Ram & Anr Vs. Lachhman  Insc 322 (13 July 2001)
Brijesh Kumar D.P.Mohapatra, J.
question that arises for determination in this appeal is whether the High Court
is right in dismissing the suit filed by the appellants as barred by
limitation. The trial court and the first appellate court had answered the
question in favour of the plaintiffs holding that the suit was filed within
time. The answer to the question depends on whether the suit is one for
redemption of the mortgage or is one for recovery of possession of the property
which had been mortgaged by predecessor of the plaintiffs with the father of
the defendants. Another question which arises in this connection is whether the
Himachal Pradesh Debt Reduction Act, 1976 (Act 31 of 1976) provides a fresh
cause of action to the debtor/mortgager to recover the mortgaged property.
father of the appellants mortgaged with possession the suit property with
father of the respondents on 26 Magh 2003 (BK) corresponding to February 19, 1946 for a consideration of Rs.830/-.
The appellants who succeeded to the suit land after death of their father made
an application on 2.4.1979 to the Collector, Ghumarwin, under section 4 of the
H.P. Restitution of Mortgaged Lands Act, 1976. It was dismissed by the
Collector on 1.12.1980 as barred by time. The plaintiffs thereafter filed the
suit for possession of the land in dispute under sections 4 and 5 of the H.P.
Debt Reduction Act, 1976 (for short 'the Act'). The defendants contested the suit,
on grounds, inter alia, of limitation. The trial court though answered the
issue of limitation in favour of the plaintiffs dismissed the suit on the
ground of maintainability in view of the dismissal of their application by the
Collector. The first appellate court reversed the finding of
non-maintainability of the suit; confirmed the finding of the trial court that
the suit was filed within time and decreed the suit. The High Court in second
appeal reversed the concurrent findings of the courts below on the question of
limitation and dismissed the suit on that score. Hence this appeal.
determination of the question formulated earlier it is necessary to note some
relevant provisions of the Act.
Act as its name shows was enacted to provide for the reduction of debt in the
State of Himachal
section 2 (ix) of the Act the expression "loan" is defined as advance
in cash or kind and includes any transaction which in substance amounts to such
advance but does not include an advance by the Central or State Government or
by a local authority authorised by the State Government to make advances, by a
co-operative society or by a bank or by the Life Insurance Corporation of India
or a loan taken or used for the purposes of trade.
section 2(xi) "principal" means the amount originally advanced.
section 2(xiii) "suit to which this Act applies" means any suit or
proceeding relating to a loan.
section 2 (xiv) "debtor" is defined to mean a person who receives a
loan as defined under the Act.
III in which sections 5 to 9 are included deals with "Suits and
Decrees". The sections in the chapter contain non-obstante clauses giving
the provisions therein overriding effect over any law for the time being in
force or decree or contract or agreement to the contrary.
6 provides that notwithstanding the terms of any contract regarding the date or
dates on which a debt shall become due; a suit to which this Act applies for
the redemption of a mortgage or for accounts may be instituted by a debtor at
any time after the commencement of this Act. (emphasis supplied).
section 7 which starts with a non-obstante clause provision is made for
application of the provisions of the Act for amendment of a decree for
reduction of the amount due according to the provisions of the Act.
8 which mandates the Court to determine the principal and take into account all
sums paid by or on behalf of the debtor and in the case of a mortgage with
possession, the net profits realised by the mortgagee reads as follows:
(1) In a suit to which this Act applies or in an application made in a suit to
which this Act applies or in amending a decree under the provisions of section
(7) the Court shall, notwithstanding, anything to the contrary in any law
decree or contract or in any agreement purporting to close past transactions,
determine the principal and take into account all sums paid by or on behalf of
the debtor and in the case of a mortgage with possession, the net profits realised
by the mortgagee or which with the exercise of ordinary diligence might have
been realised by him and shall determine the amount, if any, due by the debtor
in accordance with the provisions of sub-sections (2) and (3).
that for the purpose of determining the principal, the court shall treat as
principal any accumulated interest which has been converted into principal at
any statement, of account or any contract in the course of transaction made
before the first day of January, 1917 but shall treat as interest any accumulated
interest which has been converted as aforesaid at any such statement,
settlement or contract made on or after the date.
The amount due by the debtor shall not exceed the amount that could have been
due if the rate of interest had been, in the case of a secured loan, 6 per cent
per annum simple interest, and in the case of unsecured loan, 12 per cent per
annum simple interest.
