Holding

An application for recovery of possession under the Bombay Agricultural Debtors Relief Act, 1947 is not barred by the Limitation Act, the mortgagee’s title is not perfected by adverse possession, and the civil court is empowered to award mesne profits.

Summary

The mortgagor, an agriculturist, hypothecated two parcels of land to a mortgagee under the Bombay Agricultural Debtors Relief Act, 1947. After default, the mortgagee obtained an execution and, although a compromise discharged the debt, it retained possession of the lands. The mortgagor’s representatives filed an execution for recovery of possession, and the Civil Court ordered delivery of possession and mesne profits, a decision affirmed by the Gujarat High Court. On appeal, the mortgagee’s representatives contended that the award was barred by limitation, that title had been perfected by adverse possession, and that a purported auction had transferred ownership to them. The Supreme Court held that the application for recovery of possession under the Act is not subject to the Limitation Act’s section 27, that the mortgagee’s continued possession does not amount to adverse possession, and that the civil court has jurisdiction to award mesne profits. Consequently, the appeal was dismissed.

Issues considered

The applicability of Section 27 of the Limitation Act, 1963 to an application for recovery of possession under the Bombay Agricultural Debtors Relief Act, 1947.
Whether the mortgagee’s continued possession after discharge of the debt perfected title by adverse possession.
Whether a sale/auction conducted by the Collector transferred ownership to the mortgagee, thereby extinguishing the duty to surrender possession.
Whether the civil court has jurisdiction to award mesne profits in execution of an award under the Act.
Whether the award for possession is barred by limitation.

Legislation cited

Bombay Agricultural Debtors Relief Act, 1947s. 31, s. 32(2)(v), s. 34, s. 38, s. 43, s. 46, s. 51A
Code of Civil Procedure, 1908s. 9
Limitation Act, 1963s. 2(1), s. 27, s. 29(2), s. 3
Revenue Recovery Act

Subjects

LimitationAdverse possessionMortgageAgricultural debt reliefMesne profitsExecution of awardSpecial leaveCivil procedure

Judgment

A PATEL NARANBHAI MARGHABHAI AND ORS.
v.
DECEASED DHULABHAI GALBABHAI AND ORS.

MAY 15, 1992

B [N.M. KASLIWAL AND K. RAMASWAMY, JJ.)

Bombay Agricultural Debtors Relief Act, 1947-Sections 32(2)(v),
38(3), 51-A read with sections 27, 3, Schedule Limitation Act-Suit for
recovery of possession of property-Limitation-Determination-Non-
C prescription of period of /imitation-Legislative intention of-whether Section
27 applicable.

Constitution of India 1950-Arlic/e 136-Appeal under-Appreciation
of evidence-Plea of auction-Purchase of hypothica, adverse posses-
sion-Proof of-Award of mesne profit by executing Court-Legality of.
D
The predecessor of the respondents mortgaged the suit-lands to the
predecessor of the appellants, under the provisions of the Bombay Agricul-
tural Debtors Relief Act, 1947.

The mortgagor/debtor committed default in the payment. The
E mortgagee initiated an execution to realise the debt due amount of Rs.
3000/-, whereunder a compromise was effected. Pursuant to compromise,
though the debt was discharged, the mortgagee continued in possession.

'Ille respondents, the legal representatives of the mortgagor laid
execution for recovery of the possession of the hypothica.
F
'.fhe appellants, the legal representatives of the mortgagee raised
objections that the award was barred by limitation; that the mortgagee """(.
perfected title by adverse possession; that the lands were sold by the
Collector for the recovery of octroi duty in which the mortgagee purchased
G the property; ancJ that the character of the mortgagee stood transferred
into an ownership and thereby the appellants were not liable to surrender
possessions.

The Civil Court allowing the application of the respondents, directed
the appellants to deliver the possession and to pay mesne profit at the rate
H of Rs. 5000 per year from three years preceding the date of application till
384
,.
{

PATEL MARGHABHAI v. GALBABflA.I 385

the date of delivery of possession. A
When the appellants moved the High Court against the order of the,
lower Court, the High Court declined to interfere with the finding of the'
Civil Court.

The appellants challenged the High Court's judgment in the present B
appeal by special leave, contending that the evidence disclosed that the :
mortgagee purchased the hypothica at an auction conducted by the Col· ·
- y lector and thereby he became the owner and the appellants were not liable
to deliver possession of the lands to the respondents; that the appellants
perfected their title by adverse possession; that for possession, the execu·
c
- tion should be laid within 12 years and as the respondents laid execution i
after 22 years, the execution was barred by limitation; and that the execut· ·
ing court had no power to award mesne profits.

