Padma Vithoba Chakkayya vs Mohd. Multani

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 620 of 1960

Decision Date: 4 May 1962

Coram: K.C. Das Gupta, J.R. Mudholkar, Venkatarama Aiyar

In the case of Padma Vithoba Chakkayya versus Mohammad Multani, the judgment was delivered on 4 May 1962 by the Supreme Court of India. The bench that heard the appeal comprised Justices K. C. Das Gupta, J. R. Mudholkar, and T. L. Venkatarama Aiyar. The citation for this decision appears as 1963 AIR 70 and 1963 SCR (3) 229. The matter concerned the law of adverse possession, particularly the situation where a usufructuary mortgagee obtained an invalid sale with the consent of the mortgagor, who was a minor, and the nature of possession when it is altered by agreement.

The factual background, as recorded in the headnote, shows that in 1961 the mortgagor, identified as “R”, executed a usufructuary mortgage of the suit lands in favour of the respondent, “M”. Earlier, in 1923, the same mortgagor executed a sale deed of those lands in favour of Rajanna, who was the uncle of the appellant. The appellant and Rajanna subsequently formed a joint Hindu family. Because Rajanna encountered difficulty in obtaining possession of the lands, he entered into an arrangement with the mortgagor R and the respondent M whereby the 1923 sale deed was cancelled by making endorsements on the back of the deed, and the lands were then sold by R directly to M. Rajanna died in 1930 while still a minor, and in 1943 the appellant instituted a suit against M seeking possession of the lands. The appellant argued that the cancellation of the 1923 sale deed was ineffective because it had not been registered; consequently, the subsequent sale deed in favour of M conveyed no title. M, for his part, pleaded that he had acquired title by adverse possession arising from the invalid sale.

The trial court dismissed the appellant’s suit on the ground that it was filed more than three years after the appellant had attained majority, rendering the suit time‑barred. On appeal, the Court examined whether the appellant could maintain a suit for redemption of the property in the event that M had not yet acquired title by prescription. The Court held that although the suit for possession was indeed barred by limitation, the appellant retained a right to file a suit for redemption provided the respondent had not already acquired a prescribed title through adverse possession. The Court further explained that a mortgagee who entered into possession could acquire title by prescription only if there was a change in the character of his possession arising from an agreement with the owner. In this case, the endorsements indicating cancellation of the sale deed, when taken together with the sale deed in favour of M, were admissible evidence to demonstrate the nature of M’s possession. This arrangement would show that M’s possession was adverse only if Rajanna was not a minor and therefore capable of giving consent.

The Court emphasized that, while there are circumstances where adverse possession can be claimed against a minor, possession that was lawful at its inception cannot become adverse through an arrangement with a minor. A minor, by law, is incapable of giving consent; consequently, without such consent there can be no alteration in the character of possession, which must be effected by mutual agreement rather than by unilateral action. The Court relied on the precedents set in Kanda Sami Pillai v. Chinnabba (1920) I.L.R. 44 Mad. 253, Varatha Pillai v. Jeevarathnammal (1918) L.R. 46 I.A. 285, and referred to Sitharama Raju v. Subba Raju (1921) I.L.R. 45 Mad. 361. In sum, the Court concluded that M could not acquire title by adverse possession where the cancellation of the original sale deed had been effected without the valid consent of the minor owner, and the appellant’s right to seek redemption remained viable.

The appeal, recorded as Second Appeal Suit No 476/4 of 1954 Fasli, was argued on behalf of the appellant by counsel Gopal Singh and B S Narula, while counsel A Banganatham Chetty, A V Rangam, A Vedavali and P C Agarwala represented respondent No 1. The judgment was delivered on 4 May 1962 by Justice Venkatarama Aiyer. This proceeding constituted a special leave appeal against the decision of the Hyderabad High Court, which had affirmed the order of the Additional District Judge of Adilabad dismissing the appellant’s suit.

The factual background involved a joint family consisting of Chakkayya and his younger brother Rajanna. Chakkayya died in 1923, leaving his infant son, the appellant, who was a few months old at the time. On 21 December 1923, the second defendant, Rama Rao, executed a sale of the lands that are the subject of this suit to Rajanna. Because Rajanna encountered difficulties in obtaining possession of the properties, which were said to have been usufructuarily mortgaged to the first defendant, the sale transaction was cancelled and this cancellation was endorsed on the sale deed. Subsequently, the second defendant executed a new sale deed in favor of the first defendant, who has remained in possession of the lands ever since.

