Find a Lawyer

Civil Appeal No. 28‑P of 1984, decided on 12th September, 1985.

(On appeal from the judgment of the Peshawar High Court, dated 27‑4‑1984, in C. R. 211/81).

‑‑ Art. 185‑Limitation Act (IX of 1908), Ss. 28 & 19 & Art. 148‑-- Displaced Persons (Land Settlement) Act (XLVII of 1958), S. 4 Land mortgaged to person who subsequently became evacuee‑ Re demption‑Limitation‑Leave to appeal granted to consider questions whether mortgagee had right to redeem mortgage which had lost due to efflux of time (expiry of 60 years) ; whether notwithstanding acquisition without encumbrance by Central Government and notifi cations permitting redemption, S. 28 and Art. 148, Limitation Act, 1908 and other laws relating to redemption would continue to have operation; and whether S. 19, Limitation Act, 1908 would govern case vis‑a‑vis Government's conduct in accepting ‑position of mortgage in revenue records, as also in said notifications, if same was treated as acknowledgment of mortgage, which as contended amounted to acknowledgment.

‑‑ S. 4‑Chief Settlement Commissioner Lever No. 1980‑60/148, dated 22‑4‑1960‑Chief Settlement Commissioner Memo. No. 6883‑59/7042 R(P), dated 8‑12‑1959‑Transfer of mortgage rights in favour of Hindu mortgagee who subsequently became evacuee Redemption of such mortgage‑Limitation‑Notification under S. 4, in no way, destroyed rights of non‑evacuee in land in which evacuee had any right under mortgage‑Successor‑in‑interest of mortgagor therefore, continued to have a right to equity of redemption in such property, notwithstanding acquisition of evacuee's interest therein by Central Government as Central Government merely stepped into shoes of evacuee and was vested only with rights of mortgage and nothing more.

Muhammad Khan v. Chief Settlement and Rehabilitation Commissioner P L D 1962 S C 284 ref.

--------S. 4 ‑ Chief Settlement Commissioner Memo. No. 6883‑59/7042‑R(P), dated 8‑12‑1959‑Chief Settlement Commissioner Memo. No. 1980‑60/1489‑R(P), dated 22‑4‑1960 ‑ Failure on part of mortgagor to redeem mortgage after issue of notice, only "evacuee rights in properties" shall be auctioned‑Government cannot claim any right beyond mortgage rights in respect of such mortgaged property in favour of evacuee.

‑‑S. 4‑Limitation Act (IX of 1908), Ss. 19, 28 and Art. 148‑Trans fer of mortgage rights in favour of Hindu mortgagee who subsequently became evacuee‑Mortgage created in 1916‑Redemption‑Limita tion ‑Government by notification acknowledged right of redemption of mortgagor and more particularly entry in revenue record showing mortgagor as owner/mortgagor and Central Government as mortgagee in 1969 which constituted acknowledgment in writing before expiration of period of limitation under S. 19, Limitation Act, 1908‑ Fresh period of limitation, held, accrued in favour of mortgagee in circumstances.

‑--‑‑O. VII, r. 7‑Court is empowered to grant such relief as justice of case may demand and for determining relief asked for, whole of the plaint must be looked into, so that substance rather than form should be examined.

S. Safdar Hussain, Advocate‑on‑Record for Appellant.

Sardar Akhtar Ali Khan, Advocate Supreme Court and Ch. Akhtar Ali, Advocate‑on‑Record for Respondents.

Date of hearing : 13th May, 1985.

