.

Such consideration cannot be nominal even though it may not always be adequate. In Palani Thurai v. Veerappa, (AIR 1966 Mad. 64), it has been held that Article 61(b) is attracted to a suit by the mortgagor to recover possession of the immovable property mortgaged and afterwards transferred by the transferee for a valuable consideration, Art. 61(b) contemplates a transfer by the mortgagee in excess of his interest followed by delivery of possession to the transferee and such transfer must be for valuable consideration. In Dhanalakshmi Animal v. G. Anthuraj, (AIR 1972 Mad.

185), it has been held that when a mortgagee purporting to be the absolute owner transfers the property covered by the mortgage, the mortgagor’s remedy is to institute a suit for recovery of possession under Art. 61(b) of the 1963 Act, and the period of limitation is 12 years commencing from the time when the transfer became known to the plaintiff. In order to attract the Article 61(c), two conditions have to be satisfied, namely, (i) that the mortgage must have been satisfied; and (ii) that the mortgagor has re-entered on the mortgage property.

Art. 61(c) enables a mortgagor to recover the surplus collections received by the mortgagee; A suit for recovery of surplus profits against the mortgagee after the’ satisfaction of the mortgage attracts the Art. 61(c) irrespective of the fact whether after the satisfaction of the mortgage, the mortgagee remains in the property as a mortgagee or a quasi-trustee with certain fiduciary obligation or a mere trespass-. In Kanakraj v.

Sundaraja, (AIR 1968 Mad. 394), it has been held that Art. 61(c) does not give a separate right to the mortgagor to file a suit separately for surplus profits when such suit has to be filed along with a suit for redemption. A suit for redemption against the mortgagee in possession would envisage such a claim for surplus profits from the mortgagee also and the mortgagor cannot file a separate suit separately for surplus profits after filing the suit for redemption and in the suit for redemption he has to seek the relief for surplus profits if he has any claim for surplus profits, otherwise his subsequent suit would be hit under Order II, Rule 2 of the Civil Procedure Code. Article 61(c) will have scope of operation only in such cases where relief for surplus profit could not and did not arise when the suit for redemption was filed.

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