This petition under Article 98 of the Constitution seeks to challenge the correctness and legality of an order made by the learned Custodian of Evacuee Property, West Pakistan, on the 5th of December 1962, holding that the property in dispute, namely, agricultural land measuring 75 Kanals and situate in Village Bonga Khan Singh in Tehsil Dipalpur of District Sahiwal, is evacuee property and the petitioners are only entitled to remain in possession until the mortgage amount of Rs, 250 is paid to them by the Deputy Rehabilitation Commissioner, Sahiwal. The relevant facts are that the land was mortgaged by the non Muslim owner with the predecessor-in-interest of the present petitioners by means of a registered mortgage deed dated the 18th of April 1888. The terms of the mortgage included a condition that the land would be redeemed within seven years, but if it is not so redeemed then it shall stand sold to the mortgagee, and thereafter the mortgagor shall have no connection whatsoever with this property. It is stated that the mortgagee entered into possession simultaneously with the execution of the mortgage deed, and he and his successors have remained in continuous possession up-to-date. However, in the year 1959 the land was allotted to certain displaced persons, who are cited as respondents in this petition.
2. On the 9th of September 1959 the petitioners made an application under section 22 of the Pakistan (Administration of Evacuee Property) Act (XII of 1957) for a declaration to the effect that the land in dispute was not evacuee property. This application was, however, rejected by the Deputy Custodian of Evacuee Property by his order dated the 10th of September 1960. He held that in the revenue records the petitioners were shown as mortgagees of the land, but the property had not been sold in their favour under the mortgage deed. He went on to add that "it is a well-known proposition of law that once a mortgage always a mortgage". He further observed that by the year 1947 sixty years had not elapsed and therefore, the right to redeem had not ceased to exist. He concluded by saying that the petitioners were only mortgagees to the extent of Rs, 250 and the property was evacuee property.
3. The petitioners thereupon filed an appeal which was accepted by the learned Additional Custodian by his order dated the 20th of April 1961. The learned Additional Custodian thought that from the date of the mortgage, namely, the 18th of April 1888 to the date of the petitioners' application for declaration under section 22 of Act XII of 1957 a period of 71 years had elapsed, thus showing that the right of redemption stood extinguished. He concluded that the petitioners being in continuous possession of the property for more than the prescribed period of sixty years, had become its owners and, therefore, the property was non-evacuee and belonged to the petitioners.
4. The Rehabilitation Authority presented an application sometime in the year 1962 (exact date not available on the record) for a review of this order. This application came up for consideration before the learned Custodian of Evacuee Property, after having remained pending for some time before two Additional Custodians. The learned Custodian decided to treat the review application as an application for revision of the order made by the Additional Custodian, and accepted the same by his order dated the 5th of December 1962. He observed that in view of the provisions contained in section 5 of Act XII of 1957 anything inconsistent contained in the Limitation Act could not prevail, with the result that the time had stopped running against the Custodian from the 1st of March 1947. As a result, the right to redeem still continued to subsist and, therefore, the petitioners were entitled only to the mortgage amount, and to continue in possession until such time as the amount was paid to them by the Rehabilitation Department.
5. It is contended by Mr. Saeed Hassan, the learned counsel for the petitioners, that : (a)the review/revision petition presented by the Rehabilitation Department was barred by time and could not, therefore, have been considered on merits by the learned Custodian of Evacuee Property ; (b)the mortgage being one by way of conditional sale, the property automatically stood sold to the predecessor-in-interest of the petitioners in the year 1895 as it had not been redeemed within the agreed period of seven years ; (c)the time continued to run against the evacuee mortgagor or his successor-in-interest, namely, the Custodian of Evacuee Property, even after the 1st of March 1947 and, therefore, the right to redeem stood extinguished in 1948 ; (d)in the alternative, the petitioners should be deemed to have been in adverse possession of the property since the 19th of April 1895 which matured into full ownership after the lapse of twelve years ; and
(e) the property not having been treated as evacuee property immediately preceding the first day of January 1957, it could not be so treated in the year 1959.
