Holding

The limitation period for a suit under Section 209 begins on the date the mortgagee is demanded to deliver possession and refuses, because the mortgagee’s possession is permissive, not adverse.

Summary

The appellants claimed ownership of several plots recorded in the name of their predecessor, Hira Lal, while the respondents asserted that the land was "sir" and "khudkasht" of their predecessor, Hansraj, who had mortgaged the plots to Hira Lal in 1920. After the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 came into force, the question arose whether the mortgagee’s possession became adverse or remained permissive, and when the three‑year limitation period for a suit under Section 209 of the Act would begin. The Consolidation Officer ruled in favour of Hira Lal; the Assistant Settlement Officer held the possession became adverse and the limitation period started from the date of vesting, causing the respondents to lose their rights. The Full Bench of the Allahabad High Court, and subsequently the Division Bench, held that the limitation period starts only when the mortgagee is demanded to deliver possession and refuses, because the mortgagee’s possession is permissive. The Supreme Court affirmed this view, interpreting Entry 30 of Appendix III and Section 14 of the Act, and dismissed the appeal.

Issues considered

Whether the possession of a mortgagee after the vesting of land under the Zamindari Abolition Act is adverse or permissive.
When does the limitation period for a suit under Section 209 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 commence – from the date of vesting or from the date of demand for possession?

Legislation cited

Transfer of Property Act, 1882s. 73
U.P. Zamindari Abolition and Land Reforms Act, 1950s. 14, s. 18, s. 19, s. 209, s. 210, s. 4(1), s. 6(g), s. 6(h)

Subjects

Zamindari abolitionmortgagee possessionpermissive possessionadverse possessionlimitation periodSection 209Entry 30land reformsimple mortgageBhumidari rights

Judgment

A PRATAP SINGH@ BABU RAM AND ANR
v.
DEPUTY DIRECTOR OF CONSOLIDATION, MAINPURI AND
ORS.

SEPTEMBER 22, 1999
B
[S. SAGHIR AHMAD AND R.P. SETHI, JJ.]

U.P. Zamindari Abolition and Land Refonns Act, 1950: 4(1), 6(g)(h),

c
14, 18 and 209, '210-Appendix III-Entry 30.

Transfer of Property Act, 1882 : Section 73. -
Tenancy and Land Laws-Land recorded in the name of H, predeces-
sor-in-interest of appellants-Initiation, of consolidation proceed-
D ings-Respondent's claim that plots in question constituted "sir" and
"Khudakasht" land of their predecessor-in-interest, A-Ground that A
mortgaged plots to Hon 21.1.1920-Therefore on abolition of zamindari they
should have been recorded as bhumidars-Consolidation officer decided in
-
favour of H-On respondents' appeal Assistant Settlement Officer held that
on abolition of zamindari possession of H became adverse-Since
E respondents' had not filed suit within limitation of three years they lost their
rightS-On revision this order was upheld by Deputy Director Consoli'dation-
Respondents' unsuccessfully challenged the order in a writ before High
-
Court-Thereafter Full Bench of the High Court held that the period of
limitation for suit would not start from the date of vesting but from the date
F on which the possession is demanded by the mortgagor-After decision of
Full Bench Division Bench disposed the appeals in tenns of judgment of Full
Bench and allowed the writ petition of respondents-hence this appeaf--Held
view taken by Full Bench is co"ect-Reading of the words of Entry 30 in
Appendix Ill, relating to suits under S.209 of the Act, makes it clear that the
period of limitation would not run from the date of vesting as the character
G of mortgagee's possession remains 'pennissive' and does not become 'adverse'
to the interest of the mortgagor who after acquiring "Bhumidari" rights under
Section 18, may still allow the mortgagee to continue in possession-Entry 30
would apply to a suit where a person has obtained possession over land
"unlawfully" and continues to retain that possession unlawfullJThe period
H of limitation in the case of 'pennissive' possession would start running from
150
PRATAP SINGH v. DY. DIRECTOR OF CONSOLIDATION [S. SAGHIRAHMAD, J.) 151
I.•
the date the mortgagee, who is asked to deliver possession, refuses to do A
so-Recourse to Section 73 of Transfer of Property Act, held pennissible.

