No Limitation for Redemption of Usufructuary Mortgage: Punjab & Haryana HC Holds Ownership Cannot Pass by Efflux of Time

Case Name: Mulakh Raj (Deceased) through LRs & Ors. v. Maya Wanti & Ors.

Date of Judgment: April 30, 2026

Citation: RSA No. 2283 of 1997

Bench: Justice Virinder Aggarwal

Held: The High Court held that no limitation is prescribed for redemption of a usufructuary mortgage under Section 62 of the Transfer of Property Act, and ownership cannot be acquired by the mortgagee merely by lapse of time.

Summary: The dispute arose from a usufructuary mortgage created in 1958. The plaintiffs (mortgagees) claimed ownership of the suit property on the ground that the mortgage remained unredeemed for more than 30 years and thus ownership stood transferred to them by efflux of time.

The defendants (mortgagors), on the other hand, contended that the mortgage had been redeemed in 1971. However, the alleged redemption was sought to be proved through an unregistered receipt, which both Courts below held to be inadmissible in evidence as it purported to affect rights in immovable property exceeding ₹100.

The Trial Court and First Appellate Court nonetheless decreed the suit in favour of the plaintiffs, holding that since the mortgage was not redeemed within 30 years, the mortgagees had acquired ownership.

Before the High Court, the central issue was whether a usufructuary mortgage can result in ownership of the mortgagee merely due to lapse of time.

The Court held that even if redemption was not proved, the only consequence is that the mortgage subsists. It does not extinguish the mortgagor’s right nor vest ownership in the mortgagee. Relying on settled law, the Court reiterated that under Section 62 of the Transfer of Property Act, the right of redemption arises only when the mortgage money is satisfied out of rents and profits or otherwise paid.

The Court further held that no limitation period runs against the mortgagor in such cases until the conditions for redemption are fulfilled. Therefore, the concept of acquiring ownership by efflux of 30 years is legally untenable in the context of usufructuary mortgages.

The Court also affirmed that the receipt relied upon to prove redemption was inadmissible due to lack of registration.

Decision: The appeal was allowed. The judgments of the Courts below were set aside, and the suit filed by the plaintiffs claiming ownership was dismissed. The High Court held that the mortgage subsisted and ownership could not pass to the mortgagee merely by lapse of time.