The Supreme Court of India clarified that the right of the usufructuary mortgagor to recover possession of the property commences when mortgage money is paid out of rents and profits or partly out of rents and profits and partly by payment or deposit by mortgagor and not merely on the expiry of thirty (30) years from the date of mortgage.
“While in case of any other mortgage, right to redeem is covered under Section 60, in case of usufructuary mortgage, right to recover possession is dealt with under Section 62 and commences on payment of mortgage money out of the usufructs or partly out of the usufructs and partly on payment or deposit by the mortgagor. This distinction in a usufructuary mortgage and any other mortgage is clearly borne out from provisions of Sections 58, 60 and 62 of the Transfer of Property Act read with Article 61 of the Schedule to the Limitation Act,” a Large Bench of the Court said.
The Court observed, “Usufructuary mortgage cannot be treated at par with any other mortgage, as doing so will defeat the scheme of Section 62 of the Transfer of Property Act and the equity. This right of the usufructuary mortgagor is not only an equitable right, it has statutory recognition under Section 62 of the Transfer of Property Act. There is no principle of law on which this right can be defeated. Any contrary view, which does not take into account the special right of usufructuary mortgagor under Section 62 of the Transfer of Property Act, has to be held to be erroneous on this ground or has to be limited to a mortgage other than a usufructuary mortgage.”