Pennissive possession-What is

Ba/want & Ors. v. 17ze Deputy Director of Consolidation & Ors., AIR
(1975) Allahabad 295, approved. B
~·
Rana Sheo Ambar Singh v. Allahabad Bank Ltd., [1962] 2 SCR 441
= AIR (1961) SC 1790 and Raj Narain v. Sant Prasad, AIR (1973) SC 291,
referred to.

Shri Ram v. Dilan Bahadur Singh, AIR (1965) Allahabad 223; Mustafa c
Khan v. Deputy Director of Consolidation, (1972) AW 854 = AIR (1973)
Allahabad 372; Mahabal Singh v. Ram Raj, (1950) AW 713 = AIR (1950)
Allahabad 604 and Tribeni v. Chakaun· & Ors., (1982) AW 784, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 788 of D
1981.

From the Judgment and Order dated 9.8.78 of the Allahabad High
Court in S.A. No. 845 of 1969.
")-
Shanti Bhushan and J.P. Goyal, S.S. Khanduja and R.P. Goyal for E
the Appellants.

Promod Dayal and Piyush Sharma for the Respondents.

The following Order of the Court was delivered :
F
S. SAGHIR AHMAD, J. Plot Nos. 510, 519, 520, 521, 522, 523, 524
and 533 of Khata No. 76 situated in village Akbarpur Kutubpur, Pargana
Mustafabad, Tehsil J asrana,, District Mainpuri, were recorded in the basic
.,... year in the name of Hira Lal, father of the present appellants. When the
.. Consolidation operations under the U.P. Consolidation of Holdings Act G
(for short 'the Act') started, the respondents filed objections claiming, inter
alia, that the plots in question constituted "Sir" and "Khudkasht" land of
their predecessor-in-interest, namely, Hansraj, who had mortgaged these
plots in favour of the predecessor-in-interest of the appellants on 21.1.1920.
On the abolition of the Zamindari by the U.P. Zamindari Abolition and H
152 .SUPREME COURT REPORTS (1999) SUPP. 3 S.C.R.

- A Land Reforms Act, 1950 (for short 'the ZA&LR Act') they ought to have
been recorded as "Bhumidhars" of the said land in view of Section 14 of
the ZA & LR Act.

The appellants contested the case before the Consolidation Officer
B by filing a written statement !Ind the Consolidation Officer by his judgment
and order.dated 29.5.1963 decided the case in favour of Hirn Lal.

In appeal which was filed thereafter by the respondent~;, it was held
by the Assistant Settlement Officer, Consolidatio!J, by his judgment and
order dated 11.7.1963, that on the abolition of Zamindari, possession of
C Hira Lal became adverse and since the respondents had not filed a suit for
ejectment within the .period of limitation (three years from the date of
vesting), they lost all their rights and consequently, the revenue entries in
favour ofHira Lal could not be interfered with. T_his order was upheld in
revision by .the Deputy Director of Consolidation who dismissed the
D revision on 6.9.1963,

The respondents, thereafter, filed a writ petition in the High Court
which was dismissed on 1.5.1969. In Special Appeal, which was
thereafter filed by the respondents, it was noticed, at the time of
hearing, that there was a conflict of decisions on the questions involved ~

E in the case and consequently following two questions were referred to I
the Full Bench :

"(a) Whether the possession of the mortgagee whose rights have
extinguished under Section 14(1) of the Zamindari Abolition
F and Land Reforms Act is, on or after the date of vesting, per
se, adverse or permissive?

(b) Does the period of limitation. for a suit under Section 209 of
·the U:P. Zamindari Abolition"and Land Reforms Act com-
mence to run from the date of vesting or on the date of
G ·demand for possession?"

