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Nagalinga Nadar Vs. K. Mehrunisa Begum and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai High Court
Decided On
Reported in(1980)2MLJ534
AppellantNagalinga Nadar
RespondentK. Mehrunisa Begum and anr.
Cases ReferredK. J. Nathan v. S.V. Maruthi Rao and Ors.
Excerpt:
- v. ratnam, j.1. the 2nd defendant in o.s. no. 116 of 1973, sub court, vellore, is the appellant in this appeal. the 1st respondent, figuring as the plaintiff, sued the appellant and the 2nd respondent for the recovery of a sum of rs. 24,228 on a simple mortgage, dated 17th january, 1966 with subsequent interest or in the alternative for a money decree for a like sum against the 2nd respondent herein. according to the case of the plaintiff, she and the 1st defendant in the suit are related as brother and sister and in a partition suit, regarding the estate of their father, in o.s. no. 99 of 1953, sub court, vellore, the suit property, among other items, was allotted to the share of her brother in 1. a. no. 1313 of 1954 in o.s. no. 99 of 1953. having thus obtained the property, the 1st.....
Judgment:

V. Ratnam, J.

1. The 2nd defendant in O.S. No. 116 of 1973, Sub Court, Vellore, is the appellant in this Appeal. The 1st respondent, figuring as the plaintiff, sued the appellant and the 2nd respondent for the recovery of a sum of Rs. 24,228 on a simple mortgage, dated 17th January, 1966 with subsequent interest or in the alternative for a money decree for a like sum against the 2nd respondent herein. According to the case of the plaintiff, she and the 1st defendant in the suit are related as brother and sister and in a partition suit, regarding the estate of their father, in O.S. No. 99 of 1953, Sub Court, Vellore, the suit property, among other items, was allotted to the share of her brother in 1. A. No. 1313 of 1954 in O.S. No. 99 of 1953. Having thus obtained the property, the 1st defendant, according to the plaintiff borrowed a sum of Rs. 13,000 on the security of the suit property and executed a registered mortgage deed dated 17th January, 1966. The consideration of Rs. 13,000 was paid by Anwar Sanib on behalf of the plaintiff and received by the 1st defendant in the presence of the Sub Registrar at the time of the registration of the document on 20th January, 1966. The plaintiff claimed that though the 1st defendant executed the mortgage deed on 17th January, 1966, agreeing to repay the sum of Rs. 13,000 with interest thereon at 12 per cent per annum on the security of the property, he had not paid any amount either towards principal or interest in spite of repeated demands. The 1st defendant, according to the plaintiff was not entitled to the benefits of the Agriculturists Relief Act and therefore, the plaintiff is entitled to claim the stipulated interest of 12 par cent per annum. The plaintiff further averred that the total amount thus due will be Rs. 24,228. The 2nd defendant in the suit, according to the plaintiff, is a purchaser of the mortgaged property under the sale deed, dated 10th January, 1973, and was impleaded as the purchaser of the hypotheca as he is bound to discharge the mortgage debt from out of the property purchased by him The plaintiff issued a notice on 18th February, 1973, calling upon defendants 1 and 2 to pay the mortgage amount to which a reply was sent by the 1st defendant on 9th March, 1973 denying the mortgage and stating that he has been tricked into putting his signature in the document and that the mortgage deed was neither executed nor attested nor did any consideration pass thereunder. A reply, dated 26th March, 1973, was sent on behalf of the 2nd defendant stating that there was no mortgage over the suit property and his purchase was free from mortgage. The plaintiff characterised the stand taken by the defendants 1 and 2 as fraudulent and mischievous and reiterated in a rejoinder the execution of the mortgage by the 1st defendant and the passing of consideration thereunder as well as the liability of the 2nd defendant as a purchaser to clear off the mortgage liability. The further case of the plaintiff was that only that property which was given to the 1st defendant as per the allotment in I. A No. 1313 of 1954 in O.S. No. 92 of 1953, Sub Court, Vellore, in Arcot Road was mortgaged and it was clearly intended both by the plaintiff and the 1st defendant that the property described by the boundaries was intended to be mortgaged as the security for the loan of Rs. 13,000 and the interest thereon The plaintiff averred that after the receipt of the reply notice it was found out that the municipal door number of the hypotheca had been given by mistake as door No 72, Arcot Road, when the correct door No. is 73, and the said mistake in the doorway will not affect the mortgage in favour of the plaintiff as the boundaries of the hypotheca will take only the property bearing door No. 73 and the door No. 72 was the property of the plaintiff herself. This error in the description of the door number, according to the plaintiff, will not matter and that she is, therefore, entitled to have a mortgage decree over the suit pro-party whose correct and real door No is 73, Arcot Road Alternatively, the plaintiff also prayed that if for some reason the Court were to hold that the door No. 73, Arcot Road is not the subject-matter of the mortgage, then she will be entitled to a money decree as against the 1st defendant since the door No. 72 had been written in the deed owing to mistake. Under the aforesaid circumstances, the plaintiff prayed for a decree directing the defendants to pay the plaintiff the sum of Rs. 24, 228 and future interest and in default of such payment, directing the sale of the suit property for the suit amount and further that in case the sale proceeds are not sufficient to satisfy the suit claim, then to proceed against the first defendant personally for the balance or in the alternative directing the 1st defendant to pay the suit amount with costs to the plaintiff and granting such other reliefs as may be necessary.

