‘Once a Mortgage, Always Redeemable’: Punjab & Haryana High Court Overturns 60-Year Ownership Claim Against State
Case Name: State of Haryana and Others v. Partap Singh and Another
Date of Judgment: 20 February 2026
Citation: RSA-1997-2005
Bench: Hon’ble Mr. Justice Virinder Aggarwal
Held: The Punjab and Haryana High Court held that in the case of a usufructuary mortgage where no fixed period is prescribed, the mortgagor’s right of redemption is not extinguished by efflux of time. The principle “once a mortgage, always a mortgage, and therefore always redeemable” squarely applies. A mortgagee in possession cannot perfect title merely because the mortgage remained unredeemed for decades. The State, having inherited the estate by escheat, steps into the shoes of the mortgagor and retains the right to redeem.
Summary: The Regular Second Appeal was filed by the State of Haryana challenging the concurrent judgments of the Courts below which had decreed the suit of Partap Singh, declaring him owner in possession of the suit land on the ground that the mortgage had not been redeemed within the statutory period and, alternatively, that he had perfected title by adverse possession .
The plaintiff had pleaded that he and his predecessor were in possession of the suit land as mortgagees under “Pardesh Sarkar” and that since the mortgagor Budh Ram had died issueless and the State failed to redeem the mortgage within limitation, ownership had vested in him. The Trial Court accepted this plea, holding that the State, upon escheat of the property, inherited not only rights but liabilities of Budh Ram and that the limitation period of thirty years for redemption had expired. The First Appellate Court affirmed these findings .
The State, in second appeal, raised substantial questions of law regarding: (i) whether a usufructuary mortgage without a fixed term can be redeemed at any time; (ii) whether it could be presumed that the mortgage was for a fixed period; and (iii) whether the judgments of the Courts below were based on misreading of evidence .
Answering the first question, the High Court held that the legal position is well settled that in a usufructuary mortgage where no specific period is fixed, the mortgagor retains the right to redeem at any time. Reliance was placed on Ram Kishan v. Sheo Ram and a Full Bench decision reiterating the doctrine that “once a mortgage, always a mortgage” .
On the second question, the Court found no material on record to indicate that the mortgage was created for a fixed term. In absence of such stipulation, it must be treated as a usufructuary mortgage redeemable without extinction of right by limitation .
On the third question, the Court held that the Courts below had misapprehended settled legal principles by declaring the plaintiff absolute owner merely because the mortgage remained unredeemed for over six decades. In law, a mortgagee in possession cannot convert his status into that of owner by efflux of time alone in a usufructuary mortgage. The respondent-plaintiff, therefore, continued only as mortgagee in possession .
It was further noted that upon Budh Ram’s death issueless, the estate mutated in favour of the State on 28.03.1996. The State stepped into the shoes of the mortgagor and retained the lawful right to seek redemption in accordance with law .
Decision: The appeal was partly allowed. The judgments and decrees of the Courts below were modified. The respondent-plaintiff was declared to be a mortgagee in possession, not owner. The State was restrained from interfering with possession except through due process and appropriate redemption proceedings .