# Thota Ohina· Subba Rao v. Mattapalli Raju

- **Citation:** [1963] 3 S.C.R. 302
- **Court:** Supreme Court of India
- **Decided:** 1962-05-04
- **Case number:** Civil ApRaghubar Dayal J, peal No. 533 of 1960
- **Bench:** K. c. DAS GUPTA, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/thota-ohina-subba-rao-v-mattapalli-raju-2618
- **Pages:** 10

## Headnote

Land Reform-Vesting of land in ti,le Go1!ernment-Mort·
',_
gage money paid-Whether mortg1ge subsists until vesting -
1
Failure of mortgagee to perform his duti<S after reaipt of
mortgage money-Right created in favour of mortgagor, if a right
of redemption-Transfer of Property Act, 1882 (IV of 1882),
••· .58. 60-Code of Civil Procedure, 1908 (Act 5 of 1908),
O. XXXIV, r. 7-Bihar Land Reforms Act, 1950 (Bihar XXX
of 1950), as. 3. 4-Bihar Land R~form• Act, 1950 ns amended by
Bihar Land R,forms (Amendment) Act, 1959 (XVI of 1959),
s. 6 (1) (c).
Th~ pr.-sent petitioners were respondents in
C. A.
No. 533/60 and the μ"sent respondents were the appel·
lants in th•t appeal. The appeal wa• allowed by this
Court on the gr~und that the respondents had lost their
rigHt to recov~r possession from the appeHants on their estate
v<Sting- in the State of Bihar by virtue of ss~ 3, 4 of the Bihar
Land Reforms Act, 1950, and their having no subsisting right
to recover 'pos~esdon from the appellant111.
It was further
held that they could not take advantage of the provisions of
Y.·
s 6 (1) (c) nf that Act as amended by Bihar Land Refo'ms
(Amendment) Act, 1959 (Act XIV of 1959), as no mortgage
subsisted on that date.
In the present petition for review it
is contended that the view that the mortgage was not
subsist~
ing on the date of vesting is wrong because even though the
respondent mort~agors had paid up the mortgage money the
mortgage continued to subsist till the date of vesting as by
that time the right ofredumption given bv s. 60 of rransfer of
-~
Property had not come to an end.
Reliance was placed by
them, for this prop<,sition. on Thota Ohina Subba Rao v.
Matlapalli Raju, [1949] F.C.R. 484.
Held, that when the mortgage money is paid by the
mortgagor to the mortgagee, there docs not remain any debt
due from the mortgdgor to the mortgagee and therefore the
mortgagor: can no longer contin11e after the mortg(\ge money is
paid. The definition of usufructory mortgage it!'lelf leads to
the conclusion that the authority given to the mortgagee to
rewain in posse."-sion of the n1ort~aged property ceaSl"S wh«:"n the
tmortgage mnney has been paid up. If the mortga~e mone;
has bef"n received by the mortgagee and thereaftre he refuses
to perform the acts he is bound to do, the· mortagagor can
-
a s.c.R.
SUPREME COURT REPORTS
303
enforce his rights to get back the mortgage documents, the
possession the mortgaged property and the reconveyance of
that property through court. This new right is not the same
as his right of redemption ..
The case relied on by the petitioners, does not deal
with the circumstances under which the mortgage ceased to
exist. What it Jays down is simply that the right of redemption continues so long as the mortgage is alive.
Thota Ohina· Subba Rao v. Mattapalli Raju,
[1949]
F.C.R. 484, explained.
·
There can be nothing for enforcing a mortgage when
the money has been paid up and therefore the right to redeem
ceases on payment of mortgage money.
Samar Ali v. Karim-ul-lah I.L.R. 8 All. 402, Muhammad
Mahmud: Ali v. Kalyan Das, l.L.R. 18 All. 189, Balkrishna v.
Rangnath, I.L.R. !950 Nag. 618 and Ram Prasad v. Bishambhar
Singh, L.I.R. 1946 All. 400, approved.
Ci:vIL
APPELLATE
JURISDICTION : Review
Petition No. 26 of 1962 ..
Petition for Review of this Court's Judgment
and order dat,ed May 4, 1962, in C. A. No. 533 of
1960;
N. 0. Chatterjee, Ud'aya Pratap Singh, Anil
Kumar, R.K, Garg, D. P. Singh, S.0. Aggarwal and
M.K. Ramamurthi, for the petitioners.
B.K. Saran, S. K. Mehta and K. L. Mehta for
the respondents.
1962.
December 10. The judgment of the
Court was delivered by
196f/
Prithi J'lailcSingh
v.
