B.L. Yadav, J.
1. This is plaintiffs Second Appeal preferred under Section 100 of the Code of Civil Procedure, 1308 (for short the Code) in a suit for redemption of mortgage over an area of 11 Bighas, 15 kathas 6 dhurs in Khata No. 388 of village Baleshra Balahata. This khata belongs to Nurul Mian, Zan Mohammad Mian, Abdul Aziz, Ahmad Mian and All Hussain Mian. They executed a mortgage on 23-1-1922 in favour of Lala Sital Lal after obtaining Rs. 600/- the mortgage money in respect of an area of 4 Bighas and the possession was given to the mortgagee. There was another oral mortgage dated 1-4-1934 in favour of same mortgagee Lala Sital Lal for Rs. 500/- in respect of the remaining area of khata. Sital Lal died and Respondent Nos. 1 to 6 are his heirs. Plaintiffs are the heirs of Abdul Aziz, the mortgagor.
2. The amount of mortgage money was sent by mortgagor to the defendants, the mortgagees but they did not accept it rather they asserted the rights of vendees. They further asserted that they are not mortgagees rather a suit for arrears of rent was filed by Malik Hathuaraj and decree was obtained and land in dispute was put to auction sale and the defendants managed that the property to auction sale was purchased by Guru Gokul Dubey and later the defendants purchased the property in suit and came in possession as vendees hence they would not deliver back possession to the plaintiffs as defendants are no longer mortgagees.
3. The suit was contested by the defendants alleging that they are on the date of the suit not as mortgagees. Earlier mortgage was created in favour of Lala Sital Lal the predecessor -- in -- interest of the defendants. The suit for arrears of rent was filed by Malik Hathuaraj and it was decreed exparte. The property was put to auction sale as the arrears of rent could not be paid. Lala Sital Lal purchased the property in the name of Guru Gokul Dubey arid thereafter from him defendants came in possession as vendee. The defendants are no longer mortgagees. The suit was time barred and liable to be dismissed.
4. The trial court after considering the oral and documentary evidence decreed the
suit holding that the defendants were mortgagee and not owners and were liable to redeliver the property to the plaintiffs, the mortgagors. The suit alleged to have been filed by Malik Hathua Raj, for arrears of rent, was fraudulent and fabricated.
5. The defendants -- respondents, the
mortgagees preferred appeal before the lower
appellate court and the same has been allowed
and suit has been dismissed without reversing
the findings of the trial court and without
considering the material evidence particularly
the oral evidence considered by the trial court.
Against the decree of the 1st appellate court
the present second Appeal has been filed by
the plaintiffs, the alleged mortgagors.
6. Learned counsellor the plaintiffs --appellants urged that the oral evidence including the statements of P.W. 5 Laloo Khan aged about 70 years, P.W. 1 Abdul Karim and P.W. Musafir Ram, has not been considered and that the contradiction in the statement of D. Ws. was not noticed. Normally the appreciation of oral evidence by trial court need not be interfered with as the trial court has advantage to watch demeanour of witnesses. The burden of proof has been placed only the plaintiffs -- appellants, whereas both parties led evidence and parties were aware about the pleadings of the other side, in that event the question of burden of proof loses its importance. Lala Sital Lal the original mortgagee was liable to pay rent in view of the covenant recital in mortgage deed itself and he was to supervise the property as a common prudent man, that being so where was the necessity to file a suit for arrears of rent by Malik Hathuaraj. Even if it was so suit must have been filed against Lala Sital Lal. The trial court held that the proceedings in respect of arrears of rent and auction sale, and purchase of land in dispute by Lala Sital Lal were fraudulent and fabricated but the lower appellate court without adverting to this aspect just on presumption dismissed, the suit and allowed the appeal. It was also contended that the purchase by the mortgagee who was obliged to pay rent under the terms of the mortgage, but committed default and got a suit for arrears of rent filed by the Malik
Hathua Raj, and got the land in suit sold in auction sale, amounts to an advantage so derived for benefit of the mortgagor. The equity of redemption will also not be affected in view of Section 60 of the T. P. Act, 1882 and Section 90 of the Trusts Act, 1882. The suit cannot be said to be time barred. Reliance was placed on Mrutunjay Pani v. Narmada Bala Samal, AIR 1961 SC 1353 and Jaya Singh Dhyanu Mhoprekar v. Krishna Babaji Patil, AIR 1985 SC 1646.
