1. The property concerned in this case, a piece of wet land, was mortgaged with possession in favour of the defendant by its former owners under two deeds of mortgage Exs. C dated 13-5-1953 and VII dated 30-6-34, for Rs. 350/- and Rs. 400/- respectively. Later on, under two documents Exs A and XI dated 29-4-41 and 5-4-41, they sold the property to the plaintiff. Subsequently' the plaintiff executed two sale deeds Exs II and III dated 12-5-41 in favour of the defendant by which the defendant's mortgage debt was discharged and the plaintiff received some monies in order to make up the full purchase money. Those two deeds remained unregistered though they were handed over to the defendant. The plaintiff brought a suit in the Court of the Munsiff of Nanjangud for redeeming the defendant in respect of his mortgages and for possession of the property and mesne profits after depositing in Court Rs. 750/- being the mortgage amount due to the defendant in respect of the a'foresaid two mortgages. The defendant relied on his two sale deeds and the consideration receipts which supported them and denied that the plaintiff had any subsisting title to the property to enable him to redeem. The plaintiff in reply stated that he had not executed any sale deeds as alleged and that he had not received any consideration for any such sales. He reiterated what be had said in the plaint that even if his signatures had been taken to some deeds, purporting to be sale, deeds, he had never intended to sell the property in suit to the plaintiff. The Munsiff dismissed the plaintiff's suit, but on appeal the Subordinate Judge reversed that decision and the defendant has come up in second appeal.
2. Both the Courts below have held that Exs II & III and the consideration receipts which go with them viz. Exs. V & VI, are all genuine; and that the story of the plaintiff that they were taken from him by some kind of fraud is not true. They have also found that the plaintiff must have received consideration as recited in those documents. Exs II and III state that the plaintiff has sold parts of the suit survey number comprised in them for Rs. 600/- in each case, and has left Rs. 350/- under Ex II and Rs. 550/- under Ext III with the defendant in full payment of the mortgage debts In' his favour, and has received the balance of Rs, 250/- and Rs. 50/- respectively of the sale price.
They recite further that the whole of the purchase money had thus been received by the plaintiff, that the properties, sold were already in the possession of the defendant and that he may enjoy the same peacefully, paying kandayam. On the facts, therefore, there is no doubt that the plaintiff has sold the property to the defendant, agreeing to the purchase money being 'appropriated towards discharge of the defendant's mortgages, and has received the balance of purchase money. The ground, however, on which the plaintiff claims relief in this suit is that in spite of this, he still continues to be the owner of the property and that the defendant has to redeem him while the defendant relies on Section 53-A, Transfer of 'Property Act, to resist the plaintiff's claim.
3. Section 53-A which gives legislative sanction to the equitable doctrine of 'Part Performance' provides that where any person contracts to transfer for consideration any immovable property by writing, signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract.
4. It was urged for the respondent, and that argument has been accepted by the learned Subordinate Judge, that, in this case, the transferee was already in possession, that he merely continued in possession which was not in part performance of the contract of sale, that he had not done any act in furtherance of that contract and that, therefore, Section 53-A cannot come to his rescue. Mr. Ramadas, learned Counsel for the appellant, has relied on several cases to contend that in a case like the present where a part of the purchase money had been paid by the purchaser under the documents Exs II and III, such payments constituted his doing some act in furtherance of the contract of sale. -- Mathet v. Ma Se Mai', AIR 1934 Rang 304 (A), was a case where the purchaser was already in possession of the property as a mortgagee and then continued to remain in possession after an agreement, to sell had been concluded and a portion of the price had been paid in addition to the amount already due on the mortgage. It was held in that case that such payment was an unequivocal act which could not be referred to any other matters than the agreement of sale and as such it was sufficient to- satisfy the requirement of Section 53-A, that is, that some act must be done in furtherance of the contract.
In'-- 'Gopalan v. E.V. Kanasan', : AIR1953Mad925 (B)., payment described as a demise fee Which had been made under the unregistered document was held sufficient compliance with the requirement of Section 53-A. That was a case where the defendant was already in possession as a lessee. The document referred to an earlier oral demise, admitted receipt of 'kanom' amount of Re. 1/-, and a demise fee of Rs.25/- and proceeded to confer a lease for a period of 12 years under an unregistered document.
Ratanlal v. Kishanlal', (C), was a case very similar to the present. In that case, the plaintiff sued for redemption and the defendant to whom the property had been mortgaged set up an agreement of sale under the terms of which the mortgage debt had been adjusted and some cash was paid to the plaintiff who had agreed to take the balance of purchase money on executing a registered deed of sale. It was held that as the transferee was already in possession as mortgagee and had paid some amount towards the consideration to the transferor he could claim the benefit of Section 53-A and that his suit for redemption was not maintainable.
In -- 'Mohan Lal v. Prithvi Raj', AIR 1954 Ajmer 70 (D), which was a similar case it was observed that in many cases the only act open to the mortgagee or the vendee is the payment of the price if he was already in possession. It was not always possible for the mortgagee or the vendee to make substantial alterations in the building to bring himself within the protection of Section 53-A. If the payment of the money is made in furtherance of the contract there was no reason why it should not be treated as an act in furtherance of the contract, a view with which I entirely agree. It is indeed difficult to see what more a mortgagee in possession who purchases the property and who cannot therefore be put in possession afresh is bound to do in furtherance of the contract of sale other than securing a registered deed of conveyance. And it is exactly in the case of an omission of that kind that Section 53-A applies. The learned Judge who decided that case did not agree with the view to the contrary of Thadani C. J. in -- 'Gopinath Sarma v. Hangeanath Sarma', AIR 1950 Assam 129 (E). In the last mentioned case one of the Judges Ram Labhaya J. took the view that payment of consideration for a transfer could be said to be done as an act in furtherance of the contract.
