TaxTMI 
TaxTMI 
1928 (6) TMI 4
X X X X Extracts X X X X
X X X X Extracts X X X X
....bruary 1901, a deed of sale in favour of Ragha Mal in respect of the mortgaged property for a sum of Rs. 90. The sale-deed was never registered. The mortgagees and, after them, their successors-in-interest, continued to be in possession of the mortgaged property and are still in possession. Damodar died in 1914. His brother and heir, Krishna Ram, by a sale-deed dated 28th January 1919, professed to sell, the properties in suit to the plaintiffs who are the respondents in this appeal. They brought the suit, out of which this appeal has arisen, for redemption. 3. The suit has been met with the plea that the mortgagor sold his rights to the mortgagee by the deed of 1901 and, therefore, no right is left in Krishna Ram or his transferee to sue for redemption. The plaintiffs urge that the sale-deed, being unregistered, was not admissible in evidence and did not transfer any title of Damodar to Ragha Mal and that, therefore, the plea of Ragha Mal that he had become the owner of the property is unmaintainable. On behalf of Ragha Mal it was contended that, conceding that the deed of 1901 did not transfer any title to him, he, at least, begin to hold the property, from 1901, adversely to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t was essential that possession should change. It was this change in possession that was accepted as a criterion of transfer. It must, therefore, be taken that, when the legislature said that a transfer of tangible immovable property of the value of less than Rs. 100 could be made by delivery of the property, it meant actual delivery and not a constructive delivery. It follows that the document executed by Damodar did not effect a change in the title and there being no delivery of the property, no title passed to Ragha Mal. It further follows that, under Section 54, T.P. Act, the document which purported to be a sale-deed of tangible immovable property, already in the possession of the vendee, of the value of less than Rs. 100, was compulsorily registrable. 9. Again, if the interest of Damodar was an 'intangible property', the transfer could be made only by a registered document and in that case the registration of the document in question was compulsory under Section 54, T.P. Act. Whatever, therefore, may be the character of the property, which Damodar purported to sell, it could be effectually sold only by a registered deed. In this view it is not necessary to determin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rudest method is that which involves an actual transfer of ownership in the thing from the debtor to the creditor... and such is the English mortgage of lands or goods... except in so far as its theory has been modified by the determination of the Court of Chancery and of the legislature to continue, as long as possible, to regard the mortgagor as the owner of the property. 15. Similarly, Salmond in his Jurisprudence (Edn. 7, 1924) at p. 280 says: The right of the owner of a thing may be all but eaten up by the dominant rights of lessees, mortgagees and other encumbrances. His ownership may be reduced to a mere name rather then a reality. Yet, he, nonetheless remains the owner of the thing, while all others own nothing more than "rights" over it.... He, then, is the owner of a material object, who owns a right to the general or residuary uses of it, after the deduction of all special and limited rights of use vested by way of encumbrance in other persons. 16. That eminent writer of treatises of law, Pollock, in his "First Book of Jurisprudence" (Edn. 5 1923, at pp. 179 and 180) says: We must not suppose that all the powers of an owner need be exercisable at once or imme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he mortgagee, from the date of the mortgage, becomes the "legal" owner of the property and nothing is left an the mortgagor except what has been called "a bare equity of redemption." Indian Legislature has intentionally refused to import the expression "equity of redemption" and for ample good reasons. It had however to use the expression" right to redeem" (see Section 60, T.P. Act). But the expression has been used in an entirely different sense. A "right to redeem" is not the same thing as "an equity of redemption in England." In India a host of people, besides the mortgagor himself, are allowed to exercise the right of redemption. See Section 91, T.P. Act. One of these persons is a judgment-creditor of the mortgagor. Certainly, the interest of a judgment-creditor of the mortgagor and the interest of the mortgagor himself in the property mortgaged are not identical. It would, therefore, be very very wrong to substitute the expression "right to redeem" for the English expression "equity of redemption," and, then, to say that the "right to redeem" possessed by a mortgagor is an intangible property. 20. The admissibility of the document in question has to be determined only if th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efects that may be pointed out by the Courts. By making the provisions of the Transfer of Property Act relating to registration supplemental to the Registration Act, the legislature simply declared that Section 4, T.P. Act, might be read, say, as "S. 17-A", Registration Act. But something more than this would be necessary for the Courts to hold that the legislature expressed themselves clearly, in their intention, if any, that the provisions of Section 49 would apply to the said "S. 17-A", Registration Act. I would, therefore, hold that Section 49 does not apply to the document of 28th February 1901. Further, it follows that there being no bar to the admissibility into evidence of the document of 1901 (the only bar alleged was Section 4.9, Registration Act) the document is admissible in evidence. 21. Point No. 2.