Limitation For Redemption Of Usufructuary Mortgage Starts Only When Mortgage Money Is Paid Or Tendered: Allahabad High Court

"In case of usufructuary mortgage, where no time limit is fixed to seek redemption, the right to seek redemption would not arise on the date of mortgage but will arise on the date when the mortgagor pays or tenders to the mortgagee or deposits in Court, the mortgage money or the balance thereof." Allahabad High Court, in a significant ruling, has held that the period of limitation for a usufructuary mortgagor to recover possession of a property commences only when the mortgage money is paid or tendered.

A bench of Justice Manish Kumar Nigam observed that in such mortgages, the right to redeem is a statutory right that remains subsisting until it is effectively extinguished by a decree of the court or an act of the parties, reaffirming the classic legal maxim "once a mortgage, always a mortgage."

The dispute arose from a mortgage deed executed in 1978 for a house in Bareilly to secure a debt of Rs. 15,000, where the petitioners were put in possession. Although the deed specified a four-year period ending in 1982, the heirs of the original mortgagor tendered the amount via a Bank Pay Order only in December 2015 after a series of requests. When the petitioners refused the tender, a suit for redemption was filed in 2016, which the petitioners challenged as time-barred under Order VII Rule 11 of the C.P.C.

The primary question before the court was whether the 30-year limitation period prescribed under Article 61(a) of the Schedule to the Limitation Act starts from the date of the mortgage's execution or from the date of tender of the mortgage money. The court also had to determine if the expiry of 30 years from the execution of a usufructuary mortgage automatically extinguishes the mortgagor's right to seek possession.

Distinction Between Usufructuary And Other Mortgages

The Court began by analyzing the nature of a usufructuary mortgage under Section 58(d) and Section 62 of the Transfer of Property Act (T.P. Act). It noted that a distinguishing feature of this mortgage is the delivery of possession to the mortgagee, who is authorized to retain such possession until the debt is discharged. The bench emphasized that unlike other mortgages, the usufructuary mortgagor does not usually incur personal liability to repay.

Usufructuary Mortgagor Has Special Right Under Section 62 TPA

The court highlighted that Section 62 of the T.P. Act provides a special right to the usufructuary mortgagor to recover possession. The bench observed that this right is distinct from the general right of redemption under Section 60. The limitation for such a suit does not start for the purposes of Article 61 of the Limitation Act until the mortgage money is paid out of rents and profits or is specifically tendered by the mortgagor.

"Until then, limitation does not start for purposes of Article 61 of the Schedule to the Limitation Act."

Maxim ‘Once A Mortgage, Always A Mortgage’ Reaffirmed

Relying on authoritative texts like Mulla’s Transfer of Property Act and Dr. Rashbehary Ghose's Law of Mortgage, the Court reaffirmed the principle that a mortgage is always redeemable. It noted that any condition which prevents a mortgagor from getting back the property is void as a clog on redemption. The bench stated that time is not of the essence in such transactions, and the right to redeem is co-extensive with the mortgage itself.

"The right of redemption is therefore a statutory right which cannot be fettered by any condition which impedes or prevents redemption. Any such condition is void as a clog on redemption."

Shift In Legal Precedent Regarding Limitation

The Court addressed the petitioners' reliance on the Supreme Court's earlier decisions in Prabhakaran v. M. Azhagiripillai and Sampuran Singh v. Niranjan Kaur. It noted that these views were later considered by a larger bench of the Apex Court in Singh Ram v. Sheo Ram (2014). The Court clarified that the earlier view—which suggested limitation begins on the date of execution—was found to be incorrect by the larger bench.

Limitation Does Not Run From Date Of Mortgage Execution

Justice Nigam pointed out that the Supreme Court in Singh Ram specifically held that in usufructuary mortgages where no time limit is fixed, the right to seek redemption arises only when the money is paid or deposited. Therefore, a mortgagee cannot claim to have become the owner merely because 30 years have passed since the date of the initial mortgage. The High Court observed that this principle ensures the mortgage remains a security for debt and not a means of involuntary title transfer.

"A usufructuary mortgagee is not entitled to file a suit for declaration that he had become an owner merely on the expiry of 30 years from the date of the mortgage."

Application To The Present Facts

Regarding the specific facts of the case, the court noted that the mortgagor’s heirs tendered the principal amount in December 2015. Since this was the first instance of a formal tender being refused, the cause of action for the suit arose on that date. Consequently, the suit filed in March 2016 was well within the 30-year limitation period. The court dismissed the contention that the four-year period mentioned in the deed triggered the limitation clock in 1982.

The High Court concluded that the lower courts committed no error in dismissing the application for rejection of the plaint. It held that the right to recover possession continues until the debt is satisfied, and the limitation period is triggered only by the tender of the mortgage money. The writ petition was accordingly dismissed, allowing the original suit for redemption to proceed.

Date of Decision: 01 July 2026