The Full Bench by majority opinion, which is since repor1ted in AIR
1975 Allahabad 295 (Ba/want & Ors. v. The Deputy Director of
Consolidation & Ors.), held that the period of limitation for suit under .
H Section 209 of the ZA & LR Act would not start from the date of vesting
PRATAP SINGH v. DY. DIRECTOR OF CONSOLIDATION [S. AHMAD, J.] 153

but from the date on which the possession is demanded by the mortgagor. A

After the decision of the Full Bench on the aforesaid questions of
law, the matter was again placed before the Division Bench which disposed
of the Special Appeal in terms of the majority judgment of the Full Bench.
The writ petition filed by the respondents was allowed and the judgment B
passed by the Deputy Director of Consolidation was set aside. It is this
judgment which is assailed before us.

Learned counsel for the appellants has invited our attention to Entry
30 in Appendix III to the Rules made under the ZA & LR Act. This entry c
reads as under :

S. Sect- Description of suit, Period Time from Proper court-
No. ion of application and of Jim- which peri- fee
the Act other proceeding itation od begins to D
run
30. 209 Suit for ejectment of
a person taking or
retaining posse-
ssion of the land E
unlawfully and for
damages:-
(i) If the person was in Three From the As IIl the
possession of the years date of Court Fees
land on the date of vesting. Act, 1870, on F
vesting and the one year's
period of limitation rent calcula-
for his ejectment ted at here-
specified in the U .P. dietary rates.
Tenancy Act, 1939
had not expired.
G

(ii) In case of Three From the - do -
occupants referred years date of
to in Section 144 declaration
u/s 144.
H
154 SUPREME COURT REPORTS [1999) SUPP. 3 S.C.R.

A (iii) In case of occu- Six From 1st - do -
pants of land held year of July J
by a bhumidhar in following
the Govt. Estates in the date of
which the provi- occupation
sions of the Act
B
have been extended
from time to time
(including 85 settled
Bhabar Villages of
Tarai and Bhabar
c .
Govt. Estates.
(iv) In case of occupants Twelve - do - - do -
of any other land h years
eld by a Bhumidhar
or as amt where
D possession of such .

land is taken or
retained unlawfully.

According to the above entry, a suit for ejectment against the person
E taking or retaining possession of the land unlawfully and for damages could
be filed within three years from the date of vesting. Learned counsel for
the appellants has contended that the words "from the date of ve.sting"
refer to the date from which the period of three years would start running. {_
He contended that the period of limitation has to be counted from the date
of vesting, i.e.1.7.1952 and since the suit by the predecessor-in- interest of
F the respondents was not filed within three years from that date, his rights
in the land in question came to an end and the predecessor-in-interest of
the appellants acquired title by adverse possession.

We are not prepared to subscribe to this view. The significant words
G in this entry are "taking or retaining possession of the land unlawfully". If
the possession from the inception was lawful, it would remain lawful. Its
character would not change as we shall presently see with reference to
various provisions of the ZA & LR Act.

H Zamindari was abolished in the State of Uttar Pradesh by the U.P.
PRATAP SINGH v. DY. DIRECTOR OF CONSOLIDATION [S. AHMAD, J.] 155

Zamindari Abolition and Land Reforms Act, 1950, which came into force A
on 1.7.1952. Section 4(1) of this Act provides that with effect from the date
specified in the Notification issued by the State Government under this
Section, all estates shall vest in the State free from all encumbrances.
Consequences of vesting are indicated in Section 6. Clauses (g) and (h) of
Section 6 provide as under :
B
"(g)(i) every mortgage with possession existing on any estate
or part of an estate on the date immediately preceding
the date of vesting shall, to the extent of the amount
secured on such estate or part, be deemed, without
prejudice to the rights of the State Government under C
Section 4, to have been substituted by a simple
mortgage;

(ii) notwithstanding anything contained in the mortgage
deed or any other agreement, the amount declared due D
on a simple mortgage substituted under sub-clause (i)
shall carry such rate of interest and from such date as
may be prescribed;

(h) no claim or liability enforceable or incurred before the date
of vesting by or against such intermediary for any money, E
'
which is charged on or is secured by mortgage of such estate
or part thereof shall, except as provided in Section 73 of the
Transfer of Property Act, 1882 (IV of 1882), be enforceable
against his interest in the estate;"
F
Under clause (g) quoted above, a mortgage with possession stands
converted into a simple mortgage, while clause (h) provides that no claim
for money against an intermediary, relating to the mortgage, would be
enforceable against the interest of the intermediary in the esMe except as
provided under Section 73 of the Transfer of Property Act. The obvious
reason is that the interest of the intermediary has vested in the State free G
from all encumbrances and, therefore, mortgage cannot be enforced
against that interest even for recovery of mortgage money. Recourse can,
therefore, be had to the provisions of Section 73 of the Transfer of Property
Act to proceed against the substituted security for the recovery of the
mortgage money. H
156 SUPREME COURT RFPORTS (1999) SUPP. 3 S.C.R.