~ Dismissing the appeal, this Court,
' D
HELD: 1.01. When a person is obliged to institute a suit for posses· 1

sion of any property then by operation of section 27 of the Limitation Act
at the determination of the period thereby limited his right to such
property shall be extinguished. Section 3 of the Limitation Act bars institu·
tion of his suit after the prescribed period and the suit shall be dismissed
~ though limitation has not been set up as a defence. [390H] E
1.02. The right to any property would be extinguished only wh'!n
limitation in that behalf has been prescribed and the owner or person
entitled to possession failed to lay the suit by presentation of a plaint to .
the proper officer within the prescribed period by the schedule to the
1

Limitation Act.[391C] F
y
1.03. The suit for possession under section 27 of the Limitation Act
is a suit in respect of which the period of limitation has been prescribed
i.e. computed as per the provisions of the Limitation Act. It is clear from
the words 'period hereby limited' in section 27 that it would be applicable
G
to a suit and that the limitation prescribed is the one in the schedule to
the Limitation Act. Section 27, therefore, does apply to the suit for posses·
-I sion laid in the specified Civil Court under the Act.[3910]

1.04. The words in section 27 that at the determination of the 'period
hereby limited' to any person for instituting a suit for possession would H
386 SUPREME COURT REPORTS [1992) 3 S.C.R.

A imply that the limitation has begun to run against a person for instituting
a suit under s.9 of C.P.C. and had expired. The Legislature advisedly did
not prescribe any penod of limitation for recovery or the possession under
the Act which ls a beneficial legislation. Section 51A expressly bars the
jurisdiction of the Civil Court. It would follow that where a person could
not or need net have suit for possession, there is no question of any
B determination of the period of limitation to his instituting a preceding or
a suit for possession. Consequently, no question of the applicability of
section 27 would arise. Thereby the legislature manifested, by necessary
implication, that the period of limitation is not applicable to an applica-
tion for recovery of possession under the Act. The application for posses-
C sion is not barred by limitation. (3928-D]
2.01. The best evidence, namely the notification to conduct sale for
arrears; the sale proceedings and the certificate of sale have not been
·-
placed on record. When the sale alleged to have been made for recovery of
the dues, it would be governed by the Revenue. Recovery Act and the "-·
J

D procedure prescribed therein should be followed and the sale certificate
"' ould have been issued. This material evidence which clearly establishes
that the said sale was withheld by the appellants and an adverse inference
should be drawn against the appellants. The resultant position would be .
that the appellants remained in possession as the mortgagees. Once a
E mortgagee always a mortgagee. Admittedly there is a charge on the proper-
ty created in the award. Therefore, till the debt is discharged the property
remains to be subject to the charge and the mortgagee is entitled to retain
possession. [389F-390A]

2.02. There is no evidence as to when the appellants asserted adverse
F title to the property to the knowledge of the respondents and that they
acquiesced to it. There is no period of limitation prescribed under the Act
for execution. (3908)

2:03. A suit for possession by the owner of any property will not be
G barred if the possession of the defendant is not adverse to him. So hostile
title to the knowledge of the plaintiff must be asserted and proved. [392D]

2.04. The appellants as successors in interest of the mortgagee
continued in possession after the discharge of the debt by the mortgagor,
They enjoyed the property and the Civil Court found as a fact that the
H income derived would be Rs. 5,000 per year. There is no material contra
{

PATEL MARGHABHAI v. GALBABHAI (RAMASWAMY, J.] 387

placed on record. The charge created by the award stands terminated from A
the date of payment of the award amounL Thereafter the respondents
became entided to Claim mesne profits from the appellants from the next
day of the discharge of the debL (3938)

2.05. The Civil Court awarded from a period of three years preceding
the date of the application till date of possession. No appeal or proceedings B
under Art. 226 or 227 was taken by the respondent. Payment of mesne
profit is consequential to the execution of the award for unlawful retention
of the possession. Thus the court has power and jurisdiction to award
mesne profits as a concomitant of order for delivery of the possession.
[393CJ c
Ramanbhai Trikamla/ v. Vaghri Vaghabhai Oghabhai & Anr., (1979)
20 GLR 268, overruled.

Madhav Laxman Vaikunthe v. State of Mysore, (1962] 1 SCR 886,
referred to.
D
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2413 of
1992.

From the Judgment and Order dated 20.11.1990 of the Gujarat High
'r- Court in Special Civil Application No. 6852 of 1990. E
R.P. Bhatt and HJ. Jhaveri for the Appellants.