6. As regards the first contention, it is true that Rule 17 of the Administration of Evacuee Property Rules prescribes a period of thirty days for filing a revision or review petition, but under subsection
(4) of section 43 of the Act the Custodian has the power to suo motu revise at any time an order passed by an officer subordinate to him. In the present case the learned Custodian has clearly acted in the exercise of this power, with the result that in these circumstances no question of limitation arose. The real question in this case is regarding the nature of the transaction relied upon by the petitioners in support of their claim.
7. According to clause (a) of section 58 of the Transfer of Property Act, "a motgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability". The subsequent clauses of this section define the different kinds of mortgages. Clause (c), which is relevant for our present purpose, runs as follows :- "Where the mortgagor ostensibly sells the mortgaged property-- on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgage a mortgage by conditional sale : Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale; ".
8. Section 60 of the same Act spells out the right of redemption in the following terms :- "At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage money, to require the mortgagee (a) to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee, (b) where the morgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor .. .. Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court."
9. It will be seen that the transaction in question in the present proceedings is a mortgage by conditional sale as defined in clause (c) of section 58 reproduced earlier, with the result that in terms of section 60 of the Transfer of Property Act the mortgagor would have the right to redeem the mortgage at any time after the principal money has become due, provided that this right has not been extinguished by the act of the parties or by decree of a Court. Now, in the present case neither of these two circumstances is present. There is no decree of the Court, nor did the parties take any action after the initial execution of the mortgage deed in the year 1888 to extinguish the right of redemption which had come into existence by the very nature of the transaction. The provisions contained in section 60 of the Transfer of Property Act are in the nature of a statutory right to redeem the property in cases where the transaction falls within the definition of a mortgage as spelt out in the various clauses of section 58. Irrespective, therefore, of a stipulation contained in the mortgage deed that if the mortgage is not redeemed within seven years the land will stand sold to the mortgagee, the right of redemption shall continue in view of the statutory provisions specially enacted by the Legislature to keep alive the right of the mortgagor to redeem the property in cases of this kind. Section 60 affirms the right of redemption in all mortgages and thus carries out the recommendations of the Privy Council in Thumbuswamy's case that the Legislature should intervene to recognize a right of redemption in mortgages by conditional sale.
The section, in other words, affirms the maxim "once a mortgage always a mortgage".
10.The doctrine of a clog on redemption is in fact a rule of justice, equity and good conscience.
The right of redemption cannot be controlled by any agreement made as part of the transaction of mortgage itself in view of the clear provision contained in section 60 of the Transfer of Property Act, although after the mortgage the mortgagor may deal as he pleases with his property and so the maxim "once a mortgage always a mortgage" has no reference to agreements subsequent to the mortgage. In support of these propositions one may refer to Faujdar Khan v. Abdul Samad Khan; Ramchandra Kolaji Patil and others v. Han manta Laxman Kadaskar and others Ramji v. Pandharin Nath and others ; K. Ambu Nair v. E. C. Kelu Nair and another ; Mohammad Sher Khan v. Raja Seth Swami Dayal and P. Venkatasubbiah Chetty and others v. The Jumma Mosque Mylapur, Madras.
11.Mr. Saeed Hassan, the learned counsel for the petitioners, however, referred to Framjiby Ramji Minwala and others v. Sulemanji Sheikh Ibrahimji in which it has been held that "in Sind, in the case1 2 3 4 5 6 7 8 of a mortgage by way of condi-tional sale, time is of the essence of the contract, and at the expiry of the term fixed for redemption, the contract executes itself and the transaction closes and becomes one of sale". But it is interesting to note that in the body of the judgment the learned Judges have made the following observations :- "The legislation recommended by the Privy Council in Thumbuswamy's case was undertaken in the Transfer of Property Act which settled the point for Madras in 1882 and for Bombay in 1893. Section 60 of that Act gives a right of redemption to the mortgagor and makes no distinction between one class of mortgage and another. The provisions of this section are not subject to a contract to the contrary and they give a uniform right of redemption in all mortgages, overriding any stipulations confining rights of redemption to a given period. This has been well pointed out in the case of Perayya v. Venkata 11 Mad. 403.
In Bengal and Allahabad and later on in the Punjab the rule once a mortgage always a mortgage was enacted by Bengal Regulation XVII of 1806, and as reference has been made to the case of Balkishen Das and others v. Legge 27 I A 58, I would observe that it was under this Regulation that redemption was there allowed after the fixed period.