2. The 1st defendant in the suit filed a written statement admitting the relationship between the plaintiff and himself and the Court proceedings in I. A No. 1313 of 1954 in O.S. No 99 of 19.53 and the allotment of the properties in the said suit. The borrowing by him from the plaintiff and the execution of the mortgage deed on 17th January, 1966, was denied by him. He claimed that he was tricked into putting his signature in the document and therefore, no liability would arise under the mortgage document. It was also the case of the 1st defendant that no payment was also made before the Sub-Registrar as claimed by the plaintiff. The 1st defendant pleaded that the property alleged to have been mortgaged is not the mortgaged property and that there is no valid and eaforceable mortgage and the claim for the recovery of money is not sustainable. A plea of limitation with reference to the money decree claimed by the plaintiff was also raised.

3. The second defendant in his written statement stated that the property purchased by him was allotted to the 1st defendant in the Court proceedings and not the property described in the plaint schedule. He claimed to have obtained an encumbrance certificate with reference to the property purchased by him and that he was not in a position to see any encumbrance in favour of the plaintiff The mortgage sued upon, according to the 2nd defendant, was a fabricated one and that he is a bona fide purchaser for value in good faith and therefore, he is not in any manner concerned with any debt and that the property purchased by him cannot be made liable for the claim of the plaintiff as against the 1st defendant. On these grounds, defendants 1 and 2 prayed for the dismissal of the suit.

4. The learned Subordinate Judge, Vellore, framed the following issues for trial:

1. Whether the mortgage is true and supported by consideration?

2. Whether the 1st defendant was a minor when the mortgage was executed?

3. Whether the claim for money decree is in time?

4. What are the properties mortgaged?

5. To what relief, if any, is the plaintiff entitled?

5. Accepting the evidence of P. W. I, the scribe of the mortgage document, Exhibit A-1, dated 17th January, 1966, and relying on the admission of the 1st defendant examined as D. W 1 with reference to his signing Exhibit A-1 and the registration thereof, the learned Subordinate Judge held on issue No 1 that Exhibit A-1 had been duly executed by the 1st defendant and attested. Referring to the payment of consideration of Rs. 13,000 endorsed by the Sub-Registrar on Exhibit A-1, it was held that it was difficult to believe the case of the 1st defendant that the money was taken away by his brother Anwar and therefore, the mortgage deed Exhibit A-1 is also fully supported by consideration. On issue No 2, it was found that the 1st defendant was not a minor on the date of the mortgage deed. Exhibit A-1 dated 17th January, 1966. On issue No. 4 the learned Subordinate Judge found that the boundaries of the property mortgaged were all clearly set out and that it was the intention of both the parties that the property within those boundaries bearing door No. 73, Arcot Road, should be the security for the mortgage and therefore, the mention of the wrong door No. 72 does not affect the right of the plaintiff to proceed against that property as security. In view of the finding recorded on issue No 4, the learned Subordinate Judge held that there is no need to grant the plaintiff the alternative relief of money decree against the 1st defendant. In the result a preliminary mortgage decree as against defendants 1 and 2 was granted as prayed for giving six months time for payment.