7. Learned counsel for the respondents, on the other hands contended that the appeal was concluded by the findings of fact inasmuch as the lower appellate Court recorded a finding that the mortgage was redeemed much prior to the filing of the suit which was clearly time barred, and that oral statements of the witnesses have been considered and burden of proof always remains on the plaintiffs. Earlier suit for arrears of rent was correctly filed by Malik Hathuaraj and correctly decreed and land in suit was put to auction sale and later on correctly purchased by the heirs of Lala Sital Lal and the land mortgaged came in possession of the defendants as an auction purchaser. There was no covenant that Lala Sital Lal, mortgagee must pay the rent. The appeal was liable to be dismissed. He leaned heavily on Mahabir Singh v. Rameshwar Singh, 1978 BLJR 768 : (AIR 1979 Patna 46); Ranjit Choudhary alias Bagar Choudhary v. Satan Devi, 1970 BLJR 756.
8. Having carefully weighed the submissions of the learned counsel for the parties, the question for determination is as to whether the suit was time barred and was the suit dismissed just on presumption, whether burden of proof has correctly been placed on the plaintiffs -- appellants, and whether the question of burden of proof remains important even after both the parties have led evidence, and whether the oral evidence appreciated by the trial court which has the advantage of watching the demeanour of the witnesses, can be ignored by the lower appellate court without pointing out special features which have been lost sight of by the trial court, and whether the fraudulent nature of
transaction in getting the earlier suit filed by Malik Hathuaraj for recovery of rent has been taken into account particularly with reference to duty to pay rent as mentioned in mortgage deed and whether on account of default of the mortgagee to pay rent, the suit was filed for recovery of rent and the property was put to auction sale, the transaction or proceedings would not affect the right of redemption?
9. As regards the first point whether the suit was barred by limitation suffice it to say that the point was not taken by the defendants -- respondents in the written statement. The plea about the limitation is mixed question of fact and law. That need not be raised for the first time in the second appeal without there being a factual foundation including pleadings and evidence. It is evident by a perusal of the written statement as discussed by the learned First Additional Munsif, Gopalganj that no plea about suit being barred by limitation was taken by the defendants nor any issue was framed on the point of limitation. Recently in K. Chelliah Servai v. M. Muthusami Servai, 1995 Patna Law Reporter 66 (Supreme Court), their lordships of the Apex Court ruled that in the Second Appeal it was not open to the High Court to have gone into question which was neither pleaded nor raised or dealt with by the trial court or lower appellate court. In such situation The High Court exceeded its jurisdiction under Section 100 of the Code. But as point was urged emphatically hence for precaution's sake I am proposing to decide. The execution of mortgage deed was admitted even to the defendants -- respondents, and once a mortgagee always a mortgagee till redeemed. The first mortgage was executed on 23-1-1922 and second oral mortgage was dated 1-4-1934. The defendants alleged that it was redeemed prior to the filing of the suit.
10. Article 61(a) of the Limitation Act, 1963 (for short the Act) provides 30 years limitation for redemption. Section 30 of the Act postulates that in case some shorter period of limitation has been provided then provided under the (Old) Indian Limitation Act, 1908 in that event suit shall be deemed to have been filed within 7 years from the date of
enforcement of the Act. Article 148 of Old Limitation Act, 1908, prescribes 60 years period of limitation and corresponds to Article 61(a) of the Act. As a salutary principle the mortgagee or the person claiming under him is estopped from claiming any adverse rights against the mortgagors. In such matters Article 61(a) of the Act and Old Art. 148 would apply. The suit having been filed in 1967 much within 60 years under the extended period of limitation under Article 61(a) read with Section 30 of the Act, hence cannot be said to be barred by limitation.