5. Mr. B.T. Ramaswami, learned Counsel for the Respondent, has relied on -- 'Bharat Chandra Das v. Md. Ramjan Choudhury', 45 Cal WN 489 (F), which has followed an earlier ease in -- 'Bahadur Singh v. Rant Jyotirupa', 40 Cal W. N. 1176 (G). The facts of those cases were different. They related to leases and there was no question of any further payments having been made in pursuance of the agreement to lease as was the ease in : AIR1953Mad925 (B). Moreover, in -- 'Jamadar Singh v. Naiyab All : AIR1941Cal378 , it was found as a question of fact that there was no evidence showing that the defendant continued in possession pursuant to the deed. The defendant, it was observed, had said no such thing in his evidence; he had merely failed to pay rent and that did 'not necessarily mean that he continued in possession in part performance of the contract. ' In 40 Cal W. H. 1176 (G), which was also a case of lease, it was observed that a person who wishes to reply on Section 53-A must show either from, the contract itself or from some other evidence that his continuing in possession was pursuant to or in furtherance of the contract of sale.
6. The learned Subordinate Judge has in his judgment relied on some cases which really do not help the plaintiff. In -- 'Subba Rao v. Matapalli Raju', AIR 1950 F.C. 1 (I), the mortgagee had never been put in possession nor was he allowed to continue to be in possession, actual or constructive and Section 53-A could obviously have no application. In -- 'Ma Shwe Kin v. Ka Hee', AIR 1924 Rang 381 (J), the plaintiff sued to redeem a mortgage with possession. The defence was that the plaintiff and her husband, since deceased, had later on received a further sum of money and orally sold the land to the defendants and it was rightly held that where a mortgage is effected by a registered deed and possession of the mortgaged property was transferred to the mortgagee, the mortgage is not extinguished by an oral sale of right of redemption, nor could the doctrine of part performance be applied to such a case. No doubt, the learned Judges go on further to observe that possession of the property was not delivered under the contract of sale but was already with the mortgagee under the mortgage as an additional reason for his conclusion. This latter observation was really not necessary for a decision in that case as an oral sale cannot attract to itself the provisions of Section 53-A. In -- 'Dakshinamurthi Mudaliar v. Dhanakoti Ammal', AIR 1925 Mad 955 at p. 937 (K), Rame Sam J. has referred to Pry on Specific Performance at page 279 where it has been observed:
'to make the acts of part-performance effective to take the contract out of the Statute oil Frauds, they must be consistent with the contract alleged and also such as cannot be referred to any other title than a contract, nor have been done with any other view or design than to perform a contract....... ........ ......'
and held that as the case was one relating to landlord and tenant all the acts of part performance were explainable as evidence of a willingness to continue the tenancy. In those circumstances, the doctrine of part performance could have no applicability.
7. Prom the above discussion, it is seen that the preponderance of legal opinion is in favour of holding that if a mortgagee purchaser under an unregistered deed of sale has paid either the whole or part of the consideration, the same can be said to be in pursuance of the contract of sale within the meaning of Section 53-A and he can claim the benefit of that section.
8. It was urged by Mr. Ramaswamy that In the present case the mortgagee has not made any endorsement of payment on the mortgage bond, nor has he stated unequivocally by any other document that he is not going to enforce the mortgage deeds against the plaintiff or given up his lien on the mortgaged property. In the written statement filed by the defendant he has nowhere stated that the mortgages are still extant or that he is claiming anything from the mortgaged property or the plaintiff. The endorsement on the mortgage deed might have been necessary if the purchaser was 'different from the mortgagee, and the plaintiff can really have no further interest in the question of discharge or security in the circumstances of this case. If, under the terms of the sale by the plaintiff Jn favour of the defendant by Exs. II and III, the mortgage debt has already been' discharged, there is no further right left in the mortgagor to redeem, as the mortgage debt is no longer subsisting. As has been held in -- 'Nanjundasetty v. Venkatachar AIR 1953 Mys 122 (L), the effect of a mortgagee purchasing property mortgaged to him is, that the mortgage is extinguished as between the mortgagor and mortgagee; the equity of redemption of the mortgagor is lost and he cannot thereafter claim, to redeem the property though the mortgagee may choose to keep it alive for his own defence against a puisne mortgagee. See also -- 'Krishnamurthi v. Krishnarao', AIR 1952 Mys 82 (M), where it has been- held that a receipt given by a mortgagee that a mortgage debt has been satisfied is admissible in proof of the discharge of the mortgage amount and would put an end to the relationship of mortgagor and mortgagee.
9. For the above reasons, I allow this appeal, set aside the judgment and decree of the learned Subordinate Judge and restore those of the learned Munsiff with costs throughout.
10. In the view I have taken, there is no need to consider the cross-objections which are dismissed but without costs.
11. Appeal allowed.