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2003 DIGILAW 1406 (PNJ)

Kharati Lal v. Janak Raj

2003-10-13

M.M.KUMAR

body2003
Judgment 1. This is defendants appeal filed under Sec. 100 of the Code of Civil Procedure, 1908 (for short, the Code) against the concurrent findings of fact recorded by both the Courts below holding that plaintiff-respondent, the mortgagor, is entitled to redeem, the mortgaged property from the defendant-appellant-the mortgagee on payment of a sum of Rs. 11,000/- as is stipulated in the mortgage deed dated 27-4-1989, Exhibit P-l. 2. Brief facts of the case are that plaintiff-respondent filed a suit claiming that he is a mortgagor and had mortgaged with possession the suit property with the defendant-appellant on 27-4-1989 for a sum of Rs. 11,000/-. The mortgage deed was registered on 28-4-1989. The stipulation in the mortgage deed further revealed that the mortgage could be redeemed by the plaintiff-respondent-the mortgagor, at any time he makes the payment of entire mortgage amount to the defendant-appellant-the mortgagee. On 2-11-1996, the plaintiff-respondent issued a legal notice through his counsel to the defendant-appellant offering an amount of Rs. 11,000/- for redeeming the suit property and also requested the defendant-appellant to handover the vacant possession of the suit property to him. However, it is alleged that the defendant-appellant became dishonest and did not wish to handover the vacant possession by accenting Rs. 11,000/- as mortgage amount. 3. The defendant-appellant set up the plea claiming that he was a tenant on the suit property at the rate of Rs. 1300/- per month even before the execution of the mortgage deed. Subsequently, the rate of rent was enhanced to Rs. 1450/-and Rs. 1600/- per month. It has been claimed that the execution of mortgage deed is merely a device to secure the possession of the suit property by filing the present suit. The defendant-appellant has refused to vacate the shop in dispute which caused annoyance to the plaintiff-respondent. In order to show that mortgage deed is a sham transaction, it has been averred that the property in dispute is worth six lacs and the plaintiff-respondent would not ever mortgage such a property for a sum of Rs. 11,000/-. The defendant-appellant has also claimed protection of the Haryana Urban (Control of Rent and Eviction) Act, 1973 (for short, 1973 Act) and as such, no suit is competent. 4. 11,000/-. The defendant-appellant has also claimed protection of the Haryana Urban (Control of Rent and Eviction) Act, 1973 (for short, 1973 Act) and as such, no suit is competent. 4. Both the Courts have found that there was no dispute with regard to execution of mortgage deed dated 28-4-1981, Exhibit P- 1, with possession delivered to the defendant-appellant and that there was an understanding between the parties that the mortgagee-defendant was to vacate the shop on payment of mortgage amount. It has also been concurrently found that the defendant-appellant is not tenant nor the plaintiff-respondent is his landlord. The plaintiff-respondent has been found to be working as a Lineman in the year 1989 and the shop in dispute had fallen to his share from the family property whereas four adjoining shops, left and right, are in occupation and ownership of his brothers. The plaintiff-respondent being an employee of the Haryana State Electricity Board could not be in the business in that shop and needed money to discharge the loan amount he had borrowed from his brother-in-law for which he mortgaged the suit property. The value of the property is not disproportionate to the amount of mortgage amount settled by the plaintiff-respondent with the defendant-appellant. 5. When the Civil Court pronounced the order dated 27-9-2001 by passing a decree in favour of the plaintiff-respondent, it has been alleged by the plaintiff-respondent that there was an agreement between the parties. Accordingly, the defendant-appellant had accepted a sum of Rs. 11,000/- and had handed over the vacant possession to the plaintiff-respondent. A further stipulation has been made in the aforementioned agreement that the defendant-appellant did not wish to continue with the suit because as per the decision, he has accepted the mortgage amount of Rs. 11,000/- and handed over the vacant possession to the plaintiff- respondent. The pending cases were to be withdrawn by both the parties. An FIR No. 536 dated 28-9-2001, Police Station City, Karnal was lodged by the defendant-appellant giving details and levelling allegations that he has been forcibly evicted from the mortgaged property. It has also been alleged that all the goods lying in the shop were dumped outside the shop and were taken away. On behalf of the defendant-appellant, Civil Misc. No. 75-C of 2003 was filed with a prayer for restoration of possession to the