11. As regards the point about the question of burden of proof suffice it to say that as both the parties have led evidence, further they were aware to the pleadings of the other side, in that event question of burden of proof loses its significance. The lower appellate court erred in holding that the burden of proof was on the plaintiffs.
12. Reverting to the next question whether the suit was dismissed by the lower appellate court just on the presumption. On page 20 of the certified copy it has been stated:
'On the basis of circumstantial evidence the presumption will be that Zarpeshgi deed of 1922 was redeemed sometimes in 1927 as stated by D.Ws. 3 and 4 and the land was put on auction sale in 1928 as alleged by the defendants and it was purchased by Gokul Dubey in the auction sale.'
In my opinion, in a judgment of reversal the suit cannot be dismissed just on p resumption.
13. As regards appreciations of oral evidence by the lower appellate court, suffice it to say that the trial court has considered the statements of P.W.4, Musafir Ram aged about 65 years, P.W. 5 Laloo Khan, P.W. 1 Abdul Karim but their statements have not been considered rather just the witnesses of the defendants have been enumerated and their testimony has been relied upon without reversing the findings of the trial court and without considering the statements of P.W. 4 Musafir Ram, P.W. 5 Laloo Khan and P.W. 1 Abdul Karim. When the question turns upon oral evidence to be appreciated by the appel-
late court in that event it must be slow in reversing the findings of the trial court as the trial court had the advantage of watching the demeanour of the witnesses, whereas the appellate court is deprived of that opportunity (See Madhusudan Das v. Smt. Naraini Bai, AIR 1983 SCI 14).
14. Reverting to the question whether transaction which culminated in putting the property on auction sale and subsequent purchase by the mortgagee would amount to fraudulent nature of transaction. A copy of the mortgage deed dated 23-1-1922 is on the record. About the liability of payment of rent there is following statements:
From the aforesaid recital it was evident that the liability of payment of rent was of the mortgagee and not mortgagor. In other words the liability of payment of rent was of the mortgagees, which was to be paid every year but the lower appellate court by ignoring material evidence i.e. mortgagee deed etc., has held that it was the responsibility of the mortgagor. The mortgagor was not obliged to pay rent particularly when in the mortgage deed itself there was specific mention to that effect that rent shall be paid by the mortgagee only. It is significant to mention that the trial court on page 12 of the judgment has noticed the recital in the mortgage deed dated 23-1-J922 as follows:
(Matter in Vernacular Omitted - Ed.)
But the lower appellate court failed to notice the recital in the mortgage deed about liability to pay rent. In that view of the matter, I am of the opinion, that the lower appellate court has decided the appeal by ignoring the material evidence including the important documentary evidence i.e. mortgage deed, etc., in such situation the findings of the lower appellate court would not be binding on the Second Appellate Court. In order to interfere in Second Appeal under Section 100 of the Code, there must be substantial question of law. In my opinion, non consideration of material evidence including recital the mortgage deed about the obligation to pay rent and non consideration of statements of
P.W. 1 Abdul Karim, P.W. 4 Musafir Ram and P.W. 5 Laloo Khan would constitute substantial questions of law. (See Dilbagrai Punjabi v. Sharad Chandra, AIR 1988 SC 1858, Jagdish Singh v. Nathoo Singh (Para 8) AIR 1992 SC 1604).
15. Recently in Mohd. Yunus v. Guru Bux Singh, 1995 Patna Law Reporter 73 (SC), their Lordships of the Supreme Court while considering the contours of Section 100 of the Code, have held as follows :
'Where there is a gross misappreciation of evidence, which goes to the root of the matter certainly the Second Appellate Court can exercise its jurisdiction.'
In the instant appeal the learned Subordinate Judge, Gopalganj has committed gross mis-appreciation of evidence which goes to the root of the matter.