But in Sind neither this Regulation nor section 60 of the Transfer of Property Act apply. Nor has there been a course of judicial decisions applying the English rule... ."
12.The learned counsel for the petitioners next referred to Mangwe and others v. Nathahlay in which it was held by the Lower Burma Chief Court that in a mortgage by conditional sale as soon as the specified period had elapsed without the mortgagor exercising his right of redemption, that which was a mortgage in its inception became an absolute sale from the beginning, finally closing the transaction between the parties. Reliance for this view was placed on the observations of the Privy Council in Thumbuswa my's case already referred to. It will be seen that the application of this decision obviously stands excluded in the present case on account of the provisions contained in section 60 of the Transfer of Property Act as brought out in detail in the preceding paragraphs.
13.Reference was also made to Safdar Ali v. Ghulam Mohi-ud-Din and othersand Teja Singh v.
Firm Kalyan Das-Chet Ram and another which contain the observation that although the equitable principles underlying the Transfer of Property Act are allowed in the Punjab, the Act itself, with its technicalities, does not apply. This observation does not, in any manner, benefit the present petitioners for the reason that the rule embodied in the maxim "once a mortgage always a mortgage" is in fact a rule of equity, justice and good conscience and would, therefore, apply to the Punjab even though the e technicalities of the Transfer of Property Act may not apply. As Lord Henley has said in Vernon v. Bethell, "a condition converting a mortgage into a sale is invalid as a clog on the equity of redemption. This Court, as a Court of conscience, is very jealous of persons taking securities for a loan and converting such securities into purchases. And therefore I take it to be an established rule, that a mortgagee can never provide at the time of making the loan for any event or condition on which the equity of redemption shall be discharged and the conveyance made absolute. And there is great reason and justice in this rule, for necessitous men are not, truly speaking, free men, but to answer a present exigency, will submit to any terms that the crafty may impose upon them".
14.In view of the principles and the statutory provisions mentioned above, it is clear that the transaction entered into between the non-Muslim mortgagor and the predecessor-in--interest of the present petitioners in the year 1888 being a mortgage by conditional sale, the right of redemption continued to subsist even after the expiry of the prescribed period of seven years. The mortage could, therefore, be redeemed any time within the period of limitation as prescribed by Article 148 of the Limitation Act.
15.On this view of the matter, no question arises of the mortgagee or his successors-in-interest being in adverse possession of the property since 1895. The mortgagee entered into permissive9 10 11 12 possession under a mortgage deed and he would continue to retain that character until the mortgage is redeemed, or the right to redeem is extinguished by lapse of time.
16.The next question, therefore, is whether in this case the right to redeem stood extinguished when the matter was taken up by the Custodian authorities. It will be recalled that for the first time the land was allotted by the Rehabilitation/Settlement authorities to displaced persons in the year 1959, and it was as a consequence thereof that on the 9th of September 1959 the petitioners made an application under section 22 of Act XII of 1957 for a declaration regarding the non-evacuee character of the property. In other words, as far as the Custodian and Rehabilitation authorities were concerned, no action to redeem the property or otherwise deal with it as evacuee property was taken until after the expiry of 71 years since the mortgage was entered into in the year 1888.