The total amount due by the debtor as interest and principal shall not in any
case exceed –
respect of a loan advanced before the commencement of this Act, twice the
amount of the principal less any amount already received by the creditor in
excess of the amount due under sub-section(2);
respect of a loan advanced after the commencement of this Act, twice the amount
of principal less any amount already received by the creditor.
Nothing in this section shall entitle the debtor to a refund of any sum already
paid by him." In Section 9 it is laid down that notwithstanding anything
contained in section 34 of the Code of Civil Procedure, 1908 the court shall
not order future interest on the aggregate sum adjudged in a decree to which
this Act applies or any decree amended under the provisions of this Act, at a
rate exceeding three per cent per annum simple interest.
11, one of the provisions in dealing with "Execution of Decrees"
reads as follows:
(1) Notwithstanding anything contained in this Act or in any other enactment
for the time being in force, a final decree for foreclosure shall not be passed
in respect of the agricultural land of a debtor in a suit to which this Act
applies. Nor shall such land be sold or otherwise transferred in execution of a
decree to which this Act applies.
that the court may execute a decree to which this Act applies by granting to
the decree-holder a self liquidating usufructuary mortgage of such land for a
period as the Collector may decide under sub-section (4) subject to the
provisions of sections 16 and 17.
also that when a mortgage has been granted under the provisions of this
section, the same land shall not be mortgaged in execution of any other decree
to which this Act applies against the same debtor or his heir or successor if
the term of the mortgage together with the term or terms of the previous
mortgage or mortgages exceed twenty years.
The form, terms and conditions of a mortgage granted under the first proviso to
sub-section (1) and the amount to be paid by the debtor at any time for the
redemption of such mortgage shall be such as may be prescribed.
Notwithstanding anything contained in the Code of Civil Procedure or any other
law for the time being in force, whenever a civil court order that the land be
attached and alienated temporarily in the execution of a decree for the payment
of money, the proceedings of such attachment and alienation shall be
transferred to the Collector.
supplied) According to section 22 in Chapter V titled 'miscellaneous' a debtor
may sue for an account of loan and in such suit the Court shall allow only such
interest as may be permissible under the Act. It shall after taking necessary
accounts declare the account which is still payable by the plaintiff to the
defendant and shall on the application of the defendant, if the money is
payable, pass a decree in favour of the defendant.
object of the Act and the scheme underlying it as obtained from the provisions
made therein is to grant relief to debtors and enable them to get back
properties mortgaged by them with possession for a loan. The use of expression
"at any time" for making an application or filing a suit is
indicative of the legislative intent that the Act provides a fresh opportunity
to the debtor for getting relief under the Act. The legislature has taken care
to make the relevant provisions of the Act granting relief to debtors by giving
overriding effect over any law, agreement, contract or decree contrary to the
provisions of the Act. It was not disputed before us during hearing of the case
that the plaintiffs filed the suit under provisions of the Act for restoration
of the possession of the mortgaged property.
there is no decree for foreclosure in favour of the creditor/mortgagee.
backdrop of the above the question of limitation is to be considered. The
reason given by the High Court in support of the finding that the suit was
barred by limitation is that more than 30 years had elapsed since the date of
the mortgage (February, 1946) when the suit was filed in 1981.
the mortgagor had lost his right to redeem the property mortgaged. The
provisions in section 27 of the Limitation Act have been considered in support
of the finding. This reasoning appears to us to be fallacious. It defeats the
object and the purpose of the statute enacted by the legislature specially to
give relief to debtors in the State. The first appellate Court had given cogent
reasons in support of its finding in favour of the appellants. The Court held
and in our view, rightly that the suit was one for recovery of possession from
the mortgagee who was in unauthorised possession of the mortgaged property
after the mortgage loan was satisfied. The cause of action for filing such a
suit under the Act arose when the enactment was enforced in 1979. Viewed from
that angle the suit was filed in time and the trial court and the first
appellate Court rightly recorded the findings to that effect. The High Court
erred in reversing the concurrent finding of the courts below on the erroneous
assumption that the suit was one for redemption of the mortgage simpliciter. It
is relevant to note here that the present suit is not one filed under section
60 or 62 of the Transfer of Property Act. It is a suit filed for relief on the
basis of the Himachal Pradesh Debt Reduction Act, 1976.
discussions made in the foregoing paragraphs and for the reasons stated therein
the appeal is allowed with costs, the judgment of the High Court is set aside
and the judgment of the lower appellate court is confirmed. Hearing fee is
assessed at Rs.10,000/-.