16. As regards the duty of payment of rent recital in the mortgage deed, as indicated above, clearly shows that it was the responsibility of the mortgagee to pay rent every year, in that event findings of the lower appellate court to the contrary was in complete disregard of the documentary and oral evidence on record. As the rent was payable by the mortgagee hence there was no question of filing a suit by Malik Hathua Raj against mortgagor or his successor and getting a decree for arrears of rent and putting the suit land to auction sale or purchase of settlement in favour of mortgagee, the respondents. In that view of the matter all those proceedings in rent suit were fraudulent, fabricated and manoeuvred and liable to be ignored or set aside. This resulted in purchase of property which, in my opinion amounts to purchase of equity of redemption but right of redemption cannot be affected. The purchase of equity of redemption is only in trust for the mortgagor (see Mrutunjaya Pani v. Narmada Bala Samal, AIR 1961 SC 1353 & AIR 1985 SC 1646.) It is convenient to refer to the cases relied upon by the learned counsel for the respondents. Ramjit Chaudhary v. Satan Devi, 1970 B.L.J.R. 756 was a case based on its own facts where there was no allegation of fraudulent proceedings, whereas in the
present case even though the obligation was of the mortgagee to pay rent but he managed to get a suit filed by Malik Hathua Raj for arrears of rent against the mortgagor, without any knowledge of mortgagor and without serving any notice on him got a decree, which was put in execution and land was purchased by mortgagee the defendants. The dictum of Ramjit Chaudhary's case (supra) would not apply. Mahabir Singh v. Rameshwar Singh, 1978 B.L.J.R. 768 : (AIR 1979 Patna 46) (supra) was a case where holding was not transferable hence that case is of no assistance to the respondents.
17. The matter can be angulated from another perspective. The provisions of Sections 60 and 71 of the Transfer of Property Act clearly provide that once a mortgage always a mortgage and once the mortgagee has been admitted the responsibility of mortgagees is to convey the property mortgaged after accepting the mortgage money and the equity of redemption cannot be lost.
18. In the matter pertaining to principles of equity particularly equity of redemption its origin with special reference to creation of mortgage and equity of redemption, it is interesting to notice relevant provisions of Indian jurisprudence. The study of the English and American Jurisprudence would indicate that English jurists invented principles of equity in the medieval period; particularly in the period of Edward I. Robert Burnell is one of the great names in legal history and he was Chancellor of Edward I. To be precise principles of equity were invented in the beginning of thirteenth century, whereas Indian Jurisprudence written in Sanskrit containing principles of Equity dates back at least Five Thousand years B.C. The origin and purpose of equity may be traced from H.G. Hanbury's Modern Equity, (English Edition):--
'However, expansion through the Chancellor was once more facilitated by the liberty given to the Clerks of the Chancery, by the Statute of Westmnister II in 1285, to issue writs in consimili casu'.
19. The following statement appears to be
useful:--The idea of conscience:
The medieval Chancellor was peculiarly well fitted to relieve hard cases: he was always an ecclesiastic, generally a bishop, and learned in the civil and canon law. In granting relief in hard cases to the poor and oppressed, the Chancellor did not conceive himself to be interfering in any way with the common law. The aim of the common law was smooth and automatic working, and it was very desirable that this should be so. But there was nothing automatic about the action of the medieval Chancellors. They would give or withhold relief, not according to any precedent, but according to the effect produced on their own individual sense of right and wrong by the merits of the particular case before them, as viewed in the light of their innate ideas, prompted by morality, honesty conscience, or knowledge of good and evil.
20. From these abstract virtues springs equity; conscience and equity in the medieval period present the appearance of Siamese twins who are well content not to be separated. And, indeed, the moment for separation had not yet come. English equity is a peculiar and unique growth, but the idea of equity in general is by no means unique. Every legal system must at times find the peculiarly hard case that cries alound for relief, the case which no judge could decide according to rule without putting an intolerable strain on his own conscience. It is in order to prevent the collapse of all certainty in the law by reason of the conflicting influences of precedent and conscience in the judicial mind that equity must be introduced.
