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Petitioner: FAZAL REHMAN VS Respondent: GUL HAKIM
P L D 1954 Peshawar 46
P L D 1954 Peshawar 46
Before Muhammad Shafi, J
FAZAL REHMAN and others‑Defendants‑Petitioners
versus
GUL HAKIM and another‑Respondents
Petition for revision No, 176/53 decided on 19th December 1953 of the judgment and decree of Haji Arbab Ahmad Ali Jan Additional Judge, Peshawar, dated 30th July 1952, whereby the petitioners appeal from the judgment and decree of S. A Rashid, Sub‑Judge, 4th Class Peshawar, dated 24th April 1950. was dismissed with costs.
(a) Mortgagee---
---‑Asserting full ownership in property most gaged and getting mutation sanctioned‑Mortgagor may stilt redeem‑Mortgagee may trot plead adverse Possession
It is a fundamental principle of the law of mortgage, that a mortgagee, who comes into possession of a certain property under a mortgage cannot so long as he does not surrender the possession of that property to the mortgagor, and then retake it. assert his ownership to it, or deny the mortgagor's right to redeem it.
A mortgagee, who comes into possession as such cannot force the mortgagor to come into Court merely by asserting a proprietary title to the property mortgaged. No party to a mortgage by its unilateral act can prejudice the title of the other. The mere fact that the mortgagee asserted a hostile title to the property in dispute and thus had entries made in the revenue papers in his name as a full owner, could not force mortgagor to come into Court in order to correct those entries. The mortgagor could at any time so long as the mortgage subsisted come into Court and sue for its redemption.
(b) Mortgagee‑--
--‑Denial by mortgagor of the mortgagee's right to foreclose, or denial by mortgagee of mortgagor's right to redeem‑Rescission of contract.
When a contract of mortgage is entered into, then both parties to the mortgage undertake not to deny each other's rights under the mortgage, meaning thereby that the mortgagee would not deny the title of the mortgagor to the property, and his consequent right to redeem it, while on the other band the mortgagor would not deny the right of the mortgagee to foreclose or recover the money due under the mortgage. If anyone of the two parties denies such a right, then he gives a cause to the other party to rescind the contract in its entirety. It will be most inequitable to allow a person to remain in possession of a certain property originally mortgaged to him, to which he asserted his title doggedly. That would endanger the mortgagor's right‑ to redeem the property.
Durga Charan Majji v. Poresh Bewa 76 I C page 336, A I R 1927 Oudh page 12, and A I R 1925 Madras page 825 ref.
Abdul Latif Khan, for Petitioners.
Sheikh Allah Bakhsh, for Respondents.
ORDER
MUHAMMAD SHAFI, J.‑Jumma Khan, son of Muhammad Amir, by a registered deed, dated 6th October 1898, transferred 13 kanals 1 marla of land, and Miana, situated in Khattar, Tappa Daudzai, in favour of Fazal Mahmood, son of Sheikh Ghulam Rasool. It was stipulated in the deed that the property shall remain mortgaged with Fazal Mahmood, for a period of 60 years in lieu of Rs. 300 and after the expiry of that period Jumma Khan shall pay this amount to Fazal Mahmood within two months, failing which the latter .shall be considered to have become the full owner. Mutation No 14 on the basis of this deed was attested on 8th June 1899. Gul Hakim, a first cousin of Jumma Khan, the only heir left by that gentleman, instituted a. suit on the 20th of November 1948, against Abdur Rahman, Abdul Kbaliq and Ghulam Murtaza, sons of the said Fazal Mahmood for possession by redemption of the property ‑mentioned above on payment of Rs. 300. In Para No. 5 of the plaint, giving reasons for bringing the suit before the expiry of 60 years, the plaintiff stated that the defendants had asserted full ownership to the property in. dispute, and had also demolished the old Miana and constructed a new house thereupon, thus violating the terms of the contract.
The suit was resisted by the defendants on several grounds. They contended that the . original transaction was in fact a sale, that the suit was not within time, and that it was premature on the showing of the plaintiff himself.
The following issues besides the issue of relief, were framed in the case :‑
(1) Whether the transaction in question is sale out and out and not a mortgage ?
(2) Whether the suit is premature?
(3) Whether the suit is barred by time?
(4) Whether the plaintiff is barred by his conduct, and acquies cence from making the present claim ?
(5) Whether the transaction in question was the subject of pre‑emption suit, and if so, with what effect?
(6) Whether defendants are estopped from questioning the nature of the transaction in dispute ?
(7) Whether defendant's father Abdur Rahman Khan bad purchased the rights of the other heirs of Fazal Mahmood, if so with what effect?
(8) Whether defendants are in adverse possession for more than 12 years ?
So far as issue No 7 is concerned, it appears that Abdur. Rahman died before the issues were framed, and his legal representatives were brought on the record, who alleged that Abdul Khaliq and Ghulam Murtaza defendants Nos. 2 and 3 bad sold their share in favour of Abdur Rahman, and they were therefore, no more interested in the property at all.
The learned trial Judge (Mr. Abdur Rashid Khan) passed a preliminary decree for possession of the suit property in favour of the plaintiff against the defendants by redemption on payment of Rs. 300. This amount was to be deposited within six months, failing which it was ordered that the suit shall stand dismissed with costs.
There was an appeal against this order, which was dismissed with costs by the Additional Judge Peshawar, on 30th July 1952. The defendants have come up in revision to this Court.
Only the following three questions have been argued before me by the learned counsel for the petitioners :‑
(1) that the transaction in dispute was as a matter of fact sale and not mortgage.
(2) that the suit was barred by time, and
(3) That the suit was premature.