Suraj Ahir
RA.GHUBAR DAYAL, J.-We allowed Civil ApRaghubar Dayal J,
peal No. 533 of 1960 on May 4, 1962, by our judgment
~ealing with the facts of the case and giving the
reasons f Jr the opinion expressed. It is not neces-
. sary to repeat them.
---t ·
Suffice it to say that the appeal was allowed
on the ground thfLt the reBpondents had lo

## Text

:l02
SUPREME COURT REPORTS [1963)
1aoa
PRITHI NATH SINGH AND OTHERS
Dtcen,ber JO.
'IJ,
SURAJ AHIR AND OTHERS
(K. c. DAS GUPTA and RAGHUBAR DAYAL, JJ.)
Land Reform-Vesting of land in ti,le Go1!ernment-Mort·
',_
gage money paid-Whether mortg1ge subsists until vesting -
1
Failure of mortgagee to perform his duti<S after reaipt of
mortgage money-Right created in favour of mortgagor, if a right
of redemption-Transfer of Property Act, 1882 (IV of 1882),
••· .58. 60-Code of Civil Procedure, 1908 (Act 5 of 1908),
O. XXXIV, r. 7-Bihar Land Reforms Act, 1950 (Bihar XXX
of 1950), as. 3. 4-Bihar Land R~form• Act, 1950 ns amended by
Bihar Land R,forms (Amendment) Act, 1959 (XVI of 1959),
s. 6 (1) (c).
Th~ pr.-sent petitioners were respondents in
C. A.
No. 533/60 and the μ"sent respondents were the appel·
lants in th•t appeal. The appeal wa• allowed by this
Court on the gr~und that the respondents had lost their
rigHt to recov~r possession from the appeHants on their estate
v<Sting- in the State of Bihar by virtue of ss~ 3, 4 of the Bihar
Land Reforms Act, 1950, and their having no subsisting right
to recover 'pos~esdon from the appellant111.
It was further
held that they could not take advantage of the provisions of
Y.·
s 6 (1) (c) nf that Act as amended by Bihar Land Refo'ms
(Amendment) Act, 1959 (Act XIV of 1959), as no mortgage
subsisted on that date.
In the present petition for review it
is contended that the view that the mortgage was not
subsist~
ing on the date of vesting is wrong because even though the
respondent mort~agors had paid up the mortgage money the
mortgage continued to subsist till the date of vesting as by
that time the right ofredumption given bv s. 60 of rransfer of
-~
Property had not come to an end.
Reliance was placed by
them, for this prop<,sition. on Thota Ohina Subba Rao v.
Matlapalli Raju, [1949] F.C.R. 484.
Held, that when the mortgage money is paid by the
mortgagor to the mortgagee, there docs not remain any debt
due from the mortgdgor to the mortgagee and therefore the
mortgagor: can no longer contin11e after the mortg(\ge money is
paid. The definition of usufructory mortgage it!'lelf leads to
the conclusion that the authority given to the mortgagee to
rewain in posse."-sion of the n1ort~aged property ceaSl"S wh«:"n the
tmortgage mnney has been paid up. If the mortga~e mone;
has bef"n received by the mortgagee and thereaftre he refuses
to perform the acts he is bound to do, the· mortagagor can
-
a s.c.R.
SUPREME COURT REPORTS
303
enforce his rights to get back the mortgage documents, the
possession the mortgaged property and the reconveyance of
that property through court. This new right is not the same
as his right of redemption ..
The case relied on by the petitioners, does not deal
with the circumstances under which the mortgage ceased to
exist. What it Jays down is simply that the right of redemption continues so long as the mortgage is alive.
Thota Ohina· Subba Rao v. Mattapalli Raju,
[1949]
F.C.R. 484, explained.
·
There can be nothing for enforcing a mortgage when
the money has been paid up and therefore the right to redeem
ceases on payment of mortgage money.
Samar Ali v. Karim-ul-lah I.L.R. 8 All. 402, Muhammad
Mahmud: Ali v. Kalyan Das, l.L.R. 18 All. 189, Balkrishna v.
Rangnath, I.L.R. !950 Nag. 618 and Ram Prasad v. Bishambhar
Singh, L.I.R. 1946 All. 400, approved.
Ci:vIL
APPELLATE
JURISDICTION : Review
Petition No. 26 of 1962 ..
Petition for Review of this Court's Judgment
and order dat,ed May 4, 1962, in C. A. No. 533 of
1960;
N. 0. Chatterjee, Ud'aya Pratap Singh, Anil
Kumar, R.K, Garg, D. P. Singh, S.0. Aggarwal and
M.K. Ramamurthi, for the petitioners.
