1. It has been found that the plaintiff's mortgagor had no title as the sale to him was collusive, but the District Judge has given the plaintiff a decree on the ground that he was a bona fide mortgagee without notice. No issue on this question was raised in the Courts below and we think the parties should have an opportunity of adducing evidence before the issue is disposed of. We must, therefore, ask the District Judge to find whether the plaintiff is a bona fide mortgagee without notice. Fresh evidence may be taken. The finding should be submitted within six weeks and seven days are allowed for filing objections.
2. In compliance with the above order, the District Judge of Kistna submitted the following.
3. The High Court has ordered a finding 'Whether the plaintiff is a bona fide mortgagee without notice' and has ordered that fresh evidence may be taken.
4. Both rides have examined evidence. The plaintiff's side re-calling some of the original plaintiff's witnesses, including plaintiff, the defendant calling plaintiff's 8th witness of the original suit.
5. The evidence is hardly worth the paper it is written on. The plaint witnesses now speak glibly to the fact that as soon as the sale-deed, Exhibit C, had been completed the property was handed over by the purchaser to his maternal uncle for supervision whereas, in the original suit, the witnesses without fail said that the seller, i.e., father-in-law of purchaser, continued to be in possession. This new evidence, is of course, to show the sale was not collusive and that there was every reason for plaintiff to think the sale genuine.
6. Plaintiff, of course, now deposes to having asked all necessary questions at the time of executing the mortgage to satisfy himself that the sale was genuine.
7. The defendant examines the original seller who now deposes that the sale was collusive to avoid the decrees the zemindar had obtained against him. He, however, has held so shamefacedly in the Original as well as in this Court to render his evidence utterly worthless. He is a penniless, broken-down old man and whatever way he stands to gain some trifle he will depose.
8. Section 41 of the Transfer of Property Act the plaintiff relies on to secure the property. The onus of proving that he took all reasonable care to ascertain that the transferor had power to make the transfer, lies on him.
9. As evidence of this care is quoted the document itself by which he cancelled the previous mortgage Exhibit B. He would not, it is argued, have agreed to a fresh mortgage with another person unless he was satisfied the other person had power to mortgage.
10. Then the sale deed, Exhibit C, is taken as evidence in his favour supported as it was he says by plaintiff's 6th witness. One of the attestors, who, he has deposed, told him that all the debts of Nallgangayya were paid by the money from the agreement, i.e., from mortgagor, and plaintiffs' 6th witness had told him that the amount came to Rs. 100 inclusive of the Rs. 23 due to plaintiff on the original mortgage Exhibit B.
11. Plaintiff's 6th witness is a Havildar and, therefore, not an unreliable witness. This witness deposes that the mortgagor, Ramaswamy, remitted the money required by his father-in-law Gangayya from Rangoon and that the amount was Rs. 100 in all.
12. He says also that Gangayya told him he had secured the money and had sold the property to Ramasawmy for his debts to Veeraswamy and others and plaintiff. This witness also attested Exhibit C. I am prepared to accept the man's evidence and I think the plaintiff, on being told by him of the genuineness of the sale, might be considered to have exercised reasonable care if he accepted his word.
13. Plaintiff had already taken mortgage from the father-in-law and the very fact that he gave a fresh one to the son-in-law in place of the former one, after seeing the sale-deed executed between them and after he had been told by prosecution 6th witness that the money had actually been sent from Rangoon in consideration for which the sale-deed was executed, is sufficient, I consider, to bring plaintiff within the protection of Section 41.
14. My finding, therefore, is that plaintiff was a bona fide mortgagee without notice.'
15. This second appeal coming on for final hearing, before the Honourable Mr. Justice Munro and the Honourale Mr. Justice Sankaran Nair, the Court delivered the following.
16. Accepting the finding, we dismiss the second appeal with costs.