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Non-Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4985/2010

VENUGOPAL PADAYACHI (DEAD) THROUGH LRs.            Appellant(s)

                               VERSUS

V. PICHAIKARAN (DEAD) THROUGH LRs.                 Respondent(s)

J U D G M E N T

Uday Umesh Lalit, J.

1. On the basis of a document dated 20th March 1959, which was

styled  as  ‘simple  mortgage’,  Original  Suit  No.2249  of  1981  was

filed by the respondent/original plaintiff praying for redemption

of mortgage and for recovery of possession.

2. The  appellant/original  defendant  in  his  written  statement

pleaded that under the aforesaid simple mortgage, the defendant was

not  put  in  possession;  that  subsequently  a  document  dated

12.11.1960 was entered into between the parties under which the

original  plaintiff  purported  to  convey  title  in  favour  of  the

defendant;  and,  that  it  was  in  pursuance  of  this  subsequent

document that the defendant was put in possession.

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3. It must be noted here that the document dated 12.11.1960 being

an unregistered document was not allowed to be exhibited and could

not be relied upon as a document of title.

4. We need not advert to first round of the litigation whereafter

the matter stood remanded. The trial Court after remand accepted

the plea set-up by the defendant that with effect from the document

dated 12.11.1960, the possession of the defendant over the land in

question became adverse to the original plaintiff.  It was further

found that since the suit was filed more than 12 years after the

aforesaid document dated 12.11.1960, the defendant had perfected

his  title  by  adverse  possession.  The  suit  thus  came  to  be

dismissed.

5. The findings rendered by the trial Court were affirmed by the

lower  Appellate  Court  and  the  appeal  preferred  by  the  original

plaintiff was dismissed.

6. The plaintiff, being aggrieved, carried the matter further by

filing Second Appeal No.209 of 1989 in the High Court at Madras.

The High Court framed the following substantial question of law:

“Whether the Courts below are right in law in finding adverse possession when the execution of the mortgage deed is not disputed by the Defendant?”

and, found as under:

“4. Admittedly,  the  plaintiff  executed  a  mortgage  on 20.03.1959 in respect of the suit mentioned immovable property  for  a  consideration  of  Rs.300/-,  which  he borrowed from the Defendant. What was all contended by the plaintiff before both the Courts below was that the Defendant was put in possession in lieu of interest on the  mortgage  but  a  reading  of  Ex.A1  mortgage  would

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indicate that it was a simple mortgage simplicitor and hence  the  said  contention  of  the  plaintiff/appellant that  the  Defendant  was  put  in  possession  in  lieu  of interest  was  rightly  rejected.   The  case  of  the Defendant  is  that  he  purchased  the  property  from  the Defendant on 12.11.1960 for a consideration of Rs.750/- in which the mortgage amount was adjusted.  Both the Courts have not looked into the document since it was necessarily a registrable one but remains unregistered and hence the contention of the Defendant that he got the sale of the property cannot be countenanced.  But it is an admitted position that the Defendant has been in possession  of  the  property.   Before  both  the  Courts below, it was contended by the Defendant that he has also acquired title by prescription.  Both the Courts have also accepted the contention though the sale deed filed by the Defendant was not marked and relied on by the  parties.  Under  the  stated  circumstances,  the Defendant  could  have  got  into  possession  on  some understanding between the parties.  However, from the available evidence, it would be quite clear that what was executed by the plaintiff in favour of the Defendant was a simple mortgage and the plaintiff has also filed a suit for redemption.”  

7. The High Court thus arrived at a finding that the defendant

could have got into possession on “some understanding”, which was

not the case set up by any of the parties.  Holding the arrangement

under the mortgage to be continuing, it accepted the appeal and

passed  a  decree  of  redemption  holding  that  the  plaintiff  was

entitled to deposit the mortgage amount with simple interest within

a time frame.

8. The original defendant is presently in appeal by special leave

challenging  the  view  so  taken  by  the  High  Court.  It  must  be

mentioned here that during the pendency of this appeal, both the

plaintiff and the defendant have expired.  The heirs of original

plaintiff were brought on record and were served in the matter but

they have chosen not to appear in this Court.

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9. We  have  heard  Mr.  V.  Prabhakar,  learned  counsel  for  the

appellant/defendant.

10. It  was  submitted  by  Mr.  Prabhakar  that  document  dated

12.11.1960,  being  an  unregistered  one,  could  certainly  not  be

relied upon to advance the proposition that under the said document

the title came to be vested in favour of the defendant but said

document could be relied upon for collateral purpose, in that to

support that on and with effect from that date, the defendant was

put in possession. With the assistance of the learned counsel, we

have  gone  through  the  document  in  question  and  find  that  the

defendant was put in possession pursuant to said document.  

11. The question then arises is whether such possession of the

defendant under a document which otherwise is inoperative in law

could be held to be adverse to the original plaintiff. The issue is

no longer res integra as the matter has been decided by this Court

on few occasions.  

12. Mr. Prabhakar invited our attention to the decision of this

Court in Padma Vithoba Chakkayya  v. Mohd. Multani,  (1963) 3 SCR

229; and, Rukmani Ammal & Another v. Jagdesa Gounder, (2006) 1 SCC

65.

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13. In Rukmani Ammal (supra), this Court succinctly extracted the

law on the subject and observed as follows:   

“18. In K. Gopalan Thanthri  v.  Ittira Kelan,  {AIR 1970 Ker 305 : 1970 KLT 462 (FB)}, it was held by the Full Bench of the High Court of Kerala that after the sale of the  mortgage  property  in  favour  of  the  mortgagee, possession of the mortgagee becomes adverse to tarwad and if  a  suit  for  redemption  is  not  filed  within  the stipulated period of twelve years, it would become barred by limitation.

19. In the case in hand, Annamalai was the owner of the property. He mortgaged it to Defendant 1 in 1962 and since then Defendant 1 was in possession of the property as mortgagee. Annamalai then sold part of the property to the plaintiff in 1964 and the sale deed recited the factum of mortgage  by  the  owner  to  Defendant  1.  In  a  suit  for recovery  of  money  by  Defendant  1  against  Annamalai,  a decree  was  passed  and  in  execution  proceedings,  the property was purchased by the mortgagee (Defendant 1) in 1966. The auction was confirmed and sale certificate was issued  in  favour  of  Defendant  1  on  5-9-1966.  The submission of Defendant 1 is well founded that thereafter she  did  not  continue  to  remain  mortgagee  but  became absolute owner or claimed to be the absolute owner of the property. As held by this Court in the cases referred to hereinabove,  once  the  mortgagee  is  claiming  to  be  an absolute  owner  of  the  property,  his/her  status  as mortgagee comes to an end and his/her possession becomes adverse  to  the  original  owner.  Even  if  such  sale  is voidable  (and  not  void),  it  will  not  alter  the  legal position  and  adverse  title  of  the  original  mortgagee continues  and  if  the  period  of  twelve  years  expires, he/she  becomes  owner  of  the  property  by  adverse possession.”

(Emphasis supplied by us)

14. In the circumstances, the trial Court and the lower Appellate

Court  were  perfectly  right  and  justified  in  accepting  the

submission advanced on behalf of the defendant and in dismissing

the suit.  The High Court while exercising the Second Appellate

Court’s jurisdiction ought not to have interfered in the matter.

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15. We, therefore, allow this appeal, set-aside the judgment

under appeal and dismiss Original Suit No.2249 of 1981, with no

order as to costs.

...................................................J. (UDAY UMESH LALIT)         

...................................................J. (SANJAY KISHAN KAUL)       

New Delhi; September 18, 2018