-The contentions of the parties have been set forth above. Ragha Mal was in possession till the execution of the sale-deed, in his favour, as a mortgagee. His possession was therefore permissive and derivative. When Damodar, by execution of the document of 1901, told him that from the date of the execution of the document, he (Ragha Mal) became the owner of the property,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t create any difference, in principle. As I have already stated, the parties, by common agreement attempted to put an end to the mortgagee's estate. If the mortgagee's estate could come to an end, the mortgagor would be at once entitled to possession. If the mortgagor does not enter into possession, the mortgagee's possession would become adverse to the mortgagor, although the original estate, as a mortgagee, was not adverse to the mortgagor. As the result of the agreement between Damodar and Ragha Mal, therefore, the possession of Ragha Mal became adverse to Damodar from the date of the execution of the sale-deed, and after the lapse of 12 years neither Damodar nor his successor-in-title could claim the property. 23. For the reasons given above, I would answer the second question also in the affirmative. Kendall, J. 24. I have had the advantage of reading the judgment of my learned brother Mukerji and I am in agreement with the answers which he has given to the two questions referred to us for decision. In the view that we have taken of the effect of Section 4, T.P. Act, read with Sections 17 and 49, Registration Act, the document is admissible in evidence for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A similar opinion was expressed by a Bench of the Madras High Court in the case of Ramasami Pattar v. Chinnan Asari [1901] 24 Mad. 449, in which it is remarked: The equity of redemption in a usufructuary mortgage is only an intangible thing like a reversion... and it can be transferred by sale only by a registered instrument and not by delivery of the property. 26. This view is supported by a reference to Williams on "Real Property." With all respect to the learned Judges who expressed this opinion I would remark that in English Law: what is generally understood by the term mortgage is a conveyance of land or other property as security for the payment of money and the mortgagee has been held to be in law the owner of the mortgaged property. (See Williams on "Real Property," 24th edn., at p. 653 and the following pages.) In Section 58, T.P. Act, however, a mortgage is defined as: A transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan. 27. In Salmond's Jurisprudence, 6th edn., Chap. 12, the author points out that although strictly nothing can be owned except abstract rights....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as pointed out, the reason for this is that there must be publicity of the fact that title has passed. In spite, therefore, of the fact that when the mortgagor executed this deed in 1901, his intention was to transfer what, in my opinion, was tangible immovable property, nevertheless as he actually did not deliver possession to the mortgagee in his new capacity of owner and there was no registered deed, the transfer was not valid. 30. We have held the document to be admissible in evidence to prove the intention of the parties, that is to say, that Ragha Mal, who had hitherto been a mortgagee in possession, should become the full proprietor. It is true that their Lordships of the Privy Council have held that possession is never considered adverse if it can be referred to a lawful title, and it may therefore be argued that if Ragha Mal's position had ever been called in question before his death it would have been necessary to hold that his possession was that of a mortgagee and not of a trespasser. In the case of Corea v. Appuhamy [1912] A.C. 230, however, in which the above proposition is quoted with approval, their Lordships have remarked that even where such a lawful title....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g possessed. It must accordingly be property which is capable of delivery of possession from one person to another. A mortgaged property itself is undoubtedly "tangible," but the interest of the mortgagor in the property, when the mortgage is usufructuary, is not identical with the property itself, as some interest has already passed to the mortgagee including the right to remain in possession and appropriate the profits. The interest which the mortgagor possesses is not itself capable of being touched, nor is it such that an actual delivery of its possession can be effected by the mortgagor to the mortgagee. It seems difficult to conceive of a thing as being tangible when it is not capable of actual delivery of possession. Although therefore the mortgagor is the legal owner of the usufructuarily mortgaged property, whatever rights he possesses, so long as the mortgage subsists, cannot be treated as "tangible." The subject matter of ownership is "tangible" but the interest which the mortgagor can transfer is "intangible." 34. No case has been cited before us where it has ever been suggested that the interest of a mortgagor in the case of a usufructuary mortgage is "tangible" imm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....expressed by Macleod. J. in the case of Dawal Piranshah v. Dharma Rajaram [1917] 41 Bom. 550 and followed in the case of Rama Sahu v. Gouro Ratho A.I.R. 1921 Mad. 3(SIC)7. 38. Even if Section 49 were applicable, the document cannot be received as evidence of any transaction affecting immovable property. It is inadmissible for the purpose of showing that a transfer was effected, but there is no prohibition against its use for the collateral purpose of showing the nature or character of possession. If instead of the word "affecting," the words "purporting to affect" had been used, the conclusion might have been different; but as the section stands, an attempt to show the nature of possession is not giving evidence of a "transaction" of transfer. Proof of possession is not proof of the transaction of sale. 39. On this point the authorities are overwhelming. I may only refer to the cases of our own High Court: Jamphu v. Kutramani [1917] 19 All. 693 and other cases cited hereafter. 40. The last question is whether in spite of the ineffectual sale the mortgagee has acquired adverse possession over the property. This point is not free from difficulty. If we consider the position ....