21. Similarly Maitland in his admirable treatise 'Equity' states as follows :--
'............ in the thirteenth and fourteenth
centuries the Chancellor very probably did not regard himself as administering a new body of law in many cases we see him working in close co-operation with the common law judges. His attitude may be summed up somewhat in this manner; While thoroughly recognising the authority of the common law courts, he interfered in order to protect
litigants in two varieties of hard cases :
(a) those which were unjustifiable by the common law courts owing to the rigid and circumscribed nature of the writs, even those in consimili casu, which issued out of the Chancery as the first step in common law action;
(b) those which, even though ajudgment at common law had been delivered upon them, nevertheless remained hard owing to the melancholy fact that the machinery of the common law courts was inadequate to enable them to enforce that judgment by the effective method of personal constraint.
22. Similarly 'the origins and history of equity' can be traced out in Snell's Equity, Twenty-ninth Edition of P. V. Baker, London Sweet & Maxwell, 1990 :--
The origins of equity:
(a) Common law. The period from the Norman conquest to the reign of Henry III in the thirteeth century witnessed the inception and rapid growth of the common law. This was administered by the King's justices on circuit and in the three common law courts of King's Bench, Common Pleas and Exchequer.
The need of separate court of equity is not yet felt, for the King's court, which is not yet hampered by many statutes of by accurately formulated' case 'law', can administer equity. Thereafter the common law courts were fettered both by precedent and by the provisions of Exford, 1258, which restrained the Chancellor from issuing new types of writ of his own initiative.
(b) Emergence of equity. Although the common law still continued to develop, perhaps under the some what limited authority of chapter 24 of the Statute of Westminster II 1285 (In consimili casu) these setters prevented it from developing in fast enough to do justice in all cases. Moreover, in the rough days of the thirteenth century, a plaintiff was often unable to obtain a remedy in the common law courts, even when they should have had one for him, owing to the strength of
the defendant, who would defy the court or intimidate the jury. Either deficiency of remedy or failure to administer it was a ground for petition to the King in Council to exercise his extraordinary judicial powers. A custom developed or referring certain classes of these petitions to the Chancellor, and this custom was confirmed by an order of Edward III in 1349. The Chancellor acted at first in the name of the King in Council, but in 1474 a decree was made on his own authority, and this practice continued, so that there came to be a Court of Chancery as an institution independent of the King and his Council.
(c) Conscience. In the Middle Ages the Chancellor's jurisdiction was undefined. His powers were wide but vague, and coextensive only with the necessity that evoked them. He exercised his powers on the ground of conscience. This appears to have been an importation from the canon law : almost all the medieval Chancellors were ecclesiastics. 'Conscience' was in theory based on universal and natural justice rather than the private opinion or conscience of the Chancellor. The principle seems to have been secularised during the sixteenth century, perhaps by Sir Christopher Hatton (Chancellor 1587 - 91); 'conscience' became the Conscience of the Queen and the Chancellor was designated the Keeper of the Queen's Conscience'. Yet this theoretical basis of the principle did not prevent the cynical gibe voiced by Selden (perhaps more in jest then in earnest) about the standards varying with each Chancellor, even as his foot.
23. The aforesaid discussions from standard works of eminent Authors on 'Equity' indicates that principles of Equity were invented in the beginning of Thirteenth Century. In Indian Jurisprudence the principles of nature and variety of mortgages and duties of mortgagees and equity of redemption are traceable from Standard Works of Yajnavalkya Smriti, Dharmakosh, Katyayan Smriti and Manusmriti etc. These admirable books were written at least Three to Five Thousand years B. C.. The concept of mortgage (Andhi) can be gathered from following shlok of Yajnavalkaya Smriti -- Mitakshra
Commentary. Andhi means in Sanskrit security furnished by a debtor or to the creditor. Better to quote :--
(Matter in Vernacular Omitted -- Ed.)
It connotes that mortgage or Andhi means the hypothecation of a property or thing by the debtor with the creditor as a security and for the sake of creating confidence with the creditor for the amount borrowed. The mortgage is of two kinds (i) of a moveable property (Jangama); (ii) of an immoveable property (Sthavara). The mortgage comes into existence by placing property in possession of creditor.