B.K. Saran, S. K. Mehta and K. L. Mehta for
the respondents.
1962.
December 10. The judgment of the
Court was delivered by
196f/
Prithi J'lailcSingh
v.
Suraj Ahir
RA.GHUBAR DAYAL, J.-We allowed Civil ApRaghubar Dayal J,
peal No. 533 of 1960 on May 4, 1962, by our judgment
~ealing with the facts of the case and giving the
reasons f Jr the opinion expressed. It is not neces-
. sary to repeat them.
---t ·
Suffice it to say that the appeal was allowed
on the ground thfLt the reBpondents had lost their
111#
.l!riJJIJ Jf•lh Singh
••
au ... ; ..Wr
--
304
SUPREME COURT REPORTS [1963]
right to recover possession from the appellants on
their estate vesting in the State of Bihar by virtue
of ss. 3 and 4 of the Bihar Land Heforms Act, 1950
(Bihar Act XXX of 1950); hereinafter called the
Act, and their having no subsisting right to recover
possession from the appellants. It was also held
that they could not get advantage of the prov1s1ons
. of ol. (c) of sub-s. (1) of s. 6 of the Act as amended
by the Bihar Land Reforms (Amendment) Aot,
1959 (Act XVI of 1959) as no mortgage snbsisted on
the date of vesting, The amended ol.(c) read as
follows :
"( c) lands used for
agricultural or horticultural purposes forming the subject matter
of a subsisting mortgage on the redemption of
which the intermediary is entitled to recover
khas possession thereof."
It is contended for the re8pondents, who applied for the review of our judgment, that our view
tllat the mortgage was not subsisting on the date
of vesting was wrong. The contention is that even
though the respondents-mortgagors had paid up the
mortgage money in 1943, the mortgage continued
to subsist till the date of vesting as by that time
the right of redemption given by s. 60 of the Transfer of Property Act had not come to an end. That
right, according to the respondents' contention,
would not come to an end so long as the mortgagors' right to ask the mortgagees to perform any
of the acts mentioned in s. 60 . continue8. In· support of the contention that the mortgage continues
till the right of redemption comes to an end, reliance is placed on the case reported as Thota Ohina
Subba Rao v. Mattapalli Raju.( 1)
We do not agree
with these contentions.
·
Section 58 of the Transfer of Property Act
defines 'mortgage' to be a transfer of an interest
(I) [1949) F.C.R. •84, 498,
I
'
-~
3 S.O.R.
SUPREME COURT REPORTS
305
in specific immoveable property for the purpose of
iiecuring the payment of money advanced or to be
advanced by way of loan, an existing or future
debt, or the performance of an engagement which
may give rise to a pecuniary liability. It also
defines various
varieties of mortgage and, in
clause (d) defines 'usufructuary mortgage' thus:
"Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged
property to the mortgagee, and authorizes him
to retain such possession until payment of the
mortgage-money, and to receive the rents and
profits accruing from the property or any part
of such rents and profits and ~o appropriate
the same in lieu of interest, or in payment of
the mortgage money, or partly in lieu of inter·
est or partly in payment of the mortgage-
:money, the transaction is called an usufruotuary mortgage and the mortgagee an usufructuary mortgagee."
When the mortgage money if! paid by the mort·
gagor to the mortgagee, there does not remain
any debt due from the mortgagor to the mortgagee,
and therefore the mortgage can no longer continue
after the mortgage money has been paid. The
transfer of interest represented by the mortgage
was for a certain purpose, and that was to secure
payment of money advanced by way of loan.
A
security cannot exist after the loan had been paid
up. If any interest in the property continues to
vest in the mortgagee subsequent to the payment
of the mortgage money to him, it would be an in·
terest differ6nt from that of a mortgagee's interest.
The mortgage as a transfer of an interest in immoveable property for the purpose
of securing pay·
ment of money advanced by way of loan' must
come to an end on the payment of tlJ.e mortgag@
Jnoney.
'
lflo!l
Pr/thi N•lh 8in11
Y.
Sutaj Ahir
Ra,ljui•r Dc,111 •
196•
Rrithi Nath SingB
v.
Suraj Ahir
. ROghubar Dayal J.
· 306
SUPREME COURT REPORTS [1963]
Further, the definition of usufructuary, mort·
gage itself leads to the conclusion that the autho·
rity given to the mortgagee to remain in possession
of the mortgaged property ceases when the mort·
gage money has been paid up.
