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Smt. Rajamma Vs. Sri. Mahant P. Krishnandagiri Goswamy and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial;Property
CourtKarnataka High Court
Decided On
Case NumberRegular First Appeal No. 36 of 1970
Judge
Reported inAIR1973Kant310; AIR1973Mys310; ILR1973KAR1282; (1973)2MysLJ73
ActsTransfer of Property Act, 1882 - Sections 59; Registration Act, 1908 - Sections 17
AppellantSmt. Rajamma
RespondentSri. Mahant P. Krishnandagiri Goswamy and ors.
Appellant AdvocateB.S. Keshava Iyengar, Adv.
Respondent AdvocatePadubidri Raghavendra Rao, Adv.
DispositionAppeal dismissed
Excerpt:
- code of civil procedure, 1908. order 7, rule 11 & order 7, rule 14 : [arali nagaraj, j] rejection of plaint -omission on part of plaintiff to produce all documents along with plaint - held, same cannot be a ground for rejection of plaint. -- order 7, rule 11(a) or(d): rejection of plaint - averments in plaint disclosed cause of action held, plaint cannot be rejected on ground that any of reliefs claimed by plaintiff in suit cannot be granted unless there is specific bar under law, for entertaining suit itself in respect of reliefs sought for by plaintiff. - we are of the opinion that the said case is clearly distinguishable from the present one......had been advanced under an equitable mortgage created by defendant 1 on 12-11-1965, by sale of the suit property which had been offered as security thereunder, and if necessary by making a personal decree against the other assets of defendant 1. since the suit property had been subsequently sold by defendant 1 in favour of defendant 2, defendant 2 was also impleaded as a party to the suit. defendant 1 died during the pendency of the suit and his legal representatives have been brought on record.2. the case of the plaintiff can be briefly summarised as follows : that on 5-11-1965 defendant 1 approached the plaintiff with a request for a loan of rs. 50,000/-on the security of his property which had been mortgaged in favour of a third party earlier and promised to effect an equitable.....
Judgment:

1. This appeal is filed against the decree passed in the suit, Original Suit No. 27 of 1967 on the file of the Civil Judge, Mysore. The said suit was filed for the recovery of Rs. 50,000 and interest due thereon which had been advanced under an equitable mortgage created by defendant 1 on 12-11-1965, by sale of the suit property which had been offered as security thereunder, and if necessary by making a personal decree against the other assets of defendant 1. Since the suit property had been subsequently sold by defendant 1 in favour of defendant 2, defendant 2 was also Impleaded as a party to the suit. Defendant 1 died during the pendency of the suit and his legal representatives have been brought on record.

2. The case of the plaintiff can be briefly summarised as follows : That on 5-11-1965 defendant 1 approached the plaintiff with a request for a loan of Rs. 50,000/-on the security of his property which had been mortgaged in favour of a third party earlier and promised to effect an equitable mortgage on the said property after securing the title deeds from the earlier mortgagee. The request was contained in a letter dated 5-11-1965 (Ex. P-1). Accordingly on 10-11-1965 the plaintiff advanced a sum of Rupees 50,000/- under two promissory notes (Exhibits P-2 and P-3). That with intent to create an equitable mortgage in favour of the plaintiff in respect of the suit property for securing the said loan of Rs. 50,000/-, defendant 1 deposited the title deeds of the suit property with the plaintiff as stated in his letter dated 12-11-1965 (Ex. P-11). The plaintiff alleged that defendant 1 had paid interest at fifteen per cent, per annum till 10-12-1966 although the stipulated interest was eighteen per cent, per annum. The plaintiff, therefore, filed the suit for recovery of Rs. 50,000/- and interest at fifteen per cent, per annum from 10-12-1966 till date of suit.

3. Defendants i(a) and l(b) who were brought on record as the legal representatives of defendant 1 merely denied the contents of the plaint and put the plaintiff to proof of the same.

4. Defendant 2 raised two principal objections in the written statement, namely, that the mortgage was not supported by consideration and that it was not enforceable for want of registration.

5. The lower Court passed a preliminary decree as prayed for. Aggrieved by the said decree, defendant 2 has filed this appeal.

6. In this appeal Sri B. K. Keshava Iyengar, learned counsel for defendant 2, urged that the plaintiff had not proved that the mortgage was supported by consideration and that the mortgage was unenforceable as Ex. P-11 the letter dated 12-11-1965 relied on by the plaintiff had not been registered. We shall deal with the contentions in the order in which they were urged. (Here the judgment considered the evidence relating to the first contention in paras (7) and (8) and concluded):

We are of opinion that the evidence adduced by the plaintiff is sufficient to hold that he had advanced the sum of Rupees 50,000/- to defendant 1 on 10-11-1965 and that Exs. P-2 and P-3 were executed on that day by defendant 1 in favour of the plaintiff.

