JUDGMENT
Adarsh Kumar Gael, J.
1. Following substantial questions of law are involved in this appeal;-
(i) Whether mortgagee was entitled to a decree of declaration that he had become owner and was entitled to possession on the around that right of redemption had come to an end by afflux of time.
(ii) Whether the terms of mortgage permitting interest at rate equal to income from the land on a part of the principal amount and interest at the rate of Re. 1 and 9 annas % per month on rest of the amount were hit by provisions of Usurious Loans Act, 1918, and Punjab Relief of Indebtedness Act, 1934, and further whether such provisions were in the nature of clog on equity of redemption and on that account were liable to be modified:
(iii) Whether the Court could require, in its discretion that the procedure for foreclosure may be followed before the declaration of title in favour of a mortgagee can be granted if it appears the Court to be necessary to do so having regard to the facts of the case.
2. The respondent-defendants mortgaged the suit land against an amount of Rs.920/-on 26.10.1899 (mortgage, deed Exhibit P-1). Under the terms of the mortgage, the defendants respondents were to exercise their right of redemption within 4 years, failing which mortgage was to be treated as sale. Interest on a sum of Rs.420/- was to be equal to the income from the land and interest on remaining amount of Rs.500/- was to be Re.1 and 9 annas % per month. The appellant-plaintiff continued in possession from 26.10.1899 to 15.6.1962 when the respondents-defendants took possession.
3. On 30.1,1974, The appellant-plaintiff filed a suit for declaration that on failure of the respondents-defendants to pay the mortgage money and to redeem the suit land, his right to redeem was extinguished and the appellant-plaintiff had become owner. There was a decree in favour of the appellant-plaintiff but the matter was remanded by the ap-pellate court and on 1.11.1977, the appellant-plaintiff was permitted to amend the plaint to claim the relief of possession, as it was found that the appellant-plaintiff had been dispossessed on 15.6.1962. On 20.3.1978, the Trial court decreed the suit. The appellate Court set aside the decree and dismissed the suit on 6.4.1970 reversing the findings of the trial Court mainly on issues Nos.3 and 5-A, which relate to limitation and the form of the suit. It was held that the suit was barred by limitation and the mortgagee could not sue for being declared as owner without taking foreclosure proceedings. The foreclosure proceedings provide an opportunity to the mortgagor to deposit the mortgage money and the mortgagee could not, by passing foreclosure procedure sue for declaration of title.
4. The learned counsel for the appellant submits that:(i) procedure for foreclosure was not a condition precedent for extinguishing the right of redemption after limitation for redemption expires; (ii) the suit being for possession, limitation was 12 years under Arts. 63(b), 64 and 65 of the Schedule to the Limitation Act, 1962, and Arts. 58 or 113 are not applicable, (iii) provisions of Usurious Loans Act, 1918, (as amended by the Punjab Relief of Indebtedness Act, 1934,) did not apply and, therefore, the terms of the mortgage were covered by the contract between the patties and were not open to alteration by the Court.
5. Learned counsel for the respondents supported the findings for the lower appellate Court and also opposed the contentions of the learned counsel for the appellant.
6. I have heard the learned counsel for the parties and have perused the record of the case.
7. Before discussing the merit, reference may be made to the relevant statutory provisions. Under Clause 8 of Bengal Regulation No. !7 of 1806 adopted under the provisions of the Punjab Law Act (noted in the decision of this Court in Shib Lal v. Badle Ram, 1969 C.L.J. 294), procedure for foreclosure is laid down which requires giving of an opportunity to a mortgagor to pay the mortgage money before the mortgagee enforces his right against the property mortgaged.
8. Usurious Loans Act, 1918 a Central Act and confers power on the Court to relieve the debtor of liability in respect of excessive interest. Section 3(2)(e) of the Act provides guidelines as to when the interest is deemed to be excessive. It is provided therein that the interest will be deemed to be excessive if it was in excess of seven and a half per cent per annum simple interest or more than 2% over the bank rate applicable at the time of taking of the loan whichever was higher. In the case of secured loans.
9. Section 30 of the Punjab Relief of Indebtedness Act, incorporates the rule of Damdupat and it makes it imperative for a Court not to pass or execute a decree for a larger sum than twice the sum/amount found by the Court to have been actually advanced less the amount received in excess of amount due under Section 3(2)(e) of the Usurious Loans Act, 1918.
10. Section 60 of the Transfer of Property Act, 1882, deals with the right of mortgagor to redeem i.e. to recover documents/possession, re-conveyance on or after paying/tendering the mortgage money. The said right under the proviso to Section 60 can be extinguished by act of parties or decree of a Court. Section 62 is a specific provision for recovery of possession by usufructuary mortgagor which confers a right on a mortgagor to recover possession when money is paid by the mortgagee from to rents and profits of the property or partly paid out of the loans and profits and partly paid by the mortgagor. Section 67 deals with the right of a mortgagee for foreclosure, Section 76(g) requires the mortgagee to keep account of sum received and spent and Section 76(h) requires the mortgagee to debit the interest and the principal out of the receipts from the property and hand over the surplus to the mortgagor.
11. Article 61 of the Schedule of the Limitation Act, 1963, provides limitation for a suit by a mortgagor for redemption, as 30 years (under the old Act, the period was 60 years under Article 148) from the date when right to redeem or to recover possession accrues. Article 63 provides limitation for foreclosure which is 30 years from the date when the money becomes due and 12 years for possession from the date when mortgagee becomes entitled to the same. Article 64 deals with a suit for possession not based on title within 12 years from the date of dispossession and Article 65 provides limitation for suit for possession based on title which is 12 years from the date possession becomes adverse. Article 58 provides for a suit for declaration which is 3 years from the date right to sue accrues.