6. Before proceeding to consider the submissions made on either side in this appeal at the instance of the second defendant, it is necessary to set out certain facts which are do longer in dispute. In paragraph 8 of her plaint, the first respondent had clearly stated that door No. 72, Arcot Road, Vellore, is her own property and it has not been in any manner traversed in the written statement and before us also, it is not disputed that door No. 72, Arcot Road, Vellore, belongs to the first respondent. Further, in order to ascertain the correct door number of the property mortgaged by the second respondent in favour of the first respondent with reference to the boundary descriptions contained in the mortgage deed, Exhibit A-1, dated 17th January, 1966, an Advocate-Commissioner was deputed by this Court and he has also submitted a report after making a local inspection. With reference to the boundaries actually noticed by him on ground in relation to door Nos. 72 as well as 73, Arcot Road, Vellore he has submitted a report to the effect that the property referred to in Exhibit A-1, dated 17th January, 1966 is door No. 73, Arcot Road, Vellore. No objection has been taken by the appellant to this finding of the Commissioner. Indeed, the learned Counsel for the appellant proceeded to argue the appeal on the footing that the appellant is the purchaser of only door No. 73, Arcot Road, Vellore. We therefore, proceed to consider the arguments on either side on the case that what was mortgaged by the second respondent in favour of the first respondent under Exhibit A-1, dated 17th January, 1966, and what was purchased by the appellant from the second respondent under a deed of sale, dated 10th January, 1973, refer to only door No. 73, Arcot Road, Vellore.

7. During the course of the trial, the appellant did not file the sale deed, dated 10th January, 1973, executed by the second respondent and the encumbrance certificate stated to have been obtained by him prior to the purchase of the property from the second respondent. In this appeal, in C.M.P. No. 9319 of 1978, the appellant has sought permission to file the original of the registered sale deed, dated 10th January, 1973, executed by the second respondent in favour of the appellant and also the encumbrance certificate, dated 2nd October, 1972. In paragraph 3 of the affidavit in support of that application, the appellant had stated that the documents were mislaid and that the learned Subordinate Judge, Vellore who tried the suit, did not grant an adjournment for producing these documents and therefore, they could not be filed even at the trial stage. Inasmuch as the sale in favour of the appellant by the second respondent and the obtaining of an encumbrance certificate by the appellant before the sale have not been seriously disputed by the first respondent herein. we are inclined to feel that the admission of the two documents referred to above are not only necessary, but essential for the purpose of enabling this Court to pronounce judgment with reference to the controversy between the parties and for doing substantial justice. In addition, we are also satisfied that even after exercising due diligence, the documents now sought to be produced as additional evidence could not be produced by the appellant at the time when the decree appealed against had been passed against him. Hence C.M.P. No. 9319 of 1978 is therefore, ordered and the registered sale deed, dated, 10th January, 1973 executed by the second respondent herein in favour of the appellant is marked as Exhibit B-1 and the encumbrance certificate, dated 2nd October, 1972. is marked as Exhibit B-2.

8. The learned Counsel for the appellant contends that be is a bona fide purchaser of the mortgaged property from the second respondent for consideration, after having obtained an encumbrance certificate, which did not disclose the mortgage executed by the second respondent in favour of the first, respondent and sued upon and therefore, he should be protected. The further contention of the learned Counsel for the appellant is that he is an innocent purchaser of the property without having any reason to believe that the mortgage sued upon existed over the property and the first respondent, having held out that a mortgage subsisted on door No. 72, Arcot Road, Vellore, cannot turn round and say that the mortgage is with reference to door No. 73, Arcot Road, Vellore purchased by him and therefore, the first respondent is estopped from so doing. In addition, the learned Counsel for the appellant contends that the first respondent, who is acquainted with all the facts and circumstances had not been examined and that there was not even an issue with reference to the bona fide nature of the purchase of the property by the appellant and he would therefore, submit that the matter should be sent back to the trial Court for proper consideration after, framing the necessary issues.

9. On the other hand, the learned Counsel for the first respondent contends that there is no question of any bona fides on the part of the appellant. Further, he would contend that even though the appellant was the purchaser of the mortgaged property, yet the mortgage executed by the second respondent in favour of the first respondent would still be binding upon the appellant and he cannot, in any manner, seek to avoid his liability to discharge the mortgage. The learned Counsel for the first respondent submitted that the appellant had not been in any manner misled by the encumbrance certificate, because the encumbrance with reference to the mortgage, Exhibit A-1 dated 17th January, 1966, executed by the second respondent in favour of the first respondent had been entered in the proper book, viz., Book I maintained as per Section 57 of the Indian Registration Act with the correct boundaries and that the appellant had applied for an encumbrance certificate with reference to some other property and not with reference to the property covered by the boundaries in Exhibit A-1 and therefore, if the encumbrance certificate did not disclose the mortgage executed by the second respondent in favour of the first respondent with reference to door No. 73, Arcot Road, Vellore, the appellant will have to thank himself. The further submission of the learned Counsel for the first respondent is that the appellant was not a bona fide purchaser at all, but only a speculative purchaser and that Section 48 of the Transfer of Property Act would apply to regulate the rights of the parties and therefore, the mortgage would be binding on the appellant and he cannot seek to avoid the liability on the mortgage by claiming that he is a bona fide purchaser. No question of estoppel would arise according to the learned Counsel for the first respondent and as no prejudice was caused to the appellant, who contested the case, being fully aware of the same, there was no need for a remit order after framing the necessary issue.

