SHIVAGONDA RAVAJI SANKPAL Vs. CHANDRAKANT DNYANU SUTAR

JUDGEMENT

(1.) THIS reference of the Special Civil Application under Clause 36 of the Letters Patent is occasioned because of the difference of opinion between Deshmukh and Mridul JJ. on the two points indicated therein. The respondent herein is one of the heirs of the mortgagor owning 2 Annas and 8 Pies share in the two agricultural lands mortgaged by his ancestor with possession under a registered deed dated July 30, 1897 for a loan of Rs. 5,000 in favour of the ancestor of the petitioner herein. The mortgage deed did not fix any period for repayment and consequently the right of redemption stood expired in the year 1957 in ordinary course under Article 148 of the Limitation Act of 1908, now repealed by the Act of 1963, because of non -payment of the debt thereunder resulting in the extinction of the mortgagor's title in the lands under Section 28 of the repealed Act.

(2.) AFTER the enforcement of the Maharashtra Debt Relief Act of 1975 (hereinafter referred to as 'the Act') with effect from August 22, 1975, the respondent made an application to the Tahsildar, Kagal, on June 16, 1976 for restoration of the lands to him claiming the mortgage debt to have been discharged by virtue of Section 4 of the Act. This application was preceded by a notice dated June 8, 1976. The petitioner resisted this claim on the ground, amongst others, that the mortgagor's title and interest in the lands having been extinguished by 1957 on the expiry of the prescribed period of limitation for redemption, or possession, and the Act having not revived the same, the respondent's claim for restoration thereof was untenable. Neither the debt, so pleaded the petitioner, was outstanding, due or payable to warrant its discharge under Section 4(a) of the Act nor consequence contemplated under Section 4(e) could be said to have been attracted.

(3.) MR . Justice Deshmukh took the view (1) that time -barred claims were not intended to be deemed 'outstanding', 'due' or 'payable' under Section 4 of the Act, and (2) the title of the mortgagor in the lands mortgaged having been statutorily extinguished, the restoration thereof is not warranted under Section 4(e) of the Act. Mr. justice Mridul, on the other hand, emphasised the distinction between the discharge of debts 'payable' in opening main part of Section 4 and mere injunctive mandates against their 'recovery' provided in Clauses (a) to (d) thereof and pinpointed how the statute of limitation only bars the remedy without extinguishing debt itself which remains payable till it is actually paid or otherwise satisfied or statutorily scaled or discharged. According to him, in cases of pledges and mortgages, liability of the debtor to pay is integrally interlinked with creditor's liability to restore the property pledged or mortgaged, on the discharge of debt, actual or statutory and such coextensive liabilities survive even when remedies therefor are barred under the Limitation Act. Mr. Justice Mridul further held that extinction of the title of the debtor in the property conceived under Section 28 of the repealed Act or Section 27 of the present Limitation Act has not the effect of vesting or conferring it on the creditor. Consistent with these views he held that time barred claims for restoration of pledged or mortgaged property are not excluded from the widely worded Clause (e) of Section 4 of the Act which directs the release and restoration of such property by the creditor to the debtor, divorcing deliberately from their conventional moorings and concepts of redemption and restoration attached to the same under Section 60 or other cognate sections of the Transfer of Property Act and limitations governing such restrictions. Consistent with their views, while Deshmukh J. was inclined to reject the respondent's claim, Mridul J. was inclined to uphold the same. Hence reference of the following two questions to third Judge for decision: (1) Whether the provisions of Section 2(e) read with Sections 4(a) and (e) of the Maharashtra Debt Relief Act apply to the case of a possessory mortgage, where the debtor has taken no steps to redeem the mortgage within the period of limitation laid down by the Limitation Act. (2) Even if it did apply, is the debtor entitled to the return of the immovable property mortgaged, under Section 4(a) read with Section 4(e) of the said Act in view of the provisions of Section 28 read with Article 148 of the Indian Limitation Act, 1908 (now Section 27 read with Section 61 of 1963 Act) Sic The words 'Section 61' should read Article 145.