A Section 14 of the Act [as it. stood at the relevant time] provided as
under:

"(1) Subject to the provisions of sub-section (2) a mortgagee in
possession of an estate or share therein shall, with effect from the
date of vesting, cease to have any right to hold or possess as such
B any land in such estates.

(2) Where any such land was in the personal cultivation of the
mortgagee on the date immediately preceding the date of
vesting -

C (a) if it was sir or khudkasht of the mortgagor on the date of
the mortgage, the same shall, for purposes of Section 18, be
deemed to be the sir or khudkasht of the mortgagor or his legal
representative;

(b) if it was not sir or khudkasht of the mortgagor on the date
D of the mortgage the mortgagee shall, subject to his paying to the
State Government, within six months from the date of vesting an
amount equal to five times the rent calculated at hereditary rates
applicable on the date immediately preceding the date of vesting,
be deemed, for purposes of Section 19, to have held such land on
E the date aforesaid as a hereditary tenant thereof at the said rate
of rent:

Provided that if the mortgagee fails to pay the amount aforesaid
l
within the time allowed, he shall thereupon lose all rights in such
land which shall be deemed to be vacant land and he shall be liable
F to ejectment on the suit of the Gaon Sabha or the Collector, under
Section 209 as if he were a person in possession thereof otherwise
than in accordance with the provisions of this Act,

Explanation I. For the purposes of this section a mortgagee in
possession includes a thekedar of his rights as mortgagee in the
G
land.

Explanation II. Where any land has been mortgaged with
possession and the mortgagor makes a second or subsequent
mortgage of such land in favour of the same, or a different person,
H the expression on the date of the mortgage, shall mean the date
PRATAP SINGH v. DY. DIRECTOR OF CONSOLIDATION [S. AHMAD, J.] 157
of the mortgage in pursuance of whicn the mortgagor first trans- A
ferred possession to mortgagee."

Section 14 (1) purports to abolish all the rights of the mortgagee in
possession of an· estate or a share therein with effect from the date of
vesting. It specifically provides that a mortgagee iri possession shall cease
to have any right to h.old or possess land in such estate. Sub-section (1), B
however, operates subject to the provisions of Sub-section (2) as is evident
from the opening words of Sub-section (1). Sub-section (2) provides that
if the land, which was the subject matter of the mortgage referred to in
Sub-section (1), was in the personal cultivation of the mortgagee on the
date immediately preceding the date of vesting, then, if such land was 'sir' G
or 'khudkasht' land of the mortgagor on the date of the mortgage, the said
land shall be deemed to be 'sir' or 'khudkasht' of the mortgagor for
purposes of Section 18. The implication of this provision is that even if the
land was in the cultivatory possession of the mortgagee, on the date of
vesting, it would be treated, fictionally, 'sir' or 'khudkasht' of the D
mortgagor, provided the land, on the date of the mortgage, was the 'sir' or
'khudkasht' of the mortgagor. The immediate effect of this deeming
provision would be that the mortgagor would acquire 'Bhumidari' rights in
respect of that land under Section 18 of the Act. Thus, the overall effect
of Sub-section (1) and (2) of Section 14 is that the rights of a mortgagee
come to an end with effect from the date of vesting and the mortgagor E
becomes 'Bhumidhar' of that land under Section 18 of the Act. To put it
differently, the encumbrance created by the mortgagor comes to an end as
the land vests in the State free from encumbrance but the rights of the
mortgagee to recover mortgage money is preserved as it is provided in
Section 6(h) that it can be recovered from the "substituted security" under
F
Section 73 of the Transfer of Property Act.