The appellant instituted a suit on 14 February 1943 seeking recovery of possession of the properties from the first defendant. The appellant alleged that the first defendant had been managing the properties of the joint family of Chakkayya and Rajanna, that the original sale deed dated 21 December 1923 vested title in the joint family, and that the first defendant had entered the management of those properties as a manager for the joint family. The appellant further claimed that Rajanna died in 1930 while still a minor, that the first defendant was discharged from his managerial role in 1933, and that the first defendant had failed to surrender possession of the properties to the family. Instead, the first defendant purported to claim ownership based on a later sale deed executed by the second defendant after the 1923 sale to Rajanna, a deed which, according to the appellant, could not confer any title because the second defendant no longer possessed a conveyable title after having previously sold the lands to Rajanna. The appellant also stated that he attained majority in June 1940 and that the suit was filed within three years of his attaining majority, thereby not being barred by the limitation period.

The first defendant contested the suit. He asserted that he was merely a jawan or servant employed by the family and not a manager of the joint family properties. He contended that the suit lands had been usufructuarily mortgaged to him in 1916 for a sum of Rs 800, a transaction that pre‑dated the 1923 sale to Rajanna. He further claimed that the sale in favor of Rajanna had been cancelled with his consent after the consideration had been returned, and that the subsequent sale by the second defendant to him gave him a good title. He argued that having remained in possession of the properties for a period exceeding the statutory limitation while asserting ownership, he had acquired title by prescription and that the suit was therefore barred by limitation. He also denied that Rajanna was a minor at the relevant times.

The second defendant asserted that the earlier sale deed in favour of Rajanna had been cancelled with his consent after he had received back the entire consideration. He claimed that after this cancellation the second defendant transferred the properties to the plaintiff, thereby giving the plaintiff a valid and marketable title. Moreover, the second defendant contended that the plaintiff had remained in uninterrupted possession of the lands for a period exceeding the statutory limit while claiming ownership, and that, as a result of such continuous possession, the plaintiff had acquired ownership by prescription. On the basis of this alleged prescription, the second defendant argued that the plaintiff’s suit was barred by limitation. Additionally, the second defendant denied the allegation in the plaint that Rajanna was a minor at the relevant times.

On the basis of these pleadings, the learned District Munsiff formulated four specific questions for adjudication. First, whether the suit lands had been sold by defendant No 2 to Padma Rajanna by means of a registered sale deed dated 17 Bahman 1334‑F, which corresponds to 21 December 1923. Second, whether the plaintiff’s family and Padma Rajanna constituted a joint family as alleged in the suit, and whether, because of Rajanna’s death, the plaintiff was entitled to the suit lands. Third, whether defendant No 2 had executed a subsequent sale deed dated 3 Farwardi 1334‑F (corresponding to 4 February 1925) and, if so, what legal effect that deed had on the earlier deed dated 17 Bahman 1334‑F. Fourth, whether the plaintiff was a minor at the time the sale deed dated 3 Farwardi 1334‑F was executed, and whether the present suit was filed within the period prescribed by law. The Munsiff also sought to determine the appropriate relief, if any, to which the parties might be entitled.

The learned District Munsiff, Nirmal, who conducted the trial, held that the endorsement effecting the cancellation of the sale deed in favour of Rajanna had not been registered and therefore did not create any legal title in the second defendant. Consequently, the Munsiff concluded that the later sale by the second defendant to the first defendant could not convey any valid title. The Munsiff further examined the limitation issue and found that the suit had been instituted within three years of the plaintiff attaining majority, thereby satisfying the limitation requirement. On these grounds, the Munsiff decreed in favour of the plaintiff and granted the relief claimed in the suit.