10. In support of his case that the appellant was an innocent person and that whenever one or two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss must sustain it, the learned Counsel for the appellant invited our attention to the decision in Commonwealth Trust Limited v. Akotey (1926) A.C. 72. The principle laid down in that case is unexceptionable, but the question that has to be considered is whether that principle could be availed of by the appellant and whether the appellant was so innocent that he should not be permitted to suffer. Whether the first respondent had in any manner enabled the appellant to occasion that loss and therefore, she must sustain it has to be adverted to as well. It is not disputed that the mortgage, Exhibit A-1 dated 17th January, 1966, executed by the second respondent in favour of the first respondent for a sum of Rs. 13,000 has been entered in the proper books maintained for that purpose by the registration authorities, viz., Book I. A perusal of that document also shows that the entire consideration of Rs. 13,000 had been paid before the Sub-Registrar at the time of registration and has also been endorsed on that document. It is not therefore, possible for the appellant to contend that the document is not supported by consideration. Nothing has been attributed by the appellant to the first respondent to establish that the first respondent had in some manner enabled the appellant to occasion the loss. The property mortgaged is described as situate in Arcot Road, Vellore. The boundaries given are the following:

South of Arcot Road and C.M.C. Hospital, West of the building of Mehrunnissa, east of the building of Anwar Basha and north of backyard of Mehrunnissa Bi's building and the mortgaged building.

The encumbrance certificate Exhibit B-2, applied for, relates to a property comprised within the boundaries--South of road, west of Mehrunnissa Begum's building, east of Noorulla Basha's building and north of Elias Soap Factory building. A comparison of the aforesaid boundary descriptions discloses that two boundaries, viz., southern and western boundaries in Exhibit B-2 do not tally at all. The Commissioner in his report in paragraph 12 also refers to this variation of boundaries on ground as well as in measurement. Rule 140 of the Rules framed under the Registration Act provides that a request for a certificate of encumbrance shall be complied with in the prescribed form in Appendix VII. Appendix VII states that the description of the property should be entered as given in the document. It is clear from the description of the properties referred to above that the application for the encumbrance certificate. Exhibit B-2 was defectively and incorrectly made by the appellant and did not relate to the mortgaged property at all. The encumbrance certificate did not therefore, disclose the subsistence of the mortgage, executed by the second respondent in favour of the first respondent. In the face of this, it is futile for the appellant to claim that he is an innocent person entitled to invoke the benefit of the rule in Commonwealth Trust Limited v. Akotey (1926) A.C. 72. Really, it is the first respondent who is the innocent person having taken a mortgage from the second respondent with reference to the property which was allotted to the second respondent in I.A. No. 1313 of 1954 in O.S. No. 99 of 1953, Sub-Court, Vellore, and having parted with a sum of Rs. 13,000 towards consideration thereunder. Therefore, the learned Counsel for the appellant cannot press into service the decision in Commonwealth Trust Limited v. Akotey (1926) A.C. 72, in favour of the appellant.

11. It must be further pointed out that it was the duty of the appellant to have made an inspection of Book I as provided for under Section 57 of the Registration Act and also to have obtained a nominal index with reference to the transactions entered into by the second respondent in relation to the mortgaged property, especially when the transaction under Exhibit A-1 has been entered in the proper book, viz., Book I. Having failed to do so, it is not open to the appellant to claim merely on the strength of an encumbrance certificate, Exhibit B-2 obtained by giving incorrect boundaries that he is a bona fide purchaser for value without notice. The appellant has to blame himself for not having taken necessary precautions to ascertain the existence or otherwise of any encumbrance over the property by furnishing the correct details and boundaries of the property which he intended to purchase and therefore, he cannot seek to claim title to the property free from the mortgage by the second respondent in favour of the first respondent under Exhibit A-1 dated 17th January, 1966.