0

We may point out th at "Bhumidari" rights, acquired by the
mortgagor under Section 18, are new rights created under the Act after
the land in which such rights have been acquired had vested in the State
free from all encumbrances. This land, notwithstanding that it was the G
subject matter of mortgage prior to the date of vesting, would not be
treated as 'substituted security' within the meaning of Section 73 of the
Transfer of Property Act and a mortgage decree, if any, cannot be executed
against that land. (See: Rana Shea Ambar Singh v. Allahabad Bank Ltd.,
[1962] 2 SCR 441 = AIR 1961 SC 1790). H
158 SUPREME COURT REPORTS [1999] SUPP. 3 S.C.R.

A The next and immediate question which crops up is the question
relating to the status of the mortgagee in respect of that land. Even though
the mortgagee was in cultivatory possession of the land on the date of
vesting, his rights under the mortgage qua that land come to end as that
land vests in the State subject to the condition that if the land, on the date
of the mortgage was "sir" or "khudkasht" land of the mortgagor, the latter,
B namely the mortgagor would become a 'Bhumidhar' under S~ction 18.

If in these circumstances, the mortgagee continues to remain in
possession in spite of his rights having come to an end by the force of law,
what would be the character of his possession; whether the possession
C would immediately become 'hostile' to that of the mortgagor who has
acquired 'Bhumidari' rights under Section 18, or the mortgagee would be
treated to be continuing in possession for and on behalf of the mortgagor.
It is, at this stage, that the words used in Entry 30 relating to suits under
Section 209 of the Act as set out in Appendix III to the Rules made under
D the ZA & LR Act become relevant. In Column 3 meant for "Description
. of suit, application and other proceeding'', the words used are "Suit for
ejectment of a person taking or retaining possession of the land unlawfully
and for damages." These words contemplate a suit for ejectment of a
person who has taken possession unlawfully or continues to retain that
possession unlawfully. In the case of possessory or usufructuary mortgage,
E possession is delivered to the mortgagee. Delivery of possession to the
mortgagee is a sine qua non of such a mortgage. It is delivered in terms of
the mortgage by the mortgagor of his own volition to the mortgagee. The
mortgagee gets possession over the land only because it has been delivered
to him in terms of the mortgage deed which equally binds him. The entry
p into possession of the mortgagee in these circumstances cannot be said to
be unlawful. Once the possession was delivered to the mortgagee lawfully
by the mortgagor himself, the further retention of that possession by the
mortgagee would obviously be with the consent of the mortgagor and the
mortgagee shall be treated to be retaining the possession for and on behalf
of the mortgagor till the mortgage is redeemed. The character of posses-
G sion of the mortgagee who was lawfully inducted into possession by the
mortgagor, does not change at any stage and it continues to be lawful
possess10n.

A bare reading of the words of Entry 30 in Appendix III, relating to
H suits under Section 209 of the Act, makes it clear that the period of
PRATAP SINGH v. DY. DIRi'lCTOR OF CONSOLIDATION (S. AHMAD, J.) 159

limitation would not run from the date of vesting, as the character of A
mortgagee's possession remains 'permissive' and does not become 'adverse'
to the interest of the mortgagor who after acquiring "Bhumidari" rights
under Section 18, may still allow the mortgagee to continue in possession.
As pointed out earlier, Entry 30 would apply to a suit where a person has
obtained possession over land "unlawfully" and continues to retain that
possession unlawfully. The period of limitation in the case of a 'permissive'
B
possession would start runni11g from the date the mortgagee, who is asked
to deliver possessiop., refuses to do so. 'Permissive possession' means that
the mortgagee is in possession over the property in question with the leave
of the owner, or to put it differently, of the 'Bhurnidar'. If on being asked
to deliver possession, the mortgagee refuses or declines to do so, it would c
give rise to a cause of action on the date on which possession is refused to
be delivered and consequently the period of three years would start run-
. ning from that date.

The High Court has considered the question ·from another angle. It D
has noticed that a usufructuary mortgage stands converted into simple
mortgage. It then proceeded to consider the ingredients of a simple
mortgage and ultimately came to the conclusion that if the matter is
examined from that angle, then too, the possession of the mortgagee would
be permissive in character and the .period of limitation for filing a suit
under Section 209 would commence from the date on which the mortgagee E
refuses to deliver possession.