The disputed property consisting of agricultural land was originally owned and possessed by one Khawas son of Shahbaz, who had mortgaged the same to a Hindu named, Hira Nand, vide Mutation No. 382, attested on 31st March, 1916. Sometime in 1928, Khawas died leaving him surviving a son named Abbas who succeeded to his right and interest in the land by way of inheritance. The said Abbas transferred the equity of redemption in the property by means of mutation No. 1449 attested on 21‑11‑1957, in favour of Samar Gul, the appellant herein. It appears that the Hindu mortgagee had migrated to India on the establishment of Pakistan. The mortgage rights of the non‑Muslim evacuee were transferred in favour of the Central Government by Mutation No. 1764, attested on 11th January, 1969. Thereafter the land in dispute was permanently settled on one Chhuntna son of Dheri vide R. L. 11 No. 67, in lieu of his claim on 27th September, 1973. It appears that after the permanent settlement of the land as stated above, Mutation No. 100 was effected on 9th September, 1977, on the basis of letter No. 1980‑60‑1489 R(P), dated 22nd April, 1960, issued by the Office of the Chief Settlement and Rehabilitation Commissioner, West Pakistan, Lahore. On the some day another Mutation No. 101 was attested, whereby the land was shown as having been transferred from the name of the Central Government of Pakistan in favour of Chhuntna. Again on the same day inheritance Mutation No. 102 was attested in favour of Mst. Hajira respondent No. 4 as the only daughter and heir of Chhuntna. Finally the last mutation No. 103 was also attested on the same day transferring the land in favour of respondent No. 5 from respondent No. 4 by way of sale.

2. The appellant, disputing the correctness and legality of the aforesaid Mutations No. 100 to 103 filed a suit in the Court of the Senior Civil Judge, Kohat, seeking a declaration that the aforesaid mutations were fraudulent, illegal and ineffective in law qua the rights of the appellant, and that the appellant was the lawful owner/mortgagor of the said land. In the alternative he prayed for a declaration that he is entitled to purchase the suit land under Settlement Scheme No. II framed under Settlement Laws and for a permanent injunction by way of consequential relief.

3. The suit was contested by Muhammad Hanif, respondent No. 5 and on the pleadings of the parties, the trial Court framed several issues but for the present purposes only issue No. 4 is relevant which reads as under :‑

"Whether the mortgage in dispute has become time barred,"

The trial Court gave its finding on this issue as under:

"The suit property was mortgaged vide Mutation No. 382 attested on 31‑3‑1916, and period of sixty years was completed on 31‑3‑1976, by excluding the date of attestation of the mutation. Patwari Rehabilitation stated that the suit property was not redeemed till 23‑3‑1978. The plaintiff had submitted application on 1‑8‑1977, at which time the mortgage was time‑barred. I decide this issue in favour of the defendants."

In view of the above‑said finding the learned Senior Civil Judge, Kohat, dismissed the suit on 3rd January, 1980. On appeal the learned District Judge, Kohat, affirmed the finding of the trial Court and dismissed the appeal of the appellant on 22nd January, 1981. On the issue of limitation, the learned District Judge observed:

"It is in the statement of Samar Gul P. W. 4 that he made only an application to A. C. Kohat for cancellation of the mutation in 1977, he was required to have filed a suit for redemption from 1977 he was required to have filed a suit for redemption from 1957 before 31‑3‑1976 but he failed to redeem the suit land within the prescribed period of sixty years as provided under Article 148 of the Limitation Act. The plaintiff has not availed of the remedy provided to him under the law for redemption of the suit land and as such, the present suit instituted on 12‑5‑1977, before his application to A. C. Kohat, on 1‑8‑1977, is clearly barred by time and as such, he has got no cause of action and is not entitled to the cancellation of the mutations challenged by him in his suit."

4. Being aggrieved by the judgments and decrees passed by the two Courts below, the appellant finally went up before the Peshawar High Court Peshawar, in revision. By judgment dated 27th April, 1983, the ,learned Single Judge of the High Court dismissed the revision application of the appellant and agreeing with the view taken by the Courts below observed:

"By virtue of Mutation No. 1764, dated 11‑1‑1969 the mortgagee rights of the non‑Muslim evacuee were transferred in favour of the Central Government. It transpired that on the basis of instructions from the Settlement and Rehabilitation Commissioner contained in letter No. 1980‑60/148, dated 22‑4‑1960 Mutation No. 100 was entered which was followed by Mutations Nos. 101, 102 and 103. The revenue record, however, reveals that Mutation No. 103 in favour of Muhammad Hanif (respondent No. 5) was attested on 4‑1‑1977. The period of sixty years as allowed under Article 148 of the Limitation Act, in the instant case, was to expire on 31‑3‑1976. From the material available on the record it is abundantly clear that no efforts, whatsoever, were made by the petitioner to get the property redeemed before the expiry of the mentioned period. It is evident from the statement of Ajmal Khan Patwari of Settlement Department that the first and the only application submitted by the petitioner in this connection is dated 1‑8‑1977. This position has not been con troverted by the petitioner in his own statement who was frank in admitting that he had made no application to any officer during this period but had made an application in the year 1977 to the Assistant Commissioner, Kohat for the cancellation of the impugned mutations and had shown his willingness to deposit the mortgage amount in connection with the quit land. It was also frankly admitted by him in the course of his cross‑examination that he did not file any redemp tion suit right from the date of acquiring the equity of redemption till the year 1977."