The . usufructuary
mortgage, by the terms of its definition, authorises
the mortgagee to retain possession only until payment of the mortgage money, and to appropriate
the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or
partly in lieu of interest or partly in lieu of pay.
ment of the mortgage money. When the mortgage
money bas been paid up, no question of appropriating the rents and profits accruing from the proper·
ty towards interest or mortgage money can arise.
It is clear therefore that on the payment of the
mortgage money by the mortgagor to the mortgagee
the mortgage comes to an end and the right of
the mortgagee to remain in possession also comes to
an end.
The relevant portion of s. 60 on which the
respondents rely reads :
"60. At any time after the principal
money has become due, the mortgagor has
a right, on payment or tender, at a
proper
time and place of the mortgage-money, to
require the mortgagee to <leliver to the mortgagor the mortgage deed and all documents
·relating to the mortgaged property which are
in the possession of power of the mortgagee
where the mortgagee is in possession of the
mortgaged property, to deliver possession
thereof to the mortgagor, and at the cost of
the mortgagor either to re-transfer the mortgaged property to him or to such third person
I ·as he may direct, or to execute and (where
the mortgage has been effected by a registered
instrument to have registered an acknowledgment in writing that any right in derogation of
'
j-
3 S.0.R.
SUPREME COURT REPORTS
307
his interest transferred to the mortgagee has
been extinguished :
Provided that the right conferred by this
section has not been extinguished by the act
of the parties or by decree of a Court.
The right conferred by this section is
called a right to redeem and a suit to enforce
it is called a suit for redemption.
:x:
x
.x
x
x
x
It is to be noted that these provisions do not
state when a mortgage ceases to be a mortgage.
They simply describe the right of a mortgagor to
redeem. Now, what is this right and, in what circumstances does it arise? The right arises on the
principal money, payment of which is securPd. by
the mortgage deed, becoming due. The right entitles the mortgagor, on his paying or tendering to
the mortgagee the mortgage money to ask him
(i) to deliver to him the mortgage deed and other
documents relating to the mortgaged property;
(ii) to deliver possession to the mortgagor, if the
mortgagee is in possession; and (iii) to re-transfer the
mortgaged property in accordance with the desit'e
of the mortgagor. If the mortgagee receives the
money and does not perform any of the three acts
required of him to be done, the question arises
whether this non-compliance with the demands will
make the mortgage continue. The provisions of the
section do not say so and there appears no good
reason why the mortgage should continue. If the
mortgagee is not to perform these acts, the mortgagor
is not to pay the amount. If, however, the mortgage money has been received by the mortgagee and
thereafter he refuses to perform the acts he is
bound to do, the mortgagor can enforce his right to
get back the mor~gage document, the possession of
the mortgaged property and the reconveyance of
1962
Prithi Nath Singh
v.
Suraj Ahfr
/laghubar Dayal J.
lffl
·i•hi N•"' Sin,h
••
Sur•J Alli•
-
.,hukr v.,.1 J.
308
SUPRmlE OOUHT REPORTS (1963)
that property through Court, A new right to get
his demands enforced through the Court thus arises
as a result of the provisions of s. 60 of the Act .
If the mortgage money has been paid and then
the mortgagor goes to Court to enforce his demands,
that would not be to enforce his right of redemption which was really his right to make those
demands on payment of the mortgage money.
The
right to demand the mortgagee to do certain things
on payment of the mortgage. money is different
from enforcing the demands subsequent. to the payment of the money.
This is also clear from the
decree for redemptiot). Order XXXIV, r. 7, C.P.C.
provides for the preliminary decree in a redemption
suit and the preliminary decree is to order that the
account be taken of what was due to the defendant,
viz., the mortgagee, at the date of the decree, for
principal and interest
on the
mortgage and
other matters. Rule 9 provides that if on such
accounting, any sum be found due to the mortgagor,
the decree would direct the mortgagee to pay such
amount to the mortgagor. If the mortgage money
due has been already paid by the mortgagor and
has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such
accounting arises and therefore any suit to ·enforce
the return of the mortgage deed and to get back
the possession of the mortgaged property cannot be
a suit for redemption.
What Thota Chin.a Subba Rao's Gase (1), referred to by learned counsel for the respondents, lays
down is simply this that the right of redemption
continues so long as the mortgage is alive. The case
does not deal with the circumstances in which the
mortgage ceases to exist. The following observation support, by implication, the view taken by us:
"The qocument passed in favour of the
wife of the mortgagor can be described as a
(1) [19'9] P,C.R. tlM, ~.
\.