defendant-appellant. It has also been alleged that all the goods lying in the shop were dumped outside the shop and were taken away. On behalf of the defendant-appellant, Civil Misc. No. 75-C of 2003 was filed with a prayer for restoration of possession to the defendant-appellant. It has been alleged that the defendant-appellant has been forcibly evicted by the plaintiff-respondent. A similar application was filed before the Additional District Judge and the same was disposed of by passing the following order : "An application for restoration of possession was moved by the appellant-defendant to which a detailed reply has been filed by the other party. It was alleged by the appellant that he was forcibly dispossessed on 27-9-2001 after the passing of the order in the suit in favour of the plaintiff. The material lying in the shop was taken away by the respondent-plaintiff with the help of gundas and the matter was reported to the police. The police visited the shop on the same night at 9 p.m. and locked it in the presence of many persons and ordered the respondent not to enter the shop except with the order of the Court. This part of the averments is not believable because if the incident took place on 27-9-2001, the defendant should have reported the matter immediately but he lodged the first information report on 28-9-2001 in the afternoon. It is also quite strange that the first information report was given to the police on the following day at 2 p.m. but the police was present on the previous night at the shop to lock it. The story appears to be cooked up by the defendant. Since he was apparently not forcibly dispossessed, there is no question of restoration of possession. His application appears to be a device for remaining in possession for which he has no right. The application is, therefore, dismissed." 6. On 25-2-2001 I directed the District and Sessions Judge, Karnal to send a report, as to whether the appellant-defendant has been forcibly dispossessed from the shop in dispute on 27-9-2001 or any time thereafter. The findings were to be recorded after granting opportunity to both the sides. The District and Sessions Judge, Karnal has submitted his report dated 8-4-2003, which has been prepared after giving full opportunity to both sides. The findings were to be recorded after granting opportunity to both the sides. The District and Sessions Judge, Karnal has submitted his report dated 8-4-2003, which has been prepared after giving full opportunity to both sides. The learned District Judge has concluded that agreement dated 27-9-2001 was not ever executed between the parties and the same cannot be accepted as a genuine document. It has further been found that the defendant-appellant was forcibly dispossessed from the shop in dispute on 27-9-2001. 7. Mr. A. L. Jain, learned counsel for the defendant-appellant has argued that there is no finding recorded by the lower appellate Court that the mortgage amount of Rs. 11,000/- was ever paid. He has further pointed out that the mortgage deed dated 27-4-1989 is a sham transaction because the property worth Rs. seven lacs could not ever be mortgaged for a paltry sum of Rs. 11,000/-. In support of his submission, learned counsel has placed reliance on a judgment of this Court in Bakshi Jaswant Singh V/s. Smt. Pushpa Devi, 1988 (93) Pun LR 478 and argued that gullotine rule of excluding the evidence adduced by the defendant-appellant cannot be applied when mortgage deed is proved to be a sham transaction. Learned counsel further urged that once the rent has been paid then the status right of the defendant-appellant would be that of a tenant under the 1973 Act. In support of his submission, learned counsel has placed reliance on a judgment of the Supreme Court in Nirmal Chandra V/s. Vimal Chand, 2001 (2) Rent LR 275 : (AIR 2001 SC 2284). 8. Mr. A. L. Jain has also attacked the decree passed by both the Courts below by arguing that the provisions of Order 34. Rules 7 and 8 of the Code have not been complied with. According to the learned counsel, both the Courts below should have passed a preliminary decree directing the plaintiff-respondent to pay in Court the amount so found or declared due on or before such date as the Court may fix within six months from the date on which it confirms and counter-signs the account taken under clause (a) so on and so forth. According to the learned counsel, both the Courts have failed to perform its statutory duty and no preliminary decree in accordance with Rule 7 of Order 34 has been drawn. According to the learned counsel, both the Courts have failed to perform its statutory duty and no preliminary decree in accordance with Rule 7 of Order 34 has been drawn. Learned counsel has further argued that once payment is made in accordance with the preliminary decree under sub-rule (1) of Rule 7, only thereafter an application is maintainable by the plaintiff-respondent praying for passing of the final decree. If such a decree has already been passed, then an order could be sought directing the defendant-appellant to deliver the mortgage documents and possession. The learned counsel, thus, urged that both the Courts having committed a grave legal irregularity, the judgment and decree are liable to be set aside. He has also urged that in view of the report submitted by the District and Sessions Judge, Karnal, the defendant-appellant should be restored the possession of the shop in dispute. 