B. Dutta (NP), P.H. Parekh and B.N. Agarwal for the Respondents.

The Judgment of the Court was delivered by

K. RAMAsWAMY, J. Special leave granted.

This appeal by special leave arises against the order of the Gujarat
High Court dated November 20, 1990 made in Special Civil Application
No. 6852 of 1990. The appellants are the legal representatives of Naranbhai G
Marghabhai - the mortgagee. The respondents are the legal repre-
sentatives of Dhulabhai Galbabhai - the mortgagor, agriculturist. The
-(I. lands bearing survey No. 572/2 admeasuring IA.31 Gs. and survey'No. 354 -
admeasuring IA.23 Gs. situated in Bhadra village in Kheda district were
hypothecated by the mortgagor to the mortgagee. The mortgage is
governed by the· Bombay Agricultural Debtors Relief Act 1947 for short H
388 SUPREME COURT REPORTS {1992] 3 S.C.R.

A "the Act". Under Section 31 of the Act the debt payable by an agriculturist
shall be scaled down in the manner laid in the Act. The debt in excess
thereof stands extinguished under section 34. The amount of debt deter-
mined after scaling down is an award under section 34 and shall be
registered as prescribed under section 38 if a charge of the debt has been
created on the properties of the debtors. Under clause (iii) of sub-section
B (3) of section 38 the award shall be executed as if the court passed an
order. Under section 32(2)(v) the court may "pass an order for the delivery
of possession of any property, notwithstanding any law or contract to the
contrary". "Award" has been defined under section 2(1) to mean an Award
made under sub-section (4) of Section 8 or sections 9, 32 or 33 or as
C confirmed or modified by the court in appeal. "Court" has been defined to
mean the Court of the Civil Judge (Sr. Division) having ordinary jurisdic-
tion in the area where the debtor ordinarily resides and if there is no such
Civil Judge .the Court of the Civil Judge (Jr. Division) having such jurisdic-
tion and includes any Court to. which an application may be referred for
D disposal under section 13 A. Thus it is clear that notwithstanding any law
or contract to the contrary the award for delivery of the possession of any
property charged or hypothecated shall be executed as if it is the order of
the Civil Court.

Section 46 provides "save as otherwise expressly provided in this Act,
E the provisions of the Code of Civil Procedure, 1908 (V of 1908) shall apply
to all proceedings under this Chapter." Sections 32 and 38 are part of this
chapter of the Act. Section 51A envisages that except as otherwise
provided by the Act, and notwithstanding anything contained in any other
law, no Civil Court shall entertain or proceed with any suit or proceeding ·
-
F in respect of (i) any matter pending before the Court under the Act, or (ii)
the validity of any procedure or the legality of any award, order or decision
of the Board established under section 4 of the repealed Act or of the
court, or (iii) the recovery of any debt made payable under such award.
The Act, therefore, is a complete Code in itself as regards the determina-
tion of the debt; the liability fastened thereunder and the recovery of the
G debt due or the possession of the agricultural lands pursuant to the award.
Only the mode of execution has been relegated to the procedure provided
in the Civil Procedure Code. The Civil Court found that the award was
registered at the behest of the mortgagee and the debt was payable in six
annual instalments carrying interest at 6%. The debt due was Rs. 3,000
H when the mortgagor/debtor committed default in the payment and execu-
{

,_
PATEL MARGHABHAI v. GALBABHAI [RAMASWAMY, J.] 389

tion was laid whereunder a compromise was -'fected pursuant to which
the debt was completely discharged. Yet the mortgagee continued in
possession till date. The respondents laid execution for recovery of the
possession of the hypothica. Several objections were raised but we are
concerned in respect of three, namely that the award is barred by limita-
tion, (ii) the mortgagee perfected title by adverse possession, and (iii) the
lands were sold by the Collector for the recovery of octroi duty in which
B
the mortgagee purchased the property. The character of the mortgagee
stands transferred into an ownership and thereby they are not liable to
surrender possession. These contentions were negatived by the Civil Court.
The Civil Court while directing delivery of the possession, ordered to pay

- mesne profit at the rate of Rs. 5,000 per year from three years preceding
the date of application till date of delivery of possession. The High Court
declined to interfere on the finding that "it is eminently just and proper
C

order".