12. Our attention was drawn by the learned Counsel for the appellant to the following statement of law contained in paragraph 345 at page 239 of Volume 15, Halsbury's Laws of England (Third Edition):

Although mere parting with possession of a chattel, or of a document of title other than a negotiable instrument, does not estop the owner from setting up his title against a purchaser for value, it is otherwise where an owner either by giving authority to some person to deal with goods as his own, or by neglect of some duty or precaution which he owes to those who may deal with that person, enables that other to hold himself out as having not the possession only, but the property. Where, far example, a person hands to another a document, purporting on its face to be transferable by delivery. he thereby represents that it will pass with a good title to anyone who takes it in good faith and for value, and is estopped as against any such person from denying its negotiability.

13. In the instant case the first respondent had held out that she is a mortgagee of the property mentioned within the four boundaries referred to in Exhibit A-1 already and no more. There can hardly be any negligence of any duty on the part of the first respondent which could be taken advantage of by the appellant. We are unable to appreciate how the passage referred to above can assist the appellant.

14. The learned Counsel for the appellant also placed strong reliance upon the decision reported in Narasamma v. Subbarayudu and Ors. I.L.R. (1895) Mad. 364, in this connection. In that case, a deed was executed in favour of a Hindu widow by her husband's relative releasing all other rights he had in the properties of her deceased husband. She (the 4th defendant) sold the properties to defendants 1 and 2, while her husband's relative the third defendant, after executing the release deed, sold them to the plaintiff. No description of the property as required under Section 21 of the Registration Act had been given, but the release deed in that case was entered in Book No. IV and not in Book No. I as prescribed by Section 51 of the Registration Act. The question that arose for decision was whether the plaintiff was entitled to recover possession of the properties from defendants 1 and 2. In holding that he was entitled to recover them, the learned Judge made the following observations:

First and second defendants, on seeing that vendor's title deeds, if they had exercised ordinary care and caution, must have seen the flaw in her title, whereas no amount of search in the Book No. 1 in the Registration office would enable the plaintiff to discover that the property sold to him by third defendant as gnati of the last owner Gopal Rao, was released to fourth defendant who is the step-mother of the owner.

The Bench applied the principle that a stranger like the plaintiff in that case should not be made to suffer for a mistake, which could have been easily rectified and that she had herself to blame, if she becomes a loser thereby and her transferees, of course, stood in her shoes. The main reason for arriving as that conclusion was the circumstance that in fact in that case the property had passed to third defendant for consideration and that he should not be made to suffer, because the parties to that document did not take sufficient care to get the document registered in the proper books prescribed as stated already. Such considerations do not arise in the instant case. In the present case, the document had been entered in the proper book, viz., Book No. 1 with sufficient and accurate description and there was no mistake about it and if the appellant had taken care to search in the appropriate book after giving the correct boundaries of the property, he could not have been misled at all. In addition, Narasamma v. Subarayudu and Ors. I.L.R. (1895) Mad. 364, was a case where no description of the property at all as required by Section 21 had been given and this was owing to the mistakes of the party which they had an opportunity to rectify, but it was not done. There ate no such circumstances, in the instant case to justify the application of the principle laid down in that decision in Narasamma v. Subbrayudu and Ors. I.L.R. (1895) Mad. 364. Indeed, in Subbalakshmi Ammal v. Narasimiah : AIR1927Mad586 . Waller and Madhavan Nair, JJ., had occasion to consider the scope of the decision in Narasamma v. Subbarayudu and observed that a careful perusal of that judgment will show that that decision should not be given wider application, but should be understood strictly with reference to its particular facts. Therefore, in our view, the decision in Narasamma v. Subbarayudu I.L.R. (1895) Mad. 364, strongly relied on by the learned Counsel for the appellant cannot be of any assistance to him.