In Shri Ram v. Dhan Bahadur Singh, AIR (1965) Allahabad 223 as
also in Mustafa Khan v. Deputy Director of Consolidation, (1972) AU
854=AIR (1973) Allahabad 372, it was held that possession of the F
mortgagee is permissive in the sense that it is with the consent of the
mortgagor. In Mahabal Singh v. Ram Raj, (1950) AU 713 =AIR (1950)
Allahabad 604, which is a Full Bench decision of the High Court, it was
held that possession of a mortgagee of tenancy land, whose transfer was
forbidden by law, would be 'permissive' in character. This decision has
since been approved in Raj Narain v. Sant Prasad, AIR (1973) SC 291 in G
which this Court observed, inter alia, as under :

"We are unable to accede to the above contention, because we
find that the matter is covered by two Full Bench decisions of the
Allahabad High Court. In a five-Judge decision of the Allahabad H
160 SUPREME COURT REPORTS [1999] SUPP. 3 S.C.R.

A High Court in the case of AIR 1950 All 604 (supra), the Court
referred to the decision of a three judge bench of that Court in
the case of AIR 1944 All 25 (supra) and found that the following
five propositions had been laid down in the earlier case :

"(1) That the usufructuary mortgage of an occupancy holding
B by a tenant is void and not voidable.

(2) That a mortgagor after giving possession to the mortgagee
cannot recover possession of the holding without paying the
money which he had taken from the mortgagee.
c (3) That a mortgagee of an occupancy holding by remaining
in possession for over 12 years does not extinguish the rights
of the mortgagor to redeem him and by such possession the
mortgagee only prescribes for mortgagee rights.

D (4) That it is open to the mortgagor to seek possession of the
holding by tendering t~e consideration which he had received
and he may do so by a redemption suit.

(5) The relationship which comes into existence as a result
of the mortgage of an occupancy holding and its possession
E being transferred to the mortgagee, though not strictly speak-
ing that of a mortgagor and a mortgagee, is analogous to that
relationship, and the action which is raised by the mortgagor
to recover possession of the holding on payment of the money
due to the mortgaeee, though not strictly in the nature of a
F redemption, is analogous to a redemption suit."

It was also observed that to take a contrary view from the law
laid down in those five propositions would have the effect of
unsettling the law established for a number of years. Mr. Agarwal
has not questioned the correctness of the above mentioned five
G propositions and, in our opinion, rightly so. In the matter of the
interpretation of a localstatute, the view taken by the High Court
over a number of years should normally be adhered to and not
disturbed. A different view would not only introduce an element
of uncertainity and confusion, it would also have the effect of
H unsettling transactions which might have been entered into on the
PRATAP SINGH v. DY. DIRECTOR OF CONSOLIDATION (S. AHMAD, J.] 161

faith of those decisions. The doctrine of stare decisis can be aptly A-
invoked in such a situation."

We are not, in this case, considering the question of the mortgagee
acquiring title by adverse possession against the mortgagor. Thal question
is separate and distinct from the question we are considering in the instant
case in which we are concerned only with the interpretation of Entry 30 of B
Appendix III which prescribes the period of limitation for a suit under
Section 209 of the UPZA & LR Act. Of course, if the suit is not filed within
the period of limitation, the consequences indicated in Section 210 of the
ZA & LR Act will follow with the result that the person already in
possession unlawfully or retaining such possession qua the "Bhumidari" C
land: would immediately acquire the status contemplated by Section 210.

In our opinion, the majority decision of the Full Bench lays down the
correct law. The Full Bench decision has since been followed by Hon. R.M.
Sahai, J. (as His Lordship then was) in Tribeni v. Chakauri & Ors., (1982)

] ALJ 784, in which it was laid down that the rights of a mortgagee come to
an end from the date of vesting and his possession was 'permissive' m
character and not adverse to the interest of the mortgagor.
D

We find no merit in this appeal which is accordingly dismissed. There
will be no order as to costs.

T.NA. Appeal dismissed.