The respondents challenged the Munsiff’s decree by filing an appeal before the Additional District Court of Adilabad. That Court held that the plaintiff had failed to prove that he had attained majority within three years of the filing of the suit, and consequently allowed the appeal, setting aside the decree. The appellant then pursued a second appeal to the High Court of Hyderabad. The High Court examined the findings of the lower courts and, agreeing with the District Munsiff’s view on the limitation point, held that the suit had been filed more than three years after the plaintiff reached majority. Accordingly, the High Court dismissed the appeal and upheld the decree of the District Munsiff. The present petition is filed for special leave to appeal against that High Court judgment. The appellant’s primary contention is that the finding that the plaintiff had attained majority more than three years before the suit is erroneous. However, the appellate judges observed that the finding relates to a factual issue that was concurred by the lower courts, and they saw no sufficient reason to disturb those factual determinations. The appellant’s further arguments were therefore not entertained.

The appeal was vigorously supported by counsel who argued that the first defendant had been placed in charge of all the properties belonging to the plaintiff’s family. According to that argument, because the first defendant had taken possession of the suit lands while acting as manager for the family, he could not later claim ownership by adverse possession unless he first gave up that possession. The judges of the High Court, however, observed that the plaintiff had not produced satisfactory proof that the first defendant had acted as the family’s agent or manager. In response, the appellant asserted that the plaint contained a substantial body of evidence showing that the first defendant was more than a simple servant; he was the manager of the properties, and he had not appeared in court to deny those allegations. The appellant contended that, on these facts, the first defendant should be regarded as having entered possession in the capacity of manager, which would preclude him from establishing a title by adverse possession. The respondent, on the other hand, maintained that the first defendant was merely a soldier in the service of the appellant’s family and had no involvement in property management. The respondent further argued that the plaintiff’s pleadings lacked any credible evidence to support the claim that the first defendant managed the land, and therefore the respondent saw no reason why the first defendant should have been called to testify to refute the allegation of management. The court noted that if the resolution of the appeal depended on this factual question, the material before it made it difficult to agree with the High Court’s conclusion. The court explained that the first defendant’s failure to appear in court would ordinarily shift the burden of proving that he was not a manager onto him, citing the authorities Murugesam Pillai v. Manickavasaka Pandara and Guruswami Nadar v. Gopalaswami Odayar.

The respondent then pointed out that the suit lands had come into the first defendant’s possession through a usufructuary mortgage executed by the second defendant in the year 1916. No allegation had been made that this mortgage was obtained while the first defendant was acting as the family’s manager or on the family’s behalf. Accordingly, once the first defendant’s possession was traced to the 1916 usufructuary mortgage, there could be no further question of him having entered possession as a manager for the family. The appellant did not contest the existence of the usufructuary mortgage in favor of the first defendant, nor did the appellant claim that the first defendant had acted on the family’s behalf in taking that mortgage. The court found such a contention untenable, noting that at the relevant time the plaintiff’s father, Chakkayya, was alive and himself served as the manager of the joint family. Hence, the issue of whether the first defendant was precluded from acquiring title by adverse possession as a manager did not arise, because his possession stemmed from his own right as mortgagee rather than from any managerial role.

In this case, the Court observed that because the father of the plaintiff was alive at the relevant time, the issue of whether the first defendant, acting as manager, was barred from acquiring title by adverse possession did not need to be decided. The Court explained that the first defendant had taken possession of the properties in his own capacity as a usufructuary mortgagee. Having found that the first defendant had entered into possession as a usufructuary mortgagee in 1916, the Court turned to the rights of the appellant. The Court stated that, on the basis of the sale deed executed by the second defendant in favour of Rajanna, the appellant would be entitled to redeem the mortgage. However, the suit before the Court was not an action for redemption of the mortgage but an ejectment suit, and that character alone would have been sufficient to dismiss the suit. Nevertheless, because the litigation had been pending for a long period, the Court deemed it appropriate to resolve the parties’ rights on the assumption that the suit was effectively an action to redeem the usufructuary mortgage, thereby avoiding the need for a separate proceeding. The Court then examined the defence raised by the first defendant, treating the matter as a redemption suit. The counsel for the respondent contended that the respondent had been in possession of the properties as owner since 1923, when the second defendant had sold them to him, and that by that possession he had acquired a prescriptive title, extinguishing the appellant’s right to redeem. The Court noted that it was not disputed that a mortgagee who takes possession of mortgaged property cannot, by a unilateral act, acquire title by adverse possession against the mortgagor, because his possession is deemed to be that of the mortgagor. The Court further explained that the respondent’s argument rested on the proposition that if the mortgagor and mortgagee later entered into a transaction whereby the mortgagee would hold the property not as mortgagee but as owner, such a change in the character of possession could give rise to adverse possession against the mortgagor, even if the transaction were ineffective under law. The Court found this proposition to be well founded. The Court observed that earlier case law had held that a mortgagee could never acquire title by prescription, but that contemporary jurisprudence, as reflected in Kanda Sami Pillai v. Chinnabba (1), recognized that a change in the nature of possession under an agreement with the owner could permit the mortgagee to acquire title by prescription. Accordingly, the Court asked whether such an arrangement existed in the present case. The respondent claimed that the agreement between Rajanna and the two defendants, in which Rajanna received back the sale consideration and made an endorsement cancelling the bale, followed by the sale of the properties by the second defendant to the first defendant, should be sufficient to commence adverse possession. The endorsement of cancellation on the back of the sale deed in favour of

