Pundlik Narayan Mahure vs Keshao Narayan Mahure (Dead) Through ... on 27 September, 2021

[Cites 16, Cited by 1]

Bombay High Court

Pundlik Narayan Mahure vs Keshao Narayan Mahure (Dead) Through ... on 27 September, 2021

2. This is defendant's second appeal preferred against the judgment dated 16/01/2008 passed by the First Appellate Court, Nagpur. The judgment was pronounced in a first appeal preferred by the plaintiff. Plaintiff's suit for possession was dismissed by the Trial Court. Whereas he succeeded before the First Appellate Court.

3. The defendant was directed to handover possession of the suit land to the plaintiff and the plaintiff was asked to deposit Rs.7,000/- in the Court. That is how the defendant has approached to this Court.

Background

4. Both the plaintiff and defendant are the real brothers. There was a partition of properties/lands in between them and ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 3 sa 55-2008.odt other co-sharers. It was effected in the year 1973. All the sharers were allotted lands in that partition. There is no dispute amongst the parties about partition. But there is dispute between them about exact area of land allotted to each of them.

5. The suit land admeasuring about 1 ½ acres and it is part of land middle portion shown in the map out of land bearing Survey No.76/2, 3 and 4. It is situated at Khadaka, Tahsil Hingna, District Nagpur. Plaintiff claims that he got 5 acres of land in partition effected in the year 1973 and defendant too got 5 acres of land. Plaintiff's claim is that subsequently in the year 1980 land admeasuring 5 acres of land (out of 5 acres of land allotted to his share) was put in possession of the defendant towards repayment of Rs.6500/-. It was plaintiff's case that once the amount will be paid, defendant has agreed to handover back the possession to the plaintiff. Whereas as per the defendant, though he is in possession of 1 ½ acres of land, it is not as per the theory put up by the plaintiff. He claims to be in possession of the suit as per their mutual partition of the year 1973. He has also disputed the allocation of shares as alleged by the plaintiff. According to him, it is 3 acres to plaintiff and 7 acres to defendant (and not 5 acres each). As defendant failed to return possession of suit land inspite ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 4 sa 55-2008.odt of offering of Rs.6500/- by the plaintiff, he filed a suit for possession.

Filing of suit

6. On the basis of these pleadings, both the parties adduced oral and documentary evidence. Though the plaintiff relied upon two written agreements, he has not produced their originals. The details of those agreements are as follows:-

a) Agreement dated 06/11/1980 (thereby the defendant Pundlik agreed to sell his right over well water to plaintiff for Rs.7000/-)

b) Agreement dated 17/06/1981 executed by the plaintiff alone in favour of defendant (thereby giving his land bearing Patwari Halka No.45 admeasuring 2 acres and plaintiff agreed to take back field on payment of Rs.7000/-).

It is very interesting to note that the defendant who denied the theory putforth by the plaintiff and also execution of any agreement, he himself has produced photocopies of two agreements.

Trial Court refused to accept the two agreements as corroborative piece of evidence for the plaintiff's theory. Trial ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 5 sa 55-2008.odt Court has considered the second agreement as a deed of mortgage. Admittedly it was not registered. Hence, it was not admitted into evidence by the trial Court. Resultantly, the suit was dismissed.

First Appeal

7. Whereas the First Appellate Court observed that the agreement dated 17/06/1981 will amount to mortgage and still was pleased to decree the suit. However, the First Appellate Court has not dealt with the objection of non registration of the agreement dated 17/06/1981.

Second Appeal

8. On this background, defendant has filed this appeal. This Court was pleased to frame one substantial question of law about "effect and consequences of those agreements". When this Court heard the arguments of learned Advocate Shri Choube for appellant/defendant and learned Advocate Shri Mishra for respondent/plaintiff, this Court find it necessary to frame one more substantial question of law.

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9. Accordingly this appeal was heard on following substantial questions of law :-

   Sr.                  Question                    Findings
   No.
    1. What is the effect           and i) photocopy of agreement
       consequences   of             the dated     06/11/1980    is
       photocopies of the           two accepted.
       agreements?                       ii) photocopy of agreement
                                         dated 17/06/1981 can not
                                         be considered.
    2. Whether the First Appellate             In the affirmative
       Court committed wrong in
       accepting the photocopy of
       the      agreement     dated
       17/06/1981 and considering
       it as a mortgage deed?

10. The additional substantial question was framed for the reason that there was also a dispute about nature of the agreement dated 17/06/1981. That is to say whether it is mortgage deed or not. Even though substantial questions are centered around "the agreement is mortgage deed or not" the background needs to be considered. If we read the pleadings and evidence, there are three aspects. They are as follows:

a) The partition in between the plaintiff, defendant and other brothers.

b) Purchase of defendant's right to use well water by the ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 7 sa 55-2008.odt plaintiff and

c) Putting the defendant into possession of 1 ½ acres of land till the time plaintiff will pay Rs.6500/- (towards purchase price for right to use well water).

11. The fact of giving possession of 1 ½ acres of land to defendant, it has got connection to the distribution of land during partition of the year 1973. There is a version and counter version. Plaintiff claims that he and defendant got 5 acres of land each. And out of that, 1 ½ acres is handed over to defendant. Whereas defendant claims that the land of 1 ½ acres possessed by him is not as per the theory put by the plaintiff but in fact he received 7 acres of land and plaintiff received only 3 acres of land during partition.

12. If we have read the finding given by the Trial Court, we may find that 'the issue of partition in the year 1973' was answered in favour of the plaintiff. Whereas "the issue of distribution of ½ acre of land in between plaintiff and defendant"

was answered in the negative. (page no.42) Non examination of other sharers of the partition by the plaintiff and not producing memorandum of partition were considered as reasons for not ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 8 sa 55-2008.odt believing the case of distribution of shares. (page 46 and 47) Whereas the First Appellate Court has framed one common point for both the issues and answered it in favour of the plaintiff. Defendant has not produced any evidence to substantiate the theory of 7 acres was considered by the First Appellate Court against the defendant. (para no.7) This Court has not framed any substantial question of law "regarding appreciation of evidence by the First Appellate Court on the point of partition and allocation of shares." Even neither of the learned Advocates have argued on that aspect. So this Court is not expressing any opinion on that aspect. Even otherwise if looked from another angle paramount consideration is whether there was transaction of mortgage. It has come in the cross-examination of plaintiff Keshav that Vishwanath has filed Regular Civil Suit No.523/1979 for partition.(page 77) This Court is not aware about outcome of that proceedings. Hence the Court seized of the matter is competent to express opinion on that aspect