Introduction:

The Kerala High Court, in Sivanandan & Ors v. Ani and Anr [RSA 974 of 2011; 2025 LiveLaw (Ker) 430], delivered a landmark judgment reaffirming the statutory sanctity of a mortgagor’s right to redemption under a usufructuary mortgage and resolving multiple issues related to property and civil law. Justice Easwaran S presided over this complex dispute involving family members contesting property rights, redemption of mortgage, validity of a gift deed, and the maintainability of a counterclaim. The Court addressed critical questions on whether the redemption right under Section 60 of the Transfer of Property Act, 1882 (TPA) can be curtailed by limitation, the permissibility of a Registrar acting as an attesting witness under Section 123 TPA, and the applicability of Section 68 of the Indian Evidence Act, 1872. It further analyzed Section 92 of TPA concerning co-mortgagor’s redemption and subrogation, and evaluated the interplay of Section 60 TPA with Section 61 of the Limitation Act, 1963. By setting aside findings of the trial and first appellate courts, the High Court reiterated the enduring principle that “once a mortgage, always a mortgage” and emphasized that redemption rights cannot be extinguished merely by efflux of time without foreclosure proceedings.

Arguments by the Appellants:

The appellants, represented by advocates K Rajesh Kannan, A S Shammy Raj, P Shanes Methar, and G S Reghunath, argued that the trial court and first appellate court committed a grave error in holding the redemption suit as time-barred. They submitted that the right of redemption is statutory and subsists until foreclosure or sale by decree, in accordance with the doctrine laid down in Section 60 TPA. They asserted that under a usufructuary mortgage, possession of the property remains with the mortgagee to enjoy usufruct in lieu of interest, and unless the mortgage is foreclosed by due process, the mortgagor retains an indefeasible right to redeem. The appellants contended that Section 61 of the Limitation Act must be harmoniously read with Section 60 TPA and cannot override the substantive right of redemption. Further, they argued that the counterclaim by the respondents lacked a valid cause of action and was unrelated to the plaint schedule property, making it non-maintainable as per the ratio in Jag Mohan Chawla v. Dhera Radha Swami Satsang [(1996) 4 SCC 699]. They also questioned the lower courts’ invalidation of the gift deed under Section 123 TPA, asserting that a Registrar can act as an attesting witness if the statutory requirement of animus attestandi is satisfied. Lastly, they argued that Section 68 of the Evidence Act was inapplicable since the executant never denied execution during his lifetime, relying on Surendra Kumar v. Nathulal [2001 (5) SCC 46].

Arguments by the Respondents:

Counsel for the respondents, B Krishna Mani, argued that the appellants’ suit for redemption was barred by limitation as it was not filed within 30 years from the date of execution of the mortgage deed, which is the prescribed period under Article 61 of the Limitation Act. It was contended that the right to redeem or recover possession accrues on the date of mortgage, and failure to exercise it within 30 years extinguishes the remedy. The respondents maintained that the lower courts rightly dismissed the redemption claim on this ground. Regarding the gift deed, they alleged non-compliance with Section 123 TPA, asserting that mere signature by a Registrar does not amount to attestation unless accompanied by requisite intention. They also invoked Section 68 of the Evidence Act to challenge the validity of the gift deed for lack of proof through attesting witnesses. Additionally, the respondents defended the counterclaim as maintainable, asserting that it stemmed from the same transaction and involved closely connected parties, thereby justifying adjudication in the same suit.

Court’s Judgment:

Justice Easwaran S delivered a detailed judgment, allowing the appeals and overturning the findings of the lower courts. The Court began by reaffirming the statutory nature of the right to redemption under Section 60 TPA, stating that it can only be extinguished by the acts of the parties or by a decree of a competent court. The proviso to Section 60, which specifies these two modes of extinguishment, leaves no scope for limitation to override the substantive right absent foreclosure proceedings. The Court observed:

 “The right of redemption is a statutory right and can be extinguished only by the stipulations contained under the proviso to Section 60. When the right of redemption is curtailed on the ground that the suit is not filed within 30 years from the date of mortgage, it conflicts with Section 60 of the Act of 1882.”

 The Court held that in the absence of foreclosure proceedings or a sale decree, the principle “once a mortgage, always a mortgage” applies, ensuring continuous redemption rights. It criticized the lower courts for misinterpreting Article 61 of the Limitation Act, clarifying that limitation does not commence merely on the execution of the mortgage in usufructuary cases where the mortgagee enjoys possession and the mortgagor has not been dispossessed.

Addressing the validity of the gift deed, the Court ruled that there is no statutory bar on a Registrar acting as an attesting witness under Section 123 TPA, provided the Registrar signs the document with animus attestandi. It upheld the attestation as valid and rejected the respondents’ challenge. On the applicability of Section 68 of the Evidence Act, the Court noted that the requirement to examine an attesting witness arises only when the execution is denied by the executant. Since the executant never denied execution during his lifetime, the respondents’ objection lacked merit. The Court relied on Surendra Kumar v. Nathulal to reinforce this interpretation.

On the issue of counterclaim, the Court referred to Jag Mohan Chawla v. Dhera Radha Swami Satsang and held that the respondents’ counterclaim was unsustainable because it involved a different cause of action and property unrelated to the original suit schedule. Consequently, it dismissed the counterclaim as not maintainable.

In conclusion, the Court allowed the appeals, restoring the mortgagor’s right to redeem and validating the gift deed. It underscored that statutory rights under property law cannot be defeated by misapplication of limitation principles and emphasized judicial responsibility to harmonize procedural provisions with substantive rights.

Key Legal Clarifications from the Judgment:

• Right to Redemption: Continuous until foreclosure or sale; limitation cannot arbitrarily extinguish this statutory right.
• Interaction of Limitation and TPA: Article 61 of Limitation Act must be read harmoniously with Section 60 TPA.
• Registrar as Attesting Witness: Permissible under Section 123 TPA if intention to attest exists.
• Proof under Section 68 Evidence Act: Applicable only when execution is denied; not otherwise.
• Counterclaim Maintainability: Not permissible if based on a different cause of action and unrelated property.

Impact of the Judgment:

This decision strengthens property law jurisprudence by reaffirming that redemption rights under usufructuary mortgages are enduring and cannot be curtailed except in strict compliance with statutory provisions. It offers clarity on contentious issues such as attestation requirements, the evidentiary burden under Section 68 of the Evidence Act, and the scope of counterclaims in civil suits. By aligning procedural law with substantive rights, the judgment protects mortgagors from arbitrary denial of redemption and preserves the principle that mortgages are inherently redeemable until legally foreclosed.