Mortgagor's Right To Redeem Usufructuary Mortgage Not Time-Barred, Continues Till Decree Of Sale Is Passed During Foreclosure: Kerala HC

Kerala High Court reaffirmed the statutory sanctity of a mortgagor's right to redemption under a usufructuary mortgage, and provided clarification on several crucial provisions of property and civil law.

Justice Easwaran S, delivered the judgment in a civil dispute between family members over property rights, mortgage redemption and partition. The Court examined the redemption of usufructuary mortgage, Co Mortgagor's redemption and subrogation under section 92 of the Property Act, whether the registrar can be considered as an attesting witness under section 123 of the Property Act, and the applicability of section 68 of the Indian Evidence Act, 1872.

“The right of redemption is a statutory right and can be extinguished only by the stipulations contained under the proviso to Section 60. Proviso to Section 60 says that the right conferred under the section can be extinguished by the act of the parties or decree of a court. It must be remembered that when the right of redemption is curtailed on the ground that the suit is not filed within 30 years from the date of mortgage, then the same will be in conflict with the provision to Section 60 of the Act of 1882.” court observed.

"In the absence of any suit for foreclosure, going by the principle, once a mortgage is always a mortgage, the right to redeem the mortgage continues until a decree for sale is passed in a suit for foreclosure and that the property is put for sale upon a final decree being passed. Therefore, the trial court as well as the first appellate court erred egregiously in holding that the suit for redemption of mortgage was time barred," it added.

The counsel for the appellants argued that the suit of redemption is not barred. It was argued that the defendants had no cause of action for preferring a counterclaim, and the cause of action for preferring the counterclaim would arise immediately on execution of the gift deed.

The counsel for respondents submitted that the suit of redemption of mortgage ought to have been filed within a period of 30 years when the right to redeem or to recover possession accrues.

The court rejected the trial and appellate court's finding that the suit was time-barred, clarified that section 61 of the Limitation Act, 1963 must be read harmoniously with section 60 of the Transfer of Property Act. The Court noted that the limitation does not begin to run merely on expiry of 30 years from the execution of the mortgage deed in a usufructuary mortgage, as redemption rights are continuous unless legally extinguished.

The Court considered the validity of a contested gift deed, which has been rejected by lower courts for alleged non-compliance with section 123 of the Transfer of Property Act. Justice Easwaran clarified that “There is no bar under Section 123 of the Act, 1882, for a Registrar to be an attesting witness, provided he has signed the gift deed with the required animus”

The Court examined the applicability of section 68 of the Indian Evidence Act, 1872. Relying on Surendra Kumar v Nathulal and Anr [2001(5)SCC46], the court stated that the requirement under the section 68 arises only if the executant has denied the execution. The Court observed that in the present case, the executant has not denied the execution of the gift deed during his lifetime and hence, the challenge of the deed was legally unsustainable.

The Court relied on Jag Mohan Chawla v Dhera Radha Swami Satsang [(1996) 4 SCC 699], while examining whether counterclaim was maintainable and observed that the cause of action of the counter claim is entirely different and the plaint schedule property is also different, hence the such claim is not maintainable.

Thus, the appeals were allowed.

Case Title- Sivanandan & Ors v Ani and Anr

Case No - RSA 974 of 2011

Citation -2025 LiveLaw (Ker) 430

Counsel for Appellants - K Rajesh Kannan, A S Shammy Raj, P Shanes Methar, G S Reghunath

Counsel for Respondents- B Krishna Mani

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