15. The learned Counsel for the appellant next relied upon an unreported judgment of Ramaprasada Rao, J. (as he then was) in S.A. No. 1828 of 1962 and contended that the appellant is an innocent third party purchaser and that as between an alienee, who caused an ineffective registration of a document and an alienee, who fortified himself with an encumbrance certificate, the latter's rights in the immovable property have to prevail. In that case, a suit was instituted on the foot of a mortgage, Exhibit A-1, dated 28th February, 1945, executed by the first defendant over an undivided one-third share of the first defendant in the suit properties. The first defendant and defendants 5 and 6 constituted the members of the Hindu undivided family. The mortgage deed was registered in the office of the Sub-Registrar at Alangudi, one of the sub-districts constituted under the Indian Registration Act, where some of the properties comprised in the mortgage deed were situate. One of the houses which was the subject-matter of the mortgage was in Pudukottai, another sub-district under the Indian Registration Act, where a separate Sub-Registrar was functioning. In 1951, defendants 1, 5 and 6 executed a sale deed of the house property which was the subject-matter of the second appeal on 4th August, 1961, which was registered in the office of Sub-Registrar, Pudukottai Defendants 2 to 4 in the suit purchased that property under that document, Exhibit B.1, dated 4th August, 1951. In that suit on the basis of the mortgage deed dated 28th February, 1945, for realising the balance of principal and interest due on the deed and executed by the first defendant in favour of the plaintiff in the circumstances stated above, defendants 2, 3 and 4 raised a plea that they were bona fide purchasers for value without notice of the suit mortgage as regards the suit property comprised in the mortgage deed, Exhibit A-1, and that since they had constructed a pucca cinema theatre at an enormous cost and the plaintiff who had obtained a mortgage over an undivided share of the first defendant was entitled only to the items said to have been allotted to the first defendant in the partition and not to the items purchased by them, they were not liable. The trial Court upheld the contention of defendants 2 to 4 that they were bona fide purchasers for value without notice of the suit mortgage and that the plaintiff cannot proceed to realise the amount due under the mortgage as against the suit property purchased by defendants 2 to 4. It was also held that the plaintiff was entitled to proceed against the properties said to have been allotted to the share of the first defendant. There was an unsuccessful appeal against this and the appellate Court also found that defendants 2, 3 and 4 were entitled to protection as innocent purchasers without notice of the mortgage, dated 28th February, 1945. The appellate Court also noticed that defendants 2, 3 and 4 obtained an encumbrance certificate, Exhibit B-4 on 13th April, 1951 and satisfied themselves that the suit property was free from encumbrance and therefore, the lower appellate Court gave a finding that defendants 2, 3 and 4 are bona fide purchasers for value without notice and also that the plaintiff cannot ask for any relief against the suit house as in a supervening partition between the members of the joint family, the suit house property was said to have been allotted to other coparceners and therefore the plaintiff's relief was to proceed against the properties obtained by the first defendant in the said partition. In second appeal the contention that was raised before the learned Judge was that defendants 2 to 4 cannot be accepted as bona fide purchasers for value. It was in dealing with this contention, the learned Judge found that there was a failure admittedly on the part of the Sub-Registrar at Alangudi to perform his duties under Section 64 and Section 65 of the Indian Registration Act, with the result that it was an inchoate registration and therefore, the Sub-Registrar, Pudukottai, did not receive any memorandum regarding the registration of a document affecting rights in the suit property so that when defendants 2 to 4 applied for and obtained an encumbrance certificate, the subsistence of the mortgage in favour of the appellant was not disclosed. It was under those circumstances that it was held relying on Ramaswami v. Jagannatha Rao (1961) 1 A.W.R. 105 : I.L.R. (1961) A.P. 579 : (1961) A.L.T. 240 : A.I.R. 1962 A.P. 94, that the respondents in that appeal innocently dealt with the property, purchased the same for consideration and rightly pleaded that the properties have to be protected. In the present case, there has been no failure of performance or violation of any of the statutory duties by the authorities constituted under the Indian Registration Act for registering a document. In addition, the facts are also distinguishable. In the present case, the fault is that of the appellant in not having applied for an encumbrance certificate furnishing the correct boundaries of the property. Therefore, the principles which would be applicable to cases of statutory functionaries failing to perform their duties as a result of which innocent third parties are misled and affected thereby are in applicable to the present case.

16. Again considerations which would be relevant to this aspect and found stated in Section 48 of the Transfer of Property Act and adverted to later by us do not appear to have been brought to the notice of the learned Judge and in our view, the reliance placed by the learned Counsel on the decision in Ramaswami v. Jagannatha Rao (1961) 1 A.W.R. 105 : I.L.R. (1961) A.P. 579 : (1961) A.L.T. 240 : A.I.R. 1962 A.P. 94. and the judgment of Ramaprasada Rao, J. (as he then was) referred to above cannot be of any assistance to him. In addition, it must be pointed out that the appellant, examined as D W. 2, had admitted that he had purchased the property worth about one lakh (at the time of his examination in 1974) for a consideration of Rs. 35,000 on 10th January, 1973. This raises grave doubts about the bona fides of the appellant and the sale being supported by consideration and therefore, the appellant cannot be given any protection as an innocent third party, who has been misled by a mistake.

17. There is yet another objection raised by the learned Counsel for the first respondent, according to whom, no question of bona fide purchase by the appellant without notice would arise at all, in view of Section 48 of the Transfer of Property Act. It is his contention that the question of bona fide purchase or other acquisition of title without notice are confined to cases, which have all been provided for under the Transfer of Property Act under Sections 39, 41, 43, 53, 53-A and 100 and inasmuch as Section 48 us not one of them, the appellant cannot claim that he is a bona fide purchaser from the second respondent without notice. Section 48 of the Transfer of Property Act runs thus:

Where a person purports to create by transfer at different times rights in or over the same immovable property and such rights cannot all exist or be exercised to their, full extent together, each later created right shall in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created.