12. Relevant case law may now be seen. In Sita Ram Singh v. Gaya Prasad, A.I.R. 1953 All. 620 (para 5) (dealing with Article 148 of the old Limitation Act corresponding to Article 61 of the new Act) it was held that the period of limitation begins from the date of the mortgage but in a self-liquidating mortgage, right tot recover possession by a mortgagor accrues when mortgage money is fully liquidated i.e. a fresh cause of action accrues to the mortgagor on discharge of mortgage money and a mortgage which may not be self-liquidating under its own terms, may so become self-liquidating by virtue of a statutory provision. Reference was made to Debt Redemption Law reducing rate of interest and providing that usufruct in excess of rate of interest will be taken in satisfaction of the principal amount. It was observed that Debt Relief Law had effected a revolutionary change in the subsisting mortgagees by making themselves liquidating mortgagees. It was, however, required that the mortgage should be substituting on the date on which the Debt Redemption Law came into force. In Kidar Nath v. Mangal Rai, 1969(3) S.C.C. 588 (paras 11 and 13). It was held that liability of mortgagor to pay money was a debt and provisions of Section 30 of the Punjab Relief of Indebtedness Act, were applicable and amount received by the creditor in excess of interest specified under Section 3(2)(e) of the Usurious Loans Act, 1918, was liable to be deducted from the mortgage money which could not be more than twice the original advanced amount. In Vaideswara Iyer v. Kamakshi Ammal, 1994 Supp(2) S.C.C. 524 (para 4) it was observed that right to recover possession by the mortgagor where mortgage was of the year 1923, accrued in the year 1953 on wiping out of the mortgage debt. In Prithi Nath Singh v. Suraj Ahir, A.I.R. 1963 S.C. 1041 (para 5) it was held that mortgagee’s right to continue in possession comes to an end if the mortgage money was paid. In para 14, it was observed that once the mortgagee had recovered the mortgage money, the mortgagor gets a right to recover possession which was in addition to his right to redeem. In Mhadagonda Ramgoncla-Patil . Shripal Balwant Rainade, A.I.R. 1988 S.C. 1200, it was observed that under Order 34, Rule, 5 CPC right of mortgagor to redeem the mortgage continued till the confirmation of sale pursuant to a final decree and right to redeem will be extinguished only in accordance with Order 34, Rule 8(3)(a), CPC. It was observed that right to redeem was a statutory right which could be defeated either by a decree of Court or by act of parties. It was also held in para 16 that rule of Damdupat would apply. In Pomal Kanji Govindji v. Vrajlal Karsandas Purohit, A.I.R. 1989 S.C. 436, it was held that freedom of contract was subject to Court’s power to give relief against clog on equity of redemption. In Shivdev Singh v. Sitcha Singh, (2000-2)125 P.L.R.D. 4, it was observed that any unreasonable obstruction in terms of mortgage which obstructed redemption, could be struck down by the court.
13. Now, I proceed to answer the questions posed in the beginning.
14. I am of the view that the plaintiff is not entitled to declaration of having become owner on expiry of sixty years from the date of mortgage and is also not entitled to a decree for possession as sought. Reasons for my view are given in answer to the next question in the next para.
15. In my view, the terms of the mortgage are hit by the provisions of Usurious Loans Act, 1918, and Punjab Relief of Indebtedness Act, 1934. In view of the provisions of Section 3(2)(c) of the Usurious Loans Act, 1918, as amended by the and Punjab Relief of Indebtedness Act, 1934, the rate of interest could not be more than seven and a half per cent per annum simple and in view of Section 30 of the Punjab Relief of Indebtedness Act, 1934, the plaintiff could not recover more than double the amount advanced i.e. Rs. 1840/-. The plaintiff was liable to render account and adjust the income from the produce to the principal after satisfying the reduced rate of interest. In any case, the plaintiff was not entitled to adjust more than a sum of Rs.1840/-. Since the plaintiff has not rendered any account, it will be fair and reasonable to presume that the plaintiff has already recovered more than Rs.1840/- from the period of 63 years when the plaintiff remained in possession and enjoyed the fruits of the land and the mortgage is, thus, deemed to have been redeemed durimi limitation.
16. The Court in its discretion, can require a plaintiff to follow the procedure for foreclosure even if the said procedure for foreclosure even if the said procedure may not be strictly applicable, if, having regard to the facts of the case, the Court feels that injustice is done to the mortgagor and the terms of the mortgage operate as clog on equity of redemption. In the present case, terms of the mortgage clearly operate as clog on equity of redemption and the plaintiff could have been required to have recourse to the procedure of foreclosure as laid clown in Bengal Regulation or Order 34, CPC but in view of the finding recorded above that the mortgage debt stands fully discharged and the plaintiff is not entitled to any relief, the said question is not required to be gone into further.
17. In view of the above findings, suit filed by the appellant-plaintiff is liable to be dismissed on merits. I need not examine the appellant-plaintiffs contention that suit was within limitation as I am proceeding on the footing that suit is within limitation. 1 have held that on merits, the appellant-plaintiff is not entitled to declaration and possession.
18. For the foregoing reasons, this appeal fails and is dismissed. No order as to costs.