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Vasudev Pandurang Malawade Vs. Basappa Hanumanthappa - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKarnataka High Court
Decided On
Case NumberCRP. 3398 of 1979
Judge
Reported inILR1985KAR546
ActsKarnataka Stamp Act, 1957 - Sections 2(N); Transfer of Property Act - Sections 58 and 59
AppellantVasudev Pandurang Malawade
RespondentBasappa Hanumanthappa
Appellant AdvocateG.D. Shirgurkar, Adv.
Respondent AdvocateSona G. Vakkund, Adv.
DispositionRevision allowed
Excerpt:
.....interest of mortgagor to mortgagee, but, they were cot registered. treating them as mortgage deeds, duty and penalty was directed to be paid, in the suit filed for specific performance to execute mortgage deeds or to refund, the sum paid.;(1). the essential ingredients of a mortgage deed are : (1) the instrument must be for the purpose of securing money advanced or to be advanced by way of loan, or an existing or future debt or the performance of an engagement; (2) one person must transfer or create to, or in favour of another, a right; (3) such right must be over or in respect of a specified property ; and (4) the transfer must be valid in law. the fourth ingredient namely that the transfer must be valid-in law, is not at all present in the case.;(ii) the combined reading of..........plaintiff filed the suit for specific performance calling upon the defendant to execute the two mortgage deeds or in the alternative for refund of rs. 1500/-. an objection was raised that the said two deeds were mortgage deeds and hence the plaintiff should pay the duty and penalty on the footing, that both of them were mortgage deeds. the plaintiff, on the other hand, urged that the deeds were only agreements to execute mortgage deeds. he submitted that the penalty and duty should be collected on the footing that they wereagreements to execute the mortgage deeds. the court-below upheld the objections raised by the defendant and held both the deeds as mortgage deeds and called upon the plaintiff to pay the duty and penalty of rs. 720-70 paise in respect of the two documents.3. learned.....
Judgment:
ORDER

Kulkarni, J.

1. This is a Revision by the plaintiff against the order dated 1-9-1979 passed by the Prl. Munsiff, Hubli, in O.S. 22 of 1976, calling upon the plaintiff to pay duty and penalty of Rs. 720-60 on the two documents.

2. The defendant purported to mortgage the suit house for Rs. 500/-under a document dated 12-6-1975, which reads as :

By a second document, the defendant purports to execute a mortgage in favour of the plaintiff for Rs. 1000/-, which reads as .

The plaintiff filed the suit for specific performance calling upon the defendant to execute the two mortgage deeds or in the alternative for refund of Rs. 1500/-. An objection was raised that the said two deeds were mortgage deeds and hence the plaintiff should pay the duty and penalty on the footing, that both of them were mortgage deeds. The plaintiff, on the other hand, urged that the deeds were only agreements to execute mortgage deeds. He submitted that the penalty and duty should be collected on the footing that they wereagreements to execute the mortgage deeds. The court-below upheld the objections raised by the defendant and held both the deeds as mortgage deeds and called upon the plaintiff to pay the duty and penalty of Rs. 720-70 paise in respect of the two documents.

3. Learned Counsel Shirgurkar for the plaintiff contended that the two deeds in question did not amount to a mortgage within the meaning of Section 2(n) of the Stamp Act and, therefore, the plaintiff was not liable to pay the duty and the penalty on the footing that they were mortgage debts. Section 2(n) of the Karnataka Stamp Act 34/57 reads as :

' 'Mortgage-deed' includes every instrument whereby , for thepurpose of securing money advanced, or to be advanced, by way of loan or an existing or future debt, or the performance of an engagement one person transfers or creates to, or in favour of, another, a right over or in respect of specified property.'

According to the said definition, the essential ingredients of a mortgage deeds are as under;

1) The instrument must be for the purpose of securing money advanced or to be advanced by way of loan, or an existing or future debt or the performance of an engagement ;

2) One person must transfer or create to, or in favour of another, a right ;

3) Such right must be over or in respect of a specified property ; and

4) The transfer must be valid in law'.

Though the first three ingredients mentioned above might be available in the two documents in question, it becomes manifest that the fourth ingredient, namely, that the transfer must be valid in law, is not at all present in the case.According to S. 2(n) of the Stamp Act, the transfer contemplated by the definition of the 'mortgage deed' must be complete in law. S. 59 of the Transfer of Property Act reads, as :

'Where the principal money secured is one hundred rupees or upwards and mortgage other than a mortgage by deposit of title deeds can be effected only by a registered instruments signed by the mortgagor and attested by atleast two witnessess'.

58 of the Transfer of Property Act defines the 'mortgage' as the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to the pecuniary liability. The combined reading of Sections 58 & 59 of the T.P. Act clearly shows that there can be no transfer of interest in immoveable property if the principal moneysecured is more than one hundred rupees, unless the mortgage is effected by a registered instrument signed by the mortgagor and attested by atleast two witnesses. The documents inquestion are not registered instruments. They are no doubt signed by the mortgager and attested by two witnesses. But, for want of registration the documents could not and in fact have not transferred any interest in immoveable property. They might purport to transfer but in fact there has been no legal and valid transfer of any interest in the immoveable property.

4. The madras High Court in Crompton Engineering Co. Madras Ltd. v.-Chief Controlling Revenue Authority, Madras, : AIR1953Mad764 (FB) has held :

'That the transfer contemplated by Section 2(17), Stamp Act is a transfer valid in law, should be obvious. Such a valid transfer would not have been effected under the document dated 22-3-1948, which was neither attested nor registered. Under Section 59, T.P. Act, a valid mortgage can be effected only when the instrument is (1) signed by the mortgagor ; (2) attested by atleast two witnesses ; and (3)registered. Leaving aside the question of registration of an insufficiently stamped document, no one can claim that a document not signed by the mortgagor is an instrument of mortgage liable to bestamped. That the attestation need hot be contemparaneous with the signature of the mortgagor in no way affects the question at issue in this case ; the the document was not attested. The law embodied in Section 59, T.P. Act, necessitates the signature of the mortgagor and the attestation by at least two witnesses in equal degree. To ensure the validity of theinstrument as a mortgage, attestation is made as much a part of the execution as the signature of the mortgagor'.

Further, it has been said by the Madras High Court as :

'The, document certainly purported to transfer the right in the immoveable property among other things, though in law it could not and did not transfer that right'.

It has been further stated :

'To make a document liable to stamp duty as a mortgage deed, it is not enough if the document purports to effect a transfer. It must transfer'.

Thus the Madras High Court held that the question of duty and penalty on such a document does not arise at all.

5. Similar is the view laid down by the Madhya Pradesh High Court in Hatesingh -v.- Kishan, : AIR1973MP172 .

6. Learned Government Pleader Smt. Vakkund submitted that when the two documents purport to transfer the interest of the mortgagor in the property to the mortgagee and when the consideration has passed under both the documents andwhen the possession has been delivered to the mortgagee, they would amount to mortgage deeds and the duty and penalty must be paid. The argument of Learned Counsel Vakkund for the Government stands negatived in view of the said two decisions and also in view of the reasons given by me.

7. In the result, the two documents in question are not liable to be levied duty and penalty on the footing that they are mortgage deeds.

Thus, the order passed by the Court-below is set aside and the revision is allowed. No costs in this revision.


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