It is not in dispute that the mortgage had been earlier created by the second respondent in favour of the first respondent on 17th January, 1966 and the sale had later been effected by the second respondent in favour of the appellant on 10th January, 1973. It is also seen that the first respondent's rights as mortgagee over the property and the rights of the appellant as a purchaser of the property free from encumbrance cannot co-exist or be exercised to their full extent together and there is no special contract or binding reservation. It would therefore follow that the sale in favour of the appellant is subject to the mortgage in favour of the first respondent. In this connection, the learned Counsel for the first respondent invited our attention to the decision in Arunachala Asari v Sivan Perumal Asari (1961) 1 A.W.R. 105 : I.L.R. (1961) A.P. 579 : (1961) A.L.T. 240 : A.I.R. 1962 A.P. 94. Though the question that arose therein was with reference in the question of priority with reference to Section 48 of the Transfer of Property Act and Sections 47 and 49 of the Indian Registration Act, Ramamurthy, J., dealt with the true scope of Section 48 of the Transfer of Property Act. At page 533. the learned Judge observed thus:

Section 48 of Transfer of Property Act is founded upon the equally important principle that no man can convey a better title than what he has. If a person had already effected a transfer, he cannot derogate from his grant and deal with the property free from the rights created under the earlier transaction. His prior title of absolute and free owner is curtailed or diminished by rights already created under the earlier transaction. Section 48 of the Transfer of Property Act. is absolute in its terms and does not contain any protection or reservation in favour of a subsequent transferee who has no knowledge of the prior transfer. Knowledge or no-knowledge, a subsequent transferee cannot claim any priority as against an earlier transferee. Whenever the Legislature desires to protect the rights of a transferee in good faith for consideration, specific provision to that effect is made--Vide for instance, Section 27 of the Specific Relief Act, 1877 and Sections 38 to 41 of the Transfer of Property Act. In all other cases, the well-settled rule that a man cannot derogate from his grant will have to be applied.

18. In our view, the above passage succinctly lays down the principle, which is applicable to the instant case. The appellant cannot plead he is a bona fide purchaser without notice of the prior encumbrance in favour of the first respondent and therefore, his purchase ought to prevail in the teeth of the provisions of Section 48 of the Transfer of Property Act. The learned Counsel for the respondents also invited our attention to the judgment of the Supreme Court reported in K. J. Nathan v. S.V. Maruthi Rao and Ors. : [1964]6SCR727 . Though the point has not been directly decided therein, the scope of Section 48 of the Transfer of Property Act referred to above appears to have been given effect to. In that case, the first defendant in the suit borrowed from the plaintiff on seven promissory notes and the plaintiff alleging that the first defendant had created a mortgage by deposit of title deeds in his favour in respect of his half-share in the properties specified in the B Schedule, instituted O.S. No. 45 of 1951, Sub-Court, Tanjore, for enforcing the said mortgage against the said properties. The suit was for recovery of a sum of Rs. 20,435-15-0, viz. Rs. 16,500 towards principal and interest thereon. The first defendant was the mortgagor and second defendant was the subsequent purchaser of several of the items of the suit properties subject to plaintiff's mortgage. The third defendant was the 10th October, a bona fide purpriority over the if it were true. Judge granted a subsequent mortgagee and claimed priority. The fourth defendant was the subsequent purchaser of one of the plaint schedule properties and defendants 5 and 6 were sister and brother of the first defendant. In that suit, the plaintiff also alleged that in a partition effected between the first defendant and his brother, properties described in the C schedule annexed to the plaint were allotted to the first defendant. He therefore prayed that in the alternative the C schedule properties should be sold for the realisation of the amount due to him from the first defendant. The third defendant resisted the suit contending that the first defendant had executed a security bond in his favour for a sum of Rs. 15,000 1947 and that, she being chaser for value, he had plaintiff's security, even The learned Subordinate decree in favour of the plaintiff as against defendants 1 to 3 in a sum of Rs. 9,157-5-0 on the basis of a valid mortgage in respect of items 1 and 4 of the C schedule and a personal decree against the first defendant. The plaintiff preferred an appeal and the third defendant filed a memorandum of cross-objections in so far as the decree was against him. A Division Bench of this Court held that the first defendant effected a mortgage in favour of the plaintiff on 25th January, 1947 and not by deposit of title deeds on 10th May, 1947. On that finding, this Court modified the judgment and decree of the learned Subordinate Judge by restricting the mortgage decree to the plaintiff to the amounts covered by the first three promissory notes and the interest thereon and to one-half of the properties (described in Exhibit A-8) and by giving a money decree against the first defendant for the entire balance of the decree amount. On appeal, the Supreme Court held that the mortgage by deposit of title deeds was effected on 5th July, 1947, but proceeding to consider the effect of the claim of the third defendant in the suit that ha had got executed in his favour a security bond on 10th October, 1947, and as a bona fide purchaser for value, he had priority over the plaintiff's security, the Supreme Court held that if the mortgage by deposit of title deeds was effected on 10th May, 1947, or on 5th July, 1947, the legal position would be the same, as the mortgage deed in favour of the third defendant was executed only on 10th October, 1947. In doing so, the Supreme Court, it appears to us, has given effect to the principle laid down under Section 43 of the Transfer of Property Act. Otherwise, if really the claim of the third defendant as a bona fide purchaser for value was sustainable, his claim would have been given priority over that of the plaintiff. This also points out that there is no question of bona fides whatever and that the true principle that is applicable is only what has been laid down in Section 48 of the Transfer of Property Act. In view of this substantive provision of law in our view, there is no question of any other rule of equity or estoppel, which would override this statutory provision. We must also point out that the learned Counsel for the appellant did not invite our attention to any other decision to the effect that Section 48 of the Transfer of Property Act will not be applicable to the situation presented in the instant case. We are also satisfied that no prejudice has been caused to the appellant by the omission of the Court below to frame an issue regarding this as the appellant was fully aware of the case he had to meet to set out all his pleas and let in evidence as well. We are therefore of the opinion that the appellant cannot claim that as a bona fide purchaser for value without notice of the subsisting mortgage in favour of the first respondent by the second respondent, he is entitled to the property free from the mortgagee.