1-
>
-'
·-
3 S.C.R.
SUPREME OOURT RE.PORTS
309
reward promiHed to her for bringing about
the willingness of her husband to agree to
convey the mortgaged lands to the mortgagees. 'fhat can in no event be considered as
extinguishing the equity of redemption. The
mortgagor was not even a party to that
document. The second document executed by
the mortgagor is an agreement to convey the
lands after three months, There is however
no document or evidence to show that the
mortgagees agreed to accept these lands in
full satisfaction of their claims or promised
to pay the sum of Rs. lllO mentioned therein.
This was only an agreement to convey the
lands after three months, and, if at all the ·
question of extinction of the equity of
redemption could arise on the conveyance
being executed but not before."
There are other cases also which throw ·a
light on this question a.nd go against the contention
of the respondents.
In Samar Ali v. Karim-ul-lah (1) it was
said:
«Now, as I have said, the contract of
mortgage in the present case being subject to
the provisions of the Regulation, tbe charge
would have been redeemed as soon a.s the
principal mortgage money with twelve percent
interest had been realised by the mortgagee
from the profits of the property."
In Muhammed Mahmud Ali v. Kalyan
Das (2) it wa.s said:
"It cannot be disputed that the right of
redemption pre-supposes the existence of a
mortgage on certain property which at the
(I) ( 1886) I.L.R. 8 All. 402, 405.
(2) ( 1895) I.L.R. 18 All. 189,192·
110
Prithi N •Iii S"z Ii
v.
.
Surlj .. wr:
11.,,,. ... .,. 0.,.1 J.
frithf' Noi,h Singh
••
Sura; Ahir
B ~ghub'a-;i)'ayal J ·
310
SUPREME COURT REPORTS [l9ti3J
time of redemption is security for the money
due to the mortgagee. It therefore follows
that the only property which a second or
other subsequent mortgagee may redeem is
the property on which the first mortgagee is.
entitled to enforce his security. From the
very necessity of things the right of redemp·
tion can be exercised in respect of such property only as is subject to a.mortgage capable
of enforcement."
There can be nothing for enforcing & mqrtgage
when the money has ,been paid up .and therefore
the right to redeem ceases on payment of the mort-
.gage money.
'
In Balakrishna v.Rangnath (1) it was said:
"Now the right to redeem can only be
extinguished by act of parties or by a decree
of a Court. (See the proviso to section 60 of
the Trausfer of Proper~y Act). But when it is
by act of parties the Act must take the shape
and observe the formalities which the law
prescribes. One method is by payment in
cash.
In that event nothing is necessary
beyond the payment."
In Ram Prasad v. Bishambhar Singh \2 )
the
question formulated for determination was whether
the suit being a suit to recover possessipn of the
mortgaged property after the.mortgage money had
been paid off was a suit •against the mortgagee to
redeem' or 'to recover possession of immovable
property mortgaged'. Braund J., said:
"Now, it is quite obvious that that section
(s. 60 of the Transfer of Property Act) can
only refer to a case in which a mortgagor
under a subsisting mortgage approaches the
Court to establish his right .to red,eem and to
(I) l,L.R.1950 Nag. 618, 621.
(2) A.I.R. 19C6.All. 400,402.
\.,
3 S.C.R.
SUPREME COURT REPORTS
311
have that redemption carried out by the process of the various declarations and orders of
the Court by which it effects redemption. In
other words. s. tiO contemplates a case in
which the mortgage is still subsisting and the
mortgagor goes to the Court to obtain the
return of his property on repayment of what
is still due. · Section 62, on the other hand, is
in marked contract to s. 60. Section 62 says
that in the case of a usufructuary mortgage
the mortgagor has a right to 'recover possession' of the property when (In a case in which
the mortgagee is authorised to pay himself
the mortgage money out of the rents and
profits of the property} the principal money:
is paid off.
As we see it, that is not a case of
J,'edemption at all.
At the moment when the
rents and profits of the mortgaged property
sufficed to discharge the principal secured by
the mortgage, the mortgage came to , an end
aμd the correlative right arose in the mortgagor
•to reqover possession of the property'. The
framers.of the Transfer of Property Act have
clearly recognised the distinction between the .
procedure which follows a mortgagor's desire
to redeem a subsisting mortgage and the
procedure which follows the arising of a
usufructuary mortgagor's right.to get his property back after the principal has been paid
off."
We therefore hold that the mortgage was not
subsisting on the date of vesting, it having come to
an end on payment of the mortgage money in 1943.
11ind that the respondents cannot get the advantage
of s. 6(l)(c) of the Act.
We therefore dismiss the review petition. In
the cir<;iumstances of the case, there will be no order
81! .~O CQ/3~,B.
Petition dismissed.
Pritl1i Nath Singh
v.
Suraj Ahir
Roghubar 1'aJal J.