The Court observed that the document dated December 21 1923, executed by Rajanna, was ruled inadmissible as evidence because it had not been registered. Consequently, the inadmissibility meant that no re‑transfer of title from Rajanna to the second defendant could be established, and therefore the family would continue to be deemed the owners. This circumstance explained why the appellant was entitled to redeem under the earlier decision cited as (1920) I.L.R. 44 Mad. 253. However, the endorsement accompanying the sale deed, which the second defendant had taken in favor of the first defendant, was held admissible. The Court referred to Varatha Pillai v. Jeevanathammal (1) to affirm that the endorsement could be used to demonstrate the nature of the first defendant’s possession, and it was found to be clearly adverse to the owners.

The appellant contended that at the time the alleged arrangement was made, Rajanna was a minor, and therefore no title could arise by adverse possession. The Court agreed that if Rajanna had been a minor when he entered into the arrangement, such a fact would not alter the character of the first defendant’s possession as mortgagee. The respondent, on the other hand, argued that adverse possession could, in certain situations, be asserted against a minor and relied upon the authority in Sitharama Raju v. Subba Raju(2). While that proposition was not disputed, the central question for determination was whether possession that was lawful at its inception could become adverse when the underlying arrangement was entered into by a minor.

The Court noted that, under law, a minor lacks the capacity to give consent; consequently, without consent there can be no change in the character of possession, which may occur only by mutual agreement and not by a unilateral act. Accordingly, the decisive issue was whether Rajanna was a minor or a major at the moment the sale deed was cancelled on December 21 1923. The respondent maintained that Rajanna was a major and pointed to evidence on record supporting that claim. The appellant asserted the opposite, stating that Rajanna was a minor at that time and that he remained a minor until his death in 1930. The Court observed that this factual dispute had not been framed as an issue nor had any evidence been adduced on the point.

Given these circumstances, the Court found it appropriate to remand the matter to the Court of District Munsiff for a fresh inquiry into the age of Rajanna at the relevant date. The plaintiff was directed, on remand, to suitably amend the plaint so that the suit would be converted into an action for redemption of the usufructuary mortgage dated 1916. The first defendant would then be required to file his written statement in response. An issue would be framed to determine whether Rajanna was a major when the sale deed was cancelled. The Court indicated that if it were found that he was a major, the first defendant’s subsequent possession would be adverse and, based on the lower courts’ findings, the suit would have to be dismissed as barred by limitation.

In the event that the factual determination concludes that Rajanna was a minor at the relevant time, the Court reasoned that the doctrine of adverse possession could not arise against him. Consequently, the plaintiff would retain the legal right to recover the mortgage that had been created. Because this conclusion negates the basis on which the lower tribunal had rendered its judgment, the decree issued by that tribunal was ordered to be set aside in its entirety. The entire cause was then directed to be sent back to the Court of the District Munsiff so that the matter could be heard anew and decided on the fresh findings concerning the plaintiff’s right to redemption. The remand direction was consistent with the earlier instruction that the suit be reconceived as an action for redemption of the usufructuary mortgage dated 1916 and that the first defendant be permitted to file a written statement in response. The Court further ordered that the expenses and fees that had been incurred by the parties in all of the proceedings before the various Courts would remain allocated in accordance with the final outcome of the case. In other words, the cost liability would follow the result of the remanded proceedings. Finally, the entire case was formally remanded for further disposal by the lower court.