17.The first legislation dealing with evacuee property was the Pakistan (Administration or Evacuee Property) Ordinance, 1949 (XV of 1949), the relevant provisions of which have been substantially repeated in Act XII of 1957. As in the present case the period of sixty years allowed for the redemption of the mortgage was to expire in 1948, it would be well to refer to Ordinance XV of 1949, which was given retrospective effect, rather than to the subsequent legislation, in order to ascertain the correct legal position. Clause (2) of section 2 of the Ordinance defines an evacuee as, inter alia, meaning "any person who, on account of the setting up of the Dominions of Pakistan and India, or on account of civil disturbances, or the fear of such disturbances, on or after the first day of March 1947, leaves or has left any place in the territories now comprising Pakistan for any place outside those territories". The term "evacuee property" is defined in clause (3) of the same section as meaning, inter alia "any property in which an evacuee has any right or interest (whether personally or as a trustee or a beneficiary or in any other capacity)". The operative date in both these definitions is the first day of March 1947. From these definitions it becomes abundantly clear that the equity of redemption in the present case had become evacuee property since the first day of March 1947, and had vested in the Custodian of Evacuee Property from that day under section 6 of the Ordinance (corresponding to section 7 of Act XII of 1957). Section 7 of the Ordinance (corresponding to section 10 of the Act) provides that every person who is, or has at any time after the twenty-eighth day of February 1947, been in possession, supervision or management of any evacuee property, shall be deemed to hold or to have held, as the case may be, such property on behalf of the Custodian. Then comes section 12 of the Ordinance (corresponding to section 16 of the Act), which grants to evacuee property exemption from all legal process by declaring that "property which has vested in, or of which possession has been taken by, the Custodian shall be exempt from all legal process, including seizure, distress, ejectment, attachment or sale by any officer of a Court or any other authority and no injunction or other order of whatever kind in respect of such property shall be granted or made by any Court or any other authority". Subsection (2) of section 12 of the Ordinance enjoins that "upon the commencement of this Ordinance, any such legal process as aforesaid subsisting immediately before such commencement shall cease to have effect, and all evacuee property in custody of any Court, or Receiver, guardian or other officer or person appointed by it, shall, upon delivery of the same being called for by the Custodian, be delivered to the Custodian".
18. The cumulative effect of the provisions mentioned in the preceding paragraph is that from the first day of March 1947 the interest of the evacuee owner vested in the Custodian by operation of law, and evacuee property so vested became immune from all legal process of any kind. Anyone holding the property or being in its possession was to be deemed to be doing so on behalf of the Custodian of Evacuee Property. At this stage we might take note of section 4 of the Ordinance (corresponding to section 5 of the Act) which lays down that "the provisions of this Ordinance, and any rule or order made thereunder, shall have effect notwithstanding anything inconsistent herewith contained in any other law for the time being in force, or in any instrument having effect by virtue of such law". It will be seen that the obvious intention of this sweeping provision is that once the property has vested in the Custodian of Evacuee Property then it shall not be taken away from him or his control by the operation of any other law for the time being in force. And this would include section 28 of the Limitation Act as well which contemplates extinguishment of the right to property at the determination of the period of limitation. Any other position would have been simply impossible, as the Custodian of Evacuee Property could not be expected to acquire knowledge of time in the various legal obligations which the non-Muslim evacuee owners numbering several millions had already incurred or were liable to incur with the passage of time.
The Legislature, therefore, in its wisdom, chose to freeze the respective rights of the parties as they existed on a certain specified day, namely, the first day of March 1947. On this view of the matter it follows that time ceased to run against the Custodian from the 1st of March 1947 and, therefore, the questions of limitation has to be decided in such cases with reference to this date and not to any subsequent date on which action may in fact be initiated by the Custodian/Rehabilitation authorities. On the 1st of March 1947 the right to redeem was clearly in subsistence in the instant case.
19. The learned counsel for the petitioners, however, contended that it has been held by this Court in at least two cases that the powers of the Custodian and the rights acquired by him in respect of evacuee property are subject to the ordinary law and, therefore, time would continue to run against the Custodian as it would have against the non-Muslim evacuee owner, had he continued to remain in Pakistan. The first case mentioned by Mr. Saeed Hassan is Muzaffar Ali Jaffery and another v. The Custodian of Evacuee Property, Karachi, and another in which the learned Custodian, while acting under section 16 of the Ordinance, had refused to confirm a sale on the ground of inadequacy of consideration. The Court found that as a matter of law it was not open to the parties in that case to effect the sale for a higher consideration than what was the declared value of the construction appearing from the Corporation records and, therefore, the Custodian had proceeded to withhold confirmation of the transaction on a ground which was legally untenable and thus he exceeded his jurisdiction in refusing to confirm the sale. The learned Judges went on to observe that "the provisions of section 5 of Act XII of 1957 were obviously intended to protect evacuee property against the effect of transactions that may have been entered into after the 1st of March 1947. The provisions of the Act have been given retrospective effect for certain purposes from that date. The object could not be that the restrictions to which the property was subject when it was in the possession of the original owner, who is now an evacuee, were abrogated wholesale". It will be seen that the learned Judges in this case were concerned with ascertaining as to what rights had accrued to the original owner at the time he became an evacuee, and they held that the Custodian did not acquire any superior rights as compared to the original owner. However, this decision cannot, in any manner, be construed as laying down that the rights which had thus accrued to the Custodian or had vested in him by operation of law, could be subsequently abridged or abrogated by the operation of any other law for the time being in force.