5. Leave was granted to examine the questions, whether the appellant had a right to redeem the mortgage which he lost due to efflux of time (expiry of 60 years); whether in this context notwithstanding the acquisi tion without encumbrance by the Central Government and the notifications permitting redemption, section 28 and Article 148 of the Limitation Act and other laws relating to redemption would continue to have operation: and, whether section 19 of Limitation Act would govern the case vis‑a‑vis the Government's conduct in accepting the position of a mortgagee in the revenue records, as also in the said notifications, if the same is treated as acknowledgment of mortgage, which as contended amounted to an acknowledgment.

6. Now the admitted position that emerges from the record is that Khawas was the owner of the land and he had only transferred mortgage rights in favour of the Hindu mortgagee who subsequently became an evacuee. Learned counsel for the respondents was unable to say when the Hindu mortgagee had become an evacuee and whether or not his rights were at any time treated as evacuee property before the 1st of January, 1957. However, the first entry in point of time recorded in the revenue record was on 11th January, 1969, vide Mutation No. 1764 in which only the mortgagee rights of the non‑Muslim evacuee were transferred in favour of the Central Government. From this it follows very plainly that upto this date the concerned authorities were treating the ownership rights in the property to be non‑evacuee and only mortgagee rights to be evacuee property. This entry was obviously made by virtue of the acquisition of evacuee rights in land under section 4 of the Displaced Persons (Land Settlement) Act, 1958. This Court in Muhammad Khan v. Chief Settlement and Rehabilitation Commissioner (PLD 1962 SC 284), considered the effect of evacuee laws and section 4 of the Displaced Persons (Land Settlement) Act, 1958, on the rights of Muslim Pakistani citizen in respect of property subject to mortgage and held that a notification under the last mentioned section in no way, destroyed the rights of non‑evacuees in land in which evacuee had any right under mortgage. It cannot, therefore, be disputed that the successors‑in‑interest of Khawas continued to have a right to the equity of redemption in the disputed property, notwithstanding the acquisition of evacuee's interest therein by the Central Government. The position, therefore, is that the Central Government merely steppe a into the shoes of the evacuee and was vested only with the rights of mortgage and nothing more.

7. Indeed the Settlement and Rehabilitation Commissioner, West Pakistan, Lahore, recognized this position and issued instructions for the redemption of mortgages by locals with evacuees in his memo. No. 6883‑59/7042 R(P), dated 8th December, 1959, which reads as under :‑

"The land mortgaged by locals with evacuees has remained excluded from allotment under the Rehabilitation Settlement Scheme. The question of its final disposal has been considered and it has been decided that the amount (mortgage money) due to the evacuees in such cases should be recovered by the local rehabilitation authorities within their respective areas of jurisdiction. The needful will be done under section 25(2) (L) of the Pakistan (Administration of Evacuee Property) Act, 1957. Powers under this subsection have since been delegated to the Deputy Rehabilitation Commissioners and Assistant Rehabilitation Commissioners by the Custodian of Evacuee Property, vide Custodian's orders dated 28‑8‑1959/17‑11‑1959 (copies enclosed). The Assistant Rehabilitation Commissioners concerned should immediately issue a notice to the local mort gagors of this category to redeem the properties involved within one month, failing which the evacuees right in the properties shall be auctioned under section 25(2) (s) of the Pakistan (Administration of Evacuee Property) Act, 1957. Cases requiring disposal by means of auction should be reported to the undersigned after one month. The amounts which may be recovered in consequence of the redemption should be deposited in the compensation pool constituted under section 5 of the Displaced Persons (Land Settlement) Act, 1958."