24. Again there is following provision in Nared Smriti p. 27 (Dharmkosh p. 648):
(Matter in Vernacular Omitted -- Ed.)
This connotes mortgage according to its
period is of two types -- (i) Kritakala i.e. drdky a mortgage or pledge, created or given for a specific period. It must be redeemed within that period and (ii) Akrita-kala means vdyk a mortgage without any time limit. The property can be retained by the mortgagee till the amount is paid. It means payment of money by debtor and redemption or leaving the possession of property by mortgagee and handing it over to the mortgagor on receiving the mortgage money. As regards the use by mortgagee, there are two types of mortgage (i) Gopya --that which is kept as security for ensuring payment of loan but not to be kept in possession of mortgagee and (ii) Phala Bhogya or usufructuary mortgage. The property mortgaged is to be remain in possession of mortgagee and to be used by him in the manner possible.
25. The usufructuary mortgage has been defined in Katyayan Smriti as follows:--
(Matter in Vernacular Omitted -- Ed.)
It connotes that in the usufructuary mortgage the creditor is called Bhogyavadhi, whether property mortgaged is moveable or immoveable, which is capable of being used enjoyed by the mortgagee for the purpose of meeting the interest. The debtor could repay the debt and get back the property. In other words the
equity of redemption was a must. Again the usufructuary mortgage has another two varieties according to use I Sepratyaya Bhogyavadhi which means that enjoyment of property is not only in lieu of interest but also in lieu of a portion of a principal amount as agreed upon between the parties. It Apra-tyaya Bhogyavadhi is a variety of usufructuary mortgage where property mortgaged is used by mortgagee only in lieu of interest and on payment of mortge money he was to hand over the property-mortgaged to the mortgagor. In this way the document of equity of redemption was a must and there was no clog on the equity of redemption.
26. In view of the aforesaid classical tests it is evident that there were much vivid, detailed and intelligent system of equity prevalent in Indian society thousands years prior to Thirteenth Century when these principles of equity were invented or borrowed from Indian Jurisprudence. In this way this can be an interesting subject for research to ascertain whether our country has not more intelligent jurisprudence, and thousands years earlier, then those principles appear to have been transplanted into the British and American Jurisprudence. A discussion about origin of principles of equity in English Law with reference to eminent authors like Snell, Maitland and H. G. Hanbury, it is proved rather admitted that principles of equity were invented in Great Britain in Thirteenth Century.
27. The lower appellate court did not consider the nature of the transaction-mortgage and its incidents. In other words mortgage is essentially a conveyance of an interest in a property as a security for payment of debt. The security must be redeemable on payment of debt or mortgage-money; Section 60 of T. P. Act confers a statutory right of redemption. Tt is an inviolable right of mortgagor, on redemption to get back the subject of mortgage. Any clog on the equity of redemption was inequitable, bad in law and void. The courts must ignore any transaction or proceeding, as the proceeding for recovery of rent from mortgagor when it was the obligation of mortgagee to payment and
order or decree obtained ex parte without any notice and consequential auction sale etc. But the court below lost sight of the nature of transactions and basic principles of once a mortgage always a mortgage and there must not be any clog on the equity of redemption (see Pomal Kanji Govind Ji v. Vrajlal Karsandas Purohit, AIR 1989 SC 436 (438) : (1989) 1 SCC 458. The defendant has admitted the execution of the mortgage deed and mortgage deed contained a recital that payment of rent was duty of mortgagee himself, in that event in view of 1st proviso to Section 60 of the T. P. Act being mandatory and the right of equity of redemption cannot be lost. It was the statutory obligation of the defendant mortgagee to supervise the property as common prudent man, particularly in view of the recitals in the mortgage deed.
28. In view of the aforesaid premises the
judgment and decree of the lower appellate
court cannot be sustained.
29. Resultantly the present appeal succeeds and the same is allowed. The decree of the lower appellate court is set aside and appeal is remanded back to the lower appellate court to decide afresh in accordance with law and in the light of the observations made above. The cost, however, shall abide the result.
.