Shri Bhatt, the learned senior counsel for the appellant raised three D
contentions before us. It is firstly contended that the evidence do disclose
that the mortgagee purchased the hypotheca at an auction conducted by
the Collector and thereby he became the owner and the appellants are '
not liable to deliver possession of the lands to the respondents. We find no
force in the contention. It is to note that from Exh. 40 and 41 challans, it
would appear that a sum of Rs. 1,968 and Rs. -657 f'espectively was E
deposited. But as pointed out by the Civil Court it is not clear that the said
payments were made towards the sale price or pursuant to the alleged
auction of suit property. The best evidence namely the notification to
conduct sale for arrears; the sale proceedings and the certificate of sale
have not been placed on record. A letter of 1964 purported to have been F
written long after the alleged sale made in 1955 that there was no need for
issue of sale certificate as the appellants remained in possession. It is
difficult to accept this letter. When the sale alleged to have been made for
recovery of the dues, it would be governed by the Revenue Recovery Act
and the procedure prescribed therein should be followed and the sale
certificate would have been issued. As stated earlier this material evidence G
which clearly establishes that the said sale was withheld by the appellants
and an adverse inference should be drawn against the appellants. The Civil
Court, therefore, was justified in rejecting the contentions of the appellants.
The resultant position would be that the appellants remained in possession
as the mortgagees. Once a mortgagee always a mortgagee. Admittedly H
, I
390 SUPREME COURT REPORTS [1992j 3 S.C.R.

A there is a charge on the property created in the award. Therefore, till the
debt is discharged the property remains to be subject to the charge and
the mortgagee is entitled to retain possession. The contention that the
appellants are owners is not tenable and rightly was rejected by the Civil
Court.

B The further contention that the appellants perfected their title by
adverse possession lacks force. There is no evidence as to when the
appellants asserted adverse title to the property to the knowledge of the
respondents and that they acqiesced to it. There is no period of limitation
prescribed under the Act for execution. The contention placing reliance on
C a full bench judgment of Gujarat High Court in Ramanbhai Trikamlal v.
Vaghri Vaghabhai Oghabhai & Anr., (1979) 20 GLR 268 that for possession,
the execution shall be laid within 12 years and the respondents laid their
applications after 22 years; no relief for possession was asked and that the
execution after 22 years is barred by limitation. We find no force in the
contention.
D
Section 29(2) of the Limitation Act 1963 provides thus:

''Where any special or local law prescribes for any suit, appeal
or applic~tion a period of limitation different from the period
prescribed by the Schedule, the provisions of section 3 shall
E apply as if such period were the period prescribed by the
Schedule and for the purpose of determining any period of
limitation prescribed for any suit, appeal or application by any
special or local law, the provisions contained in sections 4 .to
24 (inclusive) shall apply only in so far as, and to the extent to
F which, they are not expressly excluded by such special or local
law".

Therefore, the special or local law should prescribe its own period
of limitation different from the one prescribed by the schedule of the
G Limitation Act. To a prescription of such limitation, section 3 would apply
by fiction as if it was prescribed in the schedule. In that event period of
limitation prescribed in the local or special law to the suit, appeal or
application, sections 4 to 24 inclusive would apply. When a person is
obliged to institute a suit for possession of any property then by operation
of section 27 at the determination of the period thereby limited his right
H to such property shall be extinguished. Section 3 of the Limitation Act bars
{

PATEL MARGHABHAI v. GALBABHAI [RAMASWAMY, J.] 391

institution of his suit after the prescribed period and the suit sliall be ' A
dismissed though limitation has not been set up as a defence. The word
'suit for possession' referred to in section 27 is a suit in respect of which
the period of limitation is prescribed by the schedule to the Limitation Act.

Under Section 2(1) of the Limitation Act suit. does not include
application. Section 3(2)(i) amplifies that for the purpose of LimitatioQ Act B
a suit is instituted in an ordinary course when the plaint is presented to
proper officer. Section 27 extinguishes the right to property at the deter-
mination of the period 'hereby limited' for instituting a suit for possession
of any property. Under section 2G) period of limitation means the period
of limitation prescribed for any suit by this schedule. In 'lther words the C

- right to any property would be extinguished only when limitation in that
behalf has been prescribed and· the owner or person entitled to possession
failed to lay the suit by presentation of a plaint to the proper officer within
the prescribed period by the schedule to the Limitation Act. The suit for
possession under section 27 of the Limitation Act is a suit in respect of D
which the period of limitation has been prescribed i.e. computed as per
the provisions of the Limitation Act. It is clear from the words 'period
hereby limited' in section 27 that it would be applicable to a suit and that 1

.the limitation prescribed is one in the schedule to the Limitation Act.
Section 27, therefore, does apply to the suit for possession laid in the
specified Civil Court. E

Section 43 of the Act provides a right to appeal against .specified
orders notwithstanding anything contained in any other law. No appeal
from an award under section 32 or 38 was provided for. Sub-section (2) of
section 43 prescribes limitation for filing the appeal which reads thus : F