It may be noticed that in case of failure on the part of the mortgagors to redeem the mortgage after the issue of notice as instructed in the aforesaid memo. only "the evacuees right in the properties shall be auctioned" Clearly, therefore, the Government was not claiming any right beyond the mortgage rights in respect of such mortgage properties in favour of the evacuee. As stated earlier the entry in the revenue record was made in favour of the Central Government as full owner of the land in dispute by means of Mutation No. 100 in pursuance of Memorandum No. 1980‑601 1489‑R(P), dated 22nd April, 1960, which may with advantage be reproduced as under :‑

"A question had arisen as to what will be the position in cases in which redemption of land mortgaged by non‑evacuees with evacuees is barred by Article 148 of the Limitation Act, 1908. Evidently the question of redeeming the land in such cases does not arise. Such land may thus be treated as purely evacuee property and utilised for the settlement of pending claims for agricultural laud of the displaced persons. It has, however, been decided that the period of sixty years should be counted up to the date on which a particular non‑evacuee mortgagor applies for redemption in terms of this office circular Memorandum No. 6883‑59/7042‑R(P), dated the 8th December, 1959, Deputy Commissioner, Gujrat and Muzaffargarh only. This also disposes of your Memorandum No. 11‑SO, dated the 8th January, 1960, and Memorandum No. dated the 11th February, 1960, respectively."

It is, therefore, clear that the basis for claiming full ownership rights in the land in favour of the Government was that the period of limitation for suit for redemption as provided in Article 148 of the Limitation Act had expired, with the result that the equity of redemption stood extinguished by virtue of section 28 of the Limitation Act.

8. The only question, therefore, that falls for determination is whether the view taken by the courts below was correct that suit of the appellant for redemption of the mortgage was out of time and properly dismissed as time‑barred. The mortgage was created on 31st March, 1916 and the sixty years limitation computed from this date would ordinarily expire, as observed by the learned Judge in the High Court, on 31st March, 1976.1 On the admitted facts the appellant seems to have moved the relevant authorities for redemption of mortgage in pursuance of instructions issued by the Chief Settlement and Rehabilitation Commissioner on 1st August, 1977, and as in terms of the aforesaid instructions the period of limitation of sixty years had already expired, his request was not entertained. It has, however, been urged with considerable force that the aforesaid memorandum of the Chief Settlement and Rehabilitation Commissioner, dated 8th December, 1959, wherein the Government acknowledged the right of redemption of the appellant and more particularly the entry in the revenue record showing the appellant as owner/mortgagor and the Central Government as mortgagee dated 11th January, 1969, constituted acknowledgments in writing before the expiration of the period of limitation, under section 19 of the Limitation Act, with the result that a fresh period of limitation accrued in favour of the appellant.

