2003 (12) TMI 672 - SC - Indian Laws

Summary

Issues Involved:
1. Redemption of mortgage.
2. Subrogation rights of redeeming co-mortgagor.
3. Limitation period for filing suit.
4. Maintainability of suit for partition and possession.
5. Applicability of Section 92 of the Transfer of Property Act.
6. Impact of family partition on mortgage redemption.

Detailed Analysis:

1. Redemption of Mortgage:
The property in question was subject to an usufructuary mortgage, and after a partition, one of the co-mortgagors (defendant No. 1) redeemed the property by paying the full mortgage amount. The plaintiff, an assignee from certain non-redeeming co-mortgagors, filed a suit in 1971 seeking declaration of title and recovery of possession or, alternatively, partition.

2. Subrogation Rights of Redeeming Co-Mortgagor:
The main legal issue was whether the redeeming co-mortgagor (defendant No. 1) could claim the rights of the original mortgagee and whether the plaintiff's suit was maintainable without a specific prayer for redemption. The court examined Section 92 of the Transfer of Property Act, which deals with subrogation by operation of law, and concluded that the redeeming co-mortgagor does not become a mortgagee but holds certain rights akin to those of the mortgagee for the purpose of reimbursement.

3. Limitation Period for Filing Suit:
The High Court initially held that the suit was essentially one for redemption and was barred by limitation under Article 148 of the Limitation Act, 1908. However, the Supreme Court clarified that the suit was primarily for partition and the limitation period should be governed by Article 120 of the Limitation Act, 1908, which pertains to suits for partition.

4. Maintainability of Suit for Partition and Possession:
The Supreme Court held that a suit for partition filed by a co-owner-cum-co-mortgagor is maintainable and the limitation for such a suit would be the period prescribed for partition suits. The equitable right of the redeeming co-mortgagor to seek reimbursement does not convert the suit into one for contribution or redemption.

5. Applicability of Section 92 of the Transfer of Property Act:
The court emphasized that Section 92, which deals with subrogation, does not create a mortgagee-mortgagor relationship between co-mortgagors. Instead, it provides the redeeming co-mortgagor with rights akin to those of the mortgagee for the purpose of reimbursement. The redeeming co-mortgagor can exercise rights of foreclosure or sale as if he were the mortgagee, but this does not make him a mortgagee.

6. Impact of Family Partition on Mortgage Redemption:
The court noted that whether the family was joint or had partitioned before the redemption did not affect the legal principles applicable. The redeeming co-mortgagor's rights and the non-redeeming co-mortgagor's obligations remain the same irrespective of their status as joint tenants or tenants-in-common.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the trial court's decree. The suit was held to be within limitation, and the plaintiff was entitled to a preliminary decree for partition. The court also noted that during the final decree stage, practical difficulties in dividing the property could be addressed, potentially through alternative modes of satisfying the parties' claims.