Point No. 1.‑The argument on this point is based on a suit, which was brought by one Kazi Abdur Rab on 7th October 1899, against Fazal Mahmood for possession by pre‑emotion of the suit‑property. It was alleged. in the plaint by Kazi Abdur Rab, that although the property ostensibly had been mortgaged by the mortgage deed dated 6th October 1898, by Jumma Khan in favour of Fazal Mahmood for a period of 60 years, in fact it wasa sale, and he was, therefore; entitled to get it in preference to Fazal Mahmood. That suit was dismissed by Mr. Rahim Bakhsh Munsiff 1st Class on 17th January 1900. An appeal against that order was dismissed by the Division judge on 3rd January 1901. A revision petition against his order met the same fate in the Chief Court Punjab on 27th January 1904. perusal of the judgment of their Lordships of the Chief Court would show that they did not go into the question whether the transaction in dispute was a mortgage or a sale, they only decided the case on the point whether the plaintiff bad a superior right of pre‑emp tion or not, and holding that be did not they dismissed the petition with costs. Jumma Khan or his legal representatives were no party to that suit. Fazal Mahmood in his written statement as well as in his statement in Court specifically stated that the transaction in dispute was not a sale, but was a mortgage by conditional sale, After the pre‑emotion suit was decided, Fazal Mahmood started asserting his ownership to the property in dispute. He made an application to a Revenue Officer, saying that he had been declared as an owner of the pro perty in dispute by the Chief Court Punjab, and the revenue‑entries should, therefore, be altered in the light of that judgment showing that redemption of the mortgage and himself as the full owner of the property in dispute. Two mutations on the basis of this application were entered i.e., No. 58 of the redemp tion of the mortgage, and No. 59 of the full ownership of Fazal Mahmood. Gul Hakim plaintiff, who was then a minor, appeared before the Revenue Officer and objected to the alteration of the revenue‑entries, but the Revenue Officer did not pay any heed to his objections. and holding that the Chief Court had in fact declared Fazal Mahmood as the owner of the property in dispute, attested both the mutations on the 11th of July 1906. The learned counsel for the petitioners has urged, in view of the assertion of Fazal Mahmood in 1906, that he was a full owner of the property in dispute, be became a full owner irrespective of the fact w‑bather in reality he was the owner thereof or not. I have not been able to understand the logic or the sense of this argument. It is a fundamental principle of the law of mortgage, that a mortgagee, who comes into possession of a certain property under a mortgage cannot so long as he does not surrender the possession of that property to the mortgagor, and then retake it, assert his ownership to it, or deny the mortgagor's right to redeem it. In face of this, and of Fazal Mahmood's own written statement and statement in Court in the pre‑emotion suit, I fail to see how can his subsequent assertion make any difference with regard to the nature of the transaction, which certainly was a mortgage by a conditional sale:
The learned counsel for the petitioners then contended that as Fazal Mahmood, and after his death, his heirs have been entered in the revenue papers right from 1906 up to the present time as the owners of the property, and as these entries must be presumed as correct according to the Court that they are the owners of the property and not the mortgagees. This arguments like the first argument, is also devoid of all force. No doubt the presumption of correctness is attached to the entries in the Jamabandis, but then this presumption is always rebuttable and in this case, in my view, it has been rebutted completely and without any doubt. I am consequently of the opinion that the decision of the two Courts below, that the transaction in dispute was a mortgage and not a sale is correct and must be upheld.
Point No. 2.‑The argument advanced on this point is that it was in 1906 that Fazal Mahmood asserted hostile title to the property in dispute in the presence of Gul Hakim, and it was on that assertion that the revenue entries were altered. It was the duty of Gul Hakim, it is argued, to have those entries corrected within six years of the alteration under Article 120 of the Limita tion Act.
It is a well settled law that a mortgagee, who comes into possession as such cannot force the mortgagor to come into Court merely by asserting a proprietary title to the property mortgaged. No party to a mortgage by its unilateral act can prejudice the title of the other. In my view, therefore, the mere fact that Fazal Mahmood asserted a hostile title to the property in dispute and thus had entries made in the revenue papers in his name as a full owner, could not force Gul Hakim to come into Court in order to correct those entries. Gul Hakim could at any time so long as the mortgage subsisted come into Court and sue for its redemption.
Point No. 3.‑The mortgage having come into existence on 6th October 1898, 60 years would expire on 6th September 1958. Its having been brought in November, 1948, is on the face of it premature, but then in my view, Fazal Mahmood is exclusively responsible for it. It was he who in 1906 against the contract of mortgage as well as his own written statement and statement in Court denied the real nature of the contract, and thus endangered the right of redemption. No doubt, the right to redeem and the right to foreclose are co‑extensive, but then this principle will not apply when the mortgagor or the mortgagee has committed a default to perform his part of the contract. When a contract of mortgage is entered into, then both parties to the mortgage under take not to deny each other's rights under the mortgage, meaning thereby that the mortgagee would not deny the title of the mortgagor to the property, and his consequent right to redeem it, while on the other hand the mortgagor would not deny the right of the mortgagee to foreclose or recover the money due under the mortgage. If anyone of the two parties denies such a right, then he gives a cause to the other party to rescind the contract in its entirety. It will be most inequitable to allow a person to remain in possession of a certain property originally mortgaged to him, to which he asserted his title doggedly. That would endanger the mortgagor's right to redeem the property. This is the principle which was recognized in Durga Charan Majji v. Poresh Bewa reported as (76 I C page 336.), A view similar to this was taken in A I R 1927 Oudh page 12, and A I R 1925 Madras page 825. I consequently on this point too agree with the two Courts below, and hold that the mortgagor is in law and equity entitled to redeem the property before the expiry of the time stipulated in the contract.
The result is that I do not see any force in this revision petition, which is hereby dismissed with costs. Pleader's fee ...... Rs. 50.
Orders announced.
A. H. Petition dismissed.