9. Mr. Shailender Jain, learned counsel for the plaintiff-respondent has argued that concurrent findings recorded by both the Courts below reveal that there was execution of the mortgage deed on 28-4-1989 for consideration of a sum of Rs. 11,000/-. He has further pointed out that on the basis of material evidence, it has been found as a fact that the mortgage is not a sham transaction nor the plaintiff-respondent is an affluent person. According to the learned counsel, there is ample evidence to support the aforementioned findings. He has referred to mortgage deed Exhibit P-1 and statements of various witnesses. On that basis the learned counsel has argued that the findings of facts should not be interfered with under Sec. 100 of the Code and the same are bound to be upheld. 10. On the question of restoration of possession, learned counsel has argued that the version put forward by the defendant- appellant does not inspire any confidence because the plaintiff-respondent has been shifting his stand. He has drawn my attention to para 11 of the judgment of the Additional District Judge where the version of the defendant-appellant has been disbelieved. 11. After hearing learned counsel for the parties, I am of the considered view that under Sec. 60 of the Transfer of Property Act, 1882 (for short, 1882 Act), the plaintiff-respondent has a right to redeem the property from the defendant-appellant on payment or tender at a proper time and place of the mortgage money. 11. After hearing learned counsel for the parties, I am of the considered view that under Sec. 60 of the Transfer of Property Act, 1882 (for short, 1882 Act), the plaintiff-respondent has a right to redeem the property from the defendant-appellant on payment or tender at a proper time and place of the mortgage money. The mortgagor is entitled to require the mortgagee to deliver back to the mortgagor the mortgage deed and all documents relating to mortgaged property which are in his possession in case the possession has been delivered to the mortgagee. Other rights have also been given to the mortgagor under Section 60 of the 1882 Act. Sec. 60 of the 1882 Act reads as under : "60. Right of mortgagor to redeem : 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 mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished Provided that the right conferred by this section has not been extinguished by act of the parties or by decree of a Court. The right conferred by this Section is called a right to redeem and suit to enforce it is called a suit for redemption. Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money." 12. Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money." 12. It is appropriate to notice the provisions of Rules 7 and 8 of Order 34 of the Code on which reliance has also been placed by the counsel for the defendant-appellant, which read as under : "7. Preliminary decree in redemption suit. (1) In a suit for redemption, if the plaintiff succeeds, the Court shall pass a preliminary decree (a) ordering that an account be taken of what was due to the defendant at the date of such decree for (i) principal and interest on the mortgage. Preliminary decree in redemption suit. (1) In a suit for redemption, if the plaintiff succeeds, the Court shall pass a preliminary decree (a) ordering that an account be taken of what was due to the defendant at the date of such decree for (i) principal and interest on the mortgage. (ii) the costs of suit, if any, awarded to him, and (iii) other costs, charges and expenses properly incurred by him up to that date, in respect of his mortgage-security, together with interest thereon; or (b) declaring the amount so due at that date: and (c) directing (i) that, if the plaintiff pays into Court the amount so found or declared due on or before such date as the Court may fix within six months from the date on which the Court confirms and countersigns the account taken under clause (a), or from the date on which such amount is declared in Court under clause (b), as the case may be, and thereafter pays such amount as may be adjudged due in respect of subsequent costs, charges and expenses as provided in Rule 10, together with subsequent interest on such sums respectively as provided in Rule 11, the defendant shall deliver