"The appeal from the court shall lie to the District Court and
the appeal shall be made within 60 days from the date of coming
into force of the Bombay Agricultural Debtors Relief (Amend-
ment) Act, 1948, or from the date of order or award, as the
case may be, whichever is latter. In computing the period of 60 G
days the provisions contained in Ss. 4, 5 and 12 of the Indian
Limitation Act 1908, shall, so far as may be, applied. Thus, the
legislature prescribe a special limitation for the purpose of the
appeal and the period of limitation of 60 days was to be
computed after taking the aid of Ss. 4; 5 and 12 of the Limita- ij
)-

392 SUPREME COURT REPORTS (1992) 3 S.C.R.

A tion Act. To that extent only the provision of the Limitation
Act stands extended. The applicability of the other provisions,
by necessary implication stands excluded....

Moreover, the words in section 27 that at the determination of the
B 'period hereby limited' to any person for instituting a suit for possession
would imply that the limitation has begun to run against a person for
instituting a suit under s.9 of C.P.C. and had expired. The Legislature
advisedly did not prescribe any period of limitation for recovery of the
possession under the Act which is a beneficial legislation. Section 51A
expressly bars the jurisdiction of the Civil Court. It would follow that where
C a person could not or need not have suit for possession, there is no
question of any determination of the period of limitation to his instituting
a proceeding or a suit for possession. Consequently, no question of the
applicability of section 27 would arise. Thereby the legislature manifested,
by necessary implication, that the period of limit3;tion is not applicable to
D an application for recovery of possession under the Act. The application
for possession is not barred by limitation. Moreover, a suit for possession
by the owner of any property will not be barred if the possession of the
defendant is not adverse to him. So hostile title to the knowledge of the
plaintiff must be asserted and proved. The contention, therefore, that the
appell~nts perfected title by adverse poss~ssion is devoid of substance.
E Remanbhai Trikamlal's ·case concerns limitation to recover the debt crys-
talised in the award. The Full Bench held that the limitation prescribed
under Art. 136 of the Limitation Act, 1963 applies to all awards under the ·
Act whether it relates to an award to recover the money or possession. In
Madhav Laxman Vaikunthe v. State of Mysore, (1962] 1 SCR 886 this Court
F held that to recover arrecus of salary the period of limitation of three years
would be ·applicable. In a suit, to recover a sum due whether based on
contract or tort or under Art. 226 in a master and servant relationship, in
the absence of special rule of limitation, this court applied three years'
limitation. That may proprio ·vigor would be applicable to recover the debt
G under the Act. The Full Bench ratio would, therefore, apply to recover
money due under the Award. But it would not lead to the conclusion that
the doctrine of adverse possession and the period of 12 years prescribed
in the Limitation Act to recover possession need be extended to the
proceedings to recover possession under the Act when the legislature
advisedly omitted to prescribe any such limitations to recover possession
H of the hypothica or the lands charged in the award. The view of the Full
{

PATEL MARGHABHAI v. GALBABHAI [RAMASWAM_Y, J.] 393
I
Bench in the second part that Art.136 of the limitation Act., 1963 would A
apply to all awards including "a possession award" is not correct law.

It is next contended that the executing court has no power to award
mesne profits. Admittedly, the appellants as successors in interest of the
mortgagee continued in pos5ession after the discharge of the debt by the
mortgagor. They enjoyed the property and the Civil Court found as a fact B
that the income derived would be Rs. 5000 per year. There is no material
y contra placed on record. The charge created by the award stands ter-
minated from the date of payment of the award amount. Thereafter the
respondents became entitled to claim mesne profits from the appellants
from the next day of the discharge of the debt. The Civil Court awarded
c
- from a period of three years preceding the date of the application till date
of possession. No appeal or proceedings under Art. 226 or 227 was taken
by the respondent. Payment of mesne profit is consequ~ntial to the execu-
tion of the award for unlawful retention of the possession. Thus the court
has po~er and jurisdiction to award mesne profits as a concomitant of
order for delivery of the possession. Viewed from this perspective we hold D
that the civil court is right to award mesne profits as integral power to
order delivery of possession as this would arise only due to non-delivery of
possession. Accordingly the appellants are liable to pay mesne profits.

The appeal is accordingly dismissed with costs quantified at Rs.
.~ E I
3,000. The appellants are directed to pay the said cost to the Supreme
Court Legal Aid Committee within a period of three months from today.
In default the civil court suo motu should execute the decree for cost and
make over the amount to the credit of the Supreme Court Legal Aid
Committee.

V.P.R. Appeal dismissed.
y