19. Yet another contention that was raised by the learned Counsel for the appellant is that in the absence of a deed of rectification, the suit is not maintainable. According to him the mortgage document, Exhibit A-1 dated 17th January, 1966, though it gives four boundaries. which would take in No. 73, Arcot Road, Vellore, yet the door number has been given as 72 and in absence of any rectification deed, the suit on the mortgage is not maintainable We are afraid that this contention again is wholly unsustainable. A perusal of the mortgage document Exhibit A-1 dated 1st January, 1966 clearly discloses that the identity of the property with reference to the boundaries is clearly established. In addition as pointed out in the earlier part of the judgment, a Commissioner had also been appointed to make local inspection and to find out how far the description in Exhibit A-1 accords with the actual state of affairs in existence on ground and he has submitted a report that the four boundaries mentioned in Exhibit A-1, dated 17th January, 1966 take in door No. 73, Arcot Road, Vellore. No objection has been raised by the appellant to this report of the Commissioner. Indeed, the writer of Exhibit A-1, dated 17th January, 1966 viz., P. W. 1 has deposed that in Exhibit A-1 the boundaries of door No. 73, Arcot Road, Vellore have been given; but that the door number has been mistakenly written as 72. We are therefore of opinion that the mere mention of door No. 72 must be regarded as a case of mis-description and the identity of the property sought to be mortgaged is well established by the boundaries and the identity is not in any manner affected by the wrong door No. 72. We have no hesitation in rejecting this contention of the learned Counsel for the appellant. The criticism that the first respondent has not made herself available for being cross-examined and therefore, her non-appearance as a witness should be the strongest possible circumstance to discredit her case has no force. The first respondent is a Muslim lady, who observes purdha and her father's accountant has been examined on her behalf as P. W. 1, He is also the writer of Exhibit A-1. Nothing has been said as to why we should not accept the evidence of P. W. 1 and in the absence of convincing and compelling reasons for not accepting the evidence of P. W. 1. his evidence cannot be rejected and he has spoken to the details relating to the mortgage. We accept his evidence. In our view, therefore, the non-examination of the first respondent is immaterial and cannot in any manner affect her claim on the mortgage. We are therefore of the view that the lower Court was perfectly right in having decreed the suit and we do not see any reason to interfere with its conclusions. This appeal therefore fails and is dismissed with the costs of the first respondent.

20. The learned Counsel for the appellant leave to prefer an appeal to the Supreme Court. We are satisfied that there is no substantial question of law of general importance which would justify the grant of leave. The request of the learned Counsel for the appellant is rejected.


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