up to the plaintiff, or to such person as the plaintiff appoints, all documents in his possession or power relating to the mortgaged property, and shall, if so required, re-transfer the property to the plaintiff at his cost free from the mortgage and from all encumbrances created by the defendant or any person claiming under him, or, where the defendant claims by derived title, by those under whom he claims, and shall also, if necessary, put the plaintiff fn possession of the property; and (ii) that, if payment of the amount found or declared due under or by the preliminary decree is not made on or before the date so fixed, or the plaintiff fails to pay, within such time as the Court may fix, the amount adjudged due to respect of subsequent costs, charges, expenses and interests, the defendant shall be entitled to apply for a final decree (a) in the case of a mortgage other than a usufructury mortgage, a mortgage by conditional sale, or an anomalous mortgage the terms of which provide for foreclosure only and not for sale, that the mortgaged property be sold, or (b) in the case of a mortgage by conditional sale or such an anomalous mortgage as aforesaid, that the plaintiff be debarred from all rights to redeem the property. (2) The Court may, on good cause shown and upon terms to be fixed by the Court, from time to time, at any time before the passing of a final decree for foreclosure or sale, as the case may be, extend the time fixed for the payment of the amount found or declared due under sub-rule (1) or of the amount adjudged due in respect of subsequent costs, charges expenses and interest. Rule 8. Final decree in redemption suit. (1) where, before a final decree debarring the plaintiff from all rights to redeem the mortgaged property has been passed or before the confirmation of a sale held in pursuance of a final decree passed under subrule (3) of this rule, the plaintiff makes payment into Court of all amounts due from him under sub-rule (1) of Rule 7, the Court shall, on application made by the plaintiff in this behalf, pass a final decree, or, if such decree has been passed, an order (a) ordering the defendant to deliver up the documents referred to in the preliminary decree, and, if necessary, (b) ordering him to re-transfer at the cost of the plaintiff the mortgaged property as directed in the said decree, and, also, if necessary. (c) ordering him to put the plaintiff in possession of the property. (2) Where the mortgaged property or a part thereof has been sold in pursuance of a decree passed under sub-rule (3) of this rule, the Court shall not pass an order under sub-rule (1) of this rule, unless the plaintiff, in addition to the amount mentioned in sub-rule (1), deposits in Court for payment to the purchaser a sum equal to five per cent of the amount of the purchase-money paid into Court by the purchaser. Where such deposit has been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase- money paid into Court by him, together with a sum of equal to five per cent thereof. Where such deposit has been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase- money paid into Court by him, together with a sum of equal to five per cent thereof. (3) Where payment in accordance with sub-rule (1) has not been made, the Court shall, on application made by the defendant in this behalf.- (a) in the case of a mortgage by conditional sale or of such an anomalous mortgage as is hereinbefore referred to in Rule 7, pass a final decree declaring that the plaintiff and all persons claiming under him are debarred from all rights to redeem the mortgaged property and, also, if necessary, ordering the plaintiff to put the defendant in possession of the mortgaged property; or (b) in the case of any other mortgage, not being a usufructuary mortgage, pass a final decree that the mortgaged property or a sufficient part thereof be sold, and the proceeds of the sale (after deduction therefrom of the expenses of the sale) be paid into Court and applied in payment of what is found due to the defendant, and the balance, if any, be paid to the plaintiff or other persons entitled to receive the same." 13 It is well settled that the mortgagee cannot claim any right of tenancy unless it is conferred by any of the stipulations made in the mortgage deed. It is further well settled that such a right of tenancy would continue with a mortgagee if he had any right before the execution of the mortgage deed. In this regard, reliance could be placed on the judgments of the Supreme Court in Mahabir Gope V/s. Harbans Narain Singh, AIR 1952 SC 205 Shah Mathuradas Maganlal & Co. V/s. Nagappa Shankarappa Malage, AIR 1976 SC 1565; Hanumant Kumar Talesara v. Mohan Lai AIR 1988 SC 299, Carona Shoe Co. Ltd. V/s. K. C. Bhaskaran Nair,,AIR 1989 SC 1110, Parameswaran Govindan v. Krishnan Bhaskaran, AIR 1992 SC 1135, Cheriyan