9. Now it seems well‑settled that when the period of limitation for a suit for redemption or possession is determined, the mortgagor's title to the land is completely extinguished by operation of section 28, Limitation Act, so that where mortgagee has been in possession he becomes an absolute owner of the immovable property under mortgage. But the precise question in this case is whether by acknowledgement of liability a fresh period of limitation is to be computed from the date of acknowledgment. Reliance in this behalf as already indicated has been placed on the memo. dated 8th December, 1959 (issued within the original period of limitation) by the Chief Settlement and Rehabilitation Commis sioner and the Mutation Entry No. 1764, dated 11^th January, 1969 (also falling within the original period of limitation). If either of these two documents constitutes acknowledgment in law, in either case the statute of limitation will be saved and the suit would be within the fresh period of limitation. As the memorandum is couched in general terms and makes no mention of the land in dispute or the rights of the owner, it is difficult to hold that this document by itself had effect as an acknowledg ment. However, the Mutation No. 1764, dated 11th January, 1969, ct4nds on a different footing. It seems to be the admitted position that this entry was made in accordance with another memo. reproduced above which was issued by the Chief Settlement and Rehabilitation Commissioner on 22nd April, 1960. This memorandum authorized relevant authorities to treat such properties under mortgage with the evacuee in which the mortgage has not been redeemed within the period of limitation as provided by Article 148 of the Limitation Act, as part of the compensation pool to be utilized for the settlement of pending claims for agricultural land of the displaced persons. The effect of the instructions contained in this memorandum was only to treat the equity of redemption to have been extinguished on the expiry of the period of limitation for a suit for redemption. Mutation Entry No. 1764 was, therefore, effected only in respect of mortgagee's rights in favour of the Government as the period of limitation for redemption of the mortgage had not yet expired. Therefore, it was subsequently on 9th September, 1977, that Mutation No. 100 was effected apparently on the ground that the period of limitation for redemption had by then expired and as such the Central Government was shown as the full owner of the property in dispute. Mutation Entry No. 1764, however, in acknowledging Samar Gul appellant as the mort gagor, constitutes acknowledgment of liability and the right to equity of redemption possessed by him which clearly constitutes acknowledgment for the purposes of section i9. The question of sufficiency of this evidence as an acknowledgment of liability has not been raised by the learned counsel for the respondents. Suffice it to say that acknowledgment in respect of right in property, in terms of section 19, Limitation Act can be made either by the party against whom such right is claimed or by some person through whom he derives title or liability. The acknowledgement can be made either personally or by agent duly authorized. Under section 4 of the Displaced Persons (Land Settlement) Act, 1958, evacuee lands acquired vested in the Central Government or the Provincial Government and by virtue of section 5 of the said Act formed part of the compensation pool for the purpose of granting compensation to displaced persons whose claims have been verified. These lands forming part of the compensation pool were to be administered by the Chief Settlement Commissioner and other officers in the Settlement Organization. Accordingly by statutory provisions, the Chief Settlement Commissioner acted as agent for the Government in the management of the properties in the compensation pool. It follows, therefore, that Mutation No. 1764 being effected in pursuance of his policy instructions in writing it would sufficiently constitute as an acknowledgment on behalf of the Central Government and would, therefore, bind the respondents. In this view of the platter, we have no difficulty in holding that a fresh period of limitation had commenced with effect from 11^th January, 1969. and therefore, the suit of the appellant having been instituted within sixty years from the aforesaid date was well within time. Learned counsel for the respondents was unable to advance any argument against the contention that the said mutation entry can be treated as an acknowledgment within the meaning of section 19 of the Limitation Act. He only submitted that the suit of the appellant as framed was not for redemption of mortgage as such but was a suit for declaration simpliciter.

10. The perusal of the plaint, however, shows that the appellant had prayed for a declaration that the mutations treating the property to have wholly vested in the Government were illegal and that he be declared to be the owner of the equity of redemption. He further prayed that the defendants Nos. 1 to 3 after receiving the mortgage money be directed to refrain from interfering in the ownership and possessory right of the plaintiff (appellant). The Trial Court also treated the suit filed by the appellant as a suit for redemption and dismissed the same on the ground that the sixty years period limitation fur such a suit had expired before the institution of the same. The first a appellate Court in its judgment observed that one of the prayers of the plaintiff was that "he is entitled to redemption of the suit land from defandants/respondents Nos. 1 to 3 on payment of Rs. 280". Similarly while stating the facts the High Court in its judgment observed that plaintiff claimed that he had become "owner/ mortgagor of the suit land by virtue of Mutation so. 1449 dated 21st November, 1957, his claim is not barred by limitation and that he is entitled under the law to redeem the property in question on payment of mortgage amount Rs. 280". The finding of the High Court, as expressed in the impugned judgment, is that the suit was barred in terms of Article 148 of the Limitation Act. It will thus appear that the plaintiff was seeking redemption of the mortgage and the parties to the suit were on notice about the real nature of the suit. Therefore, we have no hesitation to hold that no prejudice has been caused to the respondents on account of couching the relief in the declaratory form. It is well‑settle that a Court is empowered to grant such relief as the justice of the case may demand and for purposes of determining the relief asked for, the whole of the plaint must be looked into, so that the substance rather than the form should be examined. The argument advanced on behalf of the respondents is accordingly without substance that no prayer for redemption of the mortgage was made by the appellant in his suit.

11. For the foregoing reasons this appeal succeeds and the suit of the appellant is decreed with the result that he shall be declared to be the owner of the equity of redemption in the suit land. A preliminary decree for redemption of the mortgaged property under Order. XXXIV, rule 7, C. P. C., shall be prepared by the trial Court in Form No. 7‑B of Appendix D', C. P. C. and further proceedings taken as required by law. In the circumstances of the case there shall be no order as to costs.

M. B. A.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.