9. The next contention is whether the plaintiff is entitled to enforce the mortgage against the suit property. Sri B. S. Keshava Iyengar contended that Exhibit P-11 was intended by the parties to contain all the terms of the bargain and that they intended to rely on Ext. P-11 as the sole repository of the said terms. Hence it was argued that Ext. P-11 which was an unregistered document could not be admitted in evidence and no other evidence also was admissible in proof of the mortgage. The Court below considered the question of admissibility of Ext. P-11 at the time of recording of evidence in the suit and by its order dated 20-7-1968 held that it was admissible. In C. R. P. No. 988/68 filed against the said order, while dismissing the civil revision petition this Court held that the correctness of the order dated 20-7-1968 could be questioned in the appeal filed against the decree passed in the suit. Ext. P-11 read as follows :

'K. V. MOTOR SERVICE

Mail Contractors :

Mysore-Kollegal,

Clock Tower Square.

Proprietor

Mysore

K.V. Satyanarayana Setty.

D/- 12-11-65.

To

Sri. Sri. Mahant P. Krishnananda Giri Goswamy,

Asoka Road, Mysore.

May it please respected Swamiji,

I am indebted to you in respect of a loan of Rupees fifty thousand (Rs. 50,000/-) and interest thereon at 18% per annum on the basis of two on Demand Pronotes executed by me in your favour on 10-11-1965.

With an intention to create an equitable mortgage on my house situated in Nazarabad Mohalla, Zoo-Garden Rd., Mysore, bearing No. 42/6, I have deposited with you today in the city of Mysore the following title deeds relating to my house property.

The property is not subject to any encumbrance.

Description of the title deeds,

(details omitted)

All the 7 deeds are lodged with you today in the city of Mysore with an intention that the deeds shall be security for the debt as mentioned already.

Sh K. V. Sathyanarayana Setty,

12-11-1965.'

10. Before considering the question of admissibility of Ext P-11, it would be useful to refer to the decision of the Supreme Court in United Bank of India Ltd. v. Messrs Lekharam Sonaram and Co., : AIR1965SC1591 in which a similar question arose for consideration. The Supreme Court observed :

'.....When the debtor deposits with the creditor title deeds of his property with an intent to create a security, the law implies a contract between the parties to create a mortgage and no registered instrument is required under Section 59 as in other classes of mortgage. It is essential to bear in mind that the essence of a mortgage by deposit of title deeds is the actual handing over by a borrower to the lender of documents of title to immovable property with the intention that those documents shall constitute a security which will enable the creditor ultimately to recover the money which he has lent. But if the parties choose to reduce the contract to writing, this implication of law is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage. It follows that in such a case the document which constitutes the bargain regarding security requires registration under Section 17 of the Indian Registration Act, 1908, as a non-testamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees and upwards. If a document of this character is not registered it cannot be used in the evidence at all and the transaction itself cannot be proved by oral evidence either.'

11. Applying the above test laid down by the Supreme Court to the case, we feel that the contention of defendant 2 is not tenable. It is clear from Ext. P-1 the letter dated 5-11-1965 that defendant 1 offered to create a mortgage by deposit of title deeds. It was not the intention of the parties that the terms should be reduced into writing. Exhibit P-11 is only a letter which was handed over along with the title deeds and it contains a mere record of the event. It is not shown to contain the terms of the transaction. The fact that it was handed over along with the deeds is not of much consequence. The essential question to be considered is whether the parties really intended that the document alone should constitute the evidence of the transaction. The document Ext. P-11 merely refers to the existence of the pronotes and that the title deeds had been deposited with intent to create an equitable mortgage. The document is largely similar to the one which was considered by the Supreme Court in the United Bank of India's case : AIR1965SC1591 . It is seen that in Deb Dutt Seal v. Ramanlal Phumra, : AIR1970SC659 and V.G. Rao v. Andhra Bank Ltd., : AIR1971SC1613 , the Supreme Court has taken the same view.

12. Sri B.S. Keshava Iyengar however relied upon the decision of the Privy Council in Sir Hari Shankar Paul v. Kedarnath Saha and contended that the writing was of such a character that it required registraiion. We are of the opinion that the said case is clearly distinguishable from the present one. In that case it was clear from the memorandum dated 24th July, 1924 that the parties contemplated from the outset that a document should be executed evidencing the deposit of title deeds, and embodying the terms and conditions of the loan. The subsequent memorandum dated 2nd August, 1924 was found to contain all the essentials of a mortgage transaction. It stated that it was hereby agreed and declared that in consideration of the sums advanced the title deeds should be held as security. It then referred to all the details of the transaction such as conferment of the power to sell the property in the event of default in repayment of the loan. The language of the document did not refer to a completed transaction but the document was operative on its own force. It was contractual in form. Similar characteristics are not to be found in Ext. P-11.

13. In Obla Sundarachariar V. Narayana Ayyar, , a signed memorandum which was delivered to the creditor along with the title deeds stating 'as agreed upon in person, I have delivered to you the under mentioned documents as security' and containing the list of documents so deposited was held to be no more than a mere record of the particulars of the deeds and did not require registration.

14. On a careful consideration of the matter, we feel that the circumstances in which Ext. P-11 was written and delivered and its contents do not lead to the conclusion that the parties intended that the said document should be considered as the sole evidence of the transaction. We hold that Ext. P-11 did not require to be registered. It, therefore, follows that the mortgage was completed by the deposit of title deeds Exhibits P-4 to P-10 with the plaintiff on 12-11-1965. We hold that the plaintiff has proved the mortgage.

15. In the result, we confirm the decree passed by the Court below and dismiss the appeal with costs of the plaintiff-respondent 1 only.


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