It is clear that the question before their Lord-ships was entirely different from the one which has arisen in the present case.
20.The second case relied upon by the learned counsel for the petitioners is Malik Amir Muhammad Khan, Nawab of Kala Bagh v. The Custodian, West Pakistan and another. Here again the learned Judges were concerned with the determination of the nature of the rights that had become evacuee property, and they held that "before a right can be declared to be evacuee property, it should satisfy the condition that it is property". The question before them was whether the right to residence given to non-Muslim non-proprietors in villages which now form part of Pakistan could be treated as evacuee property if the non-Muslims had left the property voluntarily.
The learned Judges held that section 8 of Act XII of 1957 was not intended to apply to those rights13 14 which would come to an end at any moment or at a specified time. They also observed that section 5 of the Act did not mean that a person who became an evacuee would be deemed to have left behind more rights than he would have had if he had not become an evacuee. I am in respectful agreement with these observations, but consider that they have no relevance at all to the question of limitation with which we are concerned in the present case. The determination of the nature of the rights that are to be treated as evacuee property for the purpose of vesting in the Custodian is a question distinct and different from the question whether such rights can be subsequently affected or modified by the operation of any other law after the 1st of March 1947.
Both the cases cited by Mr. Saeed Hassan are silent on this question.
21.The learned counsel also drew my attention to Muhammad Moin Khan v. The Chief Settlement Commissioner etc.. This case, however, deals with an entirely different question, namely, the power of the Custodian to impose certain additional terms and conditions on a lessee while confirming his lease under section 16(4) of the Ordinance.
22.I now take up the last contention raised by Mr. Saeed Hassan to the effect that the petitioners are protected by section 3 of Act XII of 1957, which lays down that property not treated as evacuee property immediately preceding the first day of January 1957 shall not be treated as such after that date. The first point to be noticed in this behalf is that this contention was not raised before any of the Custodian authorities, who proceeded on the undoubted assumption that the equity of redemption was evacuee property and the only question was whether the property could be redeemed or not after the expiry of sixty years. On this short ground alone, I would be justified in refusing to consider this plea which has been raised in the High Court for the first time.
23.Even otherwise, the contention is entirely misconceived. The present is not a case of the property in dispute being treated as evacuee property for the first time after the 1st of January 1957.
On the facts presented by the petitioners themselves the property was undoubtedly evacuee property by definition and the rights of the non-Muslim mortgagor had vested in the Custodian of Evacuee Property. The only question, therefore, which arose in this case was whether the property could be redeemed after the expiry of sixty years. There is no attempt in this case to treat the rights of the petitioners as evacuee property and, therefore, no occasion arises for them to invoke the protection of section 3 of the Act. Their rights as mortgagees are definitely non-evacuee property and they remain as such, subject to the right of redemption which has vested in the Custodian.
24. For the foregoing reasons, it is clear that the transaction entered into between the non-Muslim owner and the predecessorin-interest of the present petitioners was a mortgage by conditional sale, which could be redeemed at any time within the period of limitation which was to expire in April 1948 ; but before that date the right of redemption became evacuee property with effect from the 1st of March 1947. As a necessary consequence, the period of limitation ceased to run against the Custodian in view of several provisions contained in the legislation relating to administration of evacuee property and, therefore, it was open to the Custodian to order redemption at any time on the payment of the mortgage amount. The exercise of this right of redemption is not hit, in any manner, by the protection contained in section 3 of the Act. The petition, therefore, fails and is hereby dismissed. In view of the legal questions involved, the parties are left to bear their own costs. 2 I A 241 5 L L J 394 58 I C 45 43 I L R Bom. 334 123 I C 584 49 I A 6015 1 2 3 4 5 6 1941 M W N 532 19 I C 428 27 I C 868 1915 P R 103 91 I C 778 (1762) 1 Eden 113 PLD 1958 Kar. 307 PLD 1963 Lah. 189 PLD 1961 SC 436