Sosamma V/s. Sundaressan Pilial Saraswathy Amma, AIR 1999 SC 947, Mhadagonda Ramgonda Patil V/s. Shripal Balwant Rainade, AIR 1988 SC 1200. , 14. A perusal of the principles laid in the aforementioned does not leave any room for doubt that mortgagee cannot acquire any right except what is given by the mortgage deed or if he has pre-existing rights i.e. prior to the execution of the mortgage deed. , 14. A perusal of the principles laid in the aforementioned does not leave any room for doubt that mortgagee cannot acquire any right except what is given by the mortgage deed or if he has pre-existing rights i.e. prior to the execution of the mortgage deed. When the findings recorded by both Courts below are examined in the light of the principles laid down by the Supreme Court in the aforementioned judgments, it becomes evident that the mortgagor i.e. plaintiff-respondent is entitled to redeem his shop from the mortgagee i.e. defendant-appellant by paying the mortgage amount of Rs. 11,000/-. There is no pre-existing relationship of landlord and tenant nor any such relationship has been conferred by the mortgage deed, Exhibit P- 1 dated 27-4-1989. Even the amount of mortgage has not been found to be disproportionate to the value of the shop mortgaged. These are findings of facts based on cogent evidence and cannot be set aside while exercising jurisdiction under Section 100 of the Code. 15. The argument of the learned counsel for the defendant-appellant that no preliminary decree has been drawn fixing the time for payment of mortgage amount would not require any detail consideration because a perusal of mortgage deed, Exhibit P-l. shows that the nature of mortgage is usufructuary inasmuch as interest and rent has been treated equal. Another stipulation in the mortgage deed is that as and when the mortgagor pays the whole mortgage amount to the mortgagee, the shop in dispute shall be redeemed and till then possession shall be that of mortgagee. Therefore, no time limit would apply to a usufructuary mortgage. I am further of the view that Rule 7(i) (c) (ii) of Order XXXIV of the Code does not apply to a usufructuary mortgage as has been expressly provided by Rule 7(i)(c) (ii)(a) of the Code. Reliance can be placed on a judgment of the Patna High Court in the case Paltan V/s. Jagar, AIR 1974 Patna 276 and another judgment of the Kerala High Court in the case of Pareekutty v. Mariyakutty, AIR 1967 Kerala 236. 16. Reliance can be placed on a judgment of the Patna High Court in the case Paltan V/s. Jagar, AIR 1974 Patna 276 and another judgment of the Kerala High Court in the case of Pareekutty v. Mariyakutty, AIR 1967 Kerala 236. 16. The other argument based on the judgment of this Court in Bakshi Jaswant Singhs case (1988 (93) Pun LR 478) (supra) advanced by the learned counsel for the defendant-appellant is equally devoid any force because in that case there was overwhelming evidence of tenancy and guillotine rule of excluding evidence adduced by the mortgagee was not applied. In the instant case, there is no evidence to prove tenancy or that the mortgage deed was a camouflaged tenancy. By virtue of equating interest with rent, relationship of landlord and tenant would not come into existence. Therefore, the judgment of this Court in Bakshi Jaswant Singhs case (supra) has no application to the facts of the present case. 17. However, the only question which calls for serious consideration is, whether the*mortgagee-appellant is entitled to restoration of possession or he should content himself with fait accompli of having been deprived of his possession forcibly. The report submitted by the learned District Judge, Karnal has recorded a categorical finding that agreement dated 27-9-2001 is a forged document and the defendant-appellant has been forcibly dispossessed. No system of administration of justice could subserve the society, if it cannot protect the law abiding from an anarchist. The plaintiff-appellant has allowed himself the liberty of indulging in indecent hurry which cannot be approved by law or equity. Therefore, while upholding the judgment and decree passed by both the Courts below. I allow Civil Misc. application No. 75-C of 2003 filed by the defendant-appellant directing the plaintiff-respondent to hand over the vacant possession of the shop in dispute to the defendant-appellant within a period of two months from today. The plaintiff-respondent shall deposit the mortgage amount in the executing Court within four months from today. He shall be entitled to take back possession of the shop after four months of the deposit of mortgage amount. The appeal on merits is dismissed and the Civil Misc. application stands disposed of with the directions aforementioned. The defendant-appellant shall be entitled to a cost of Rs. 5000/- which shall be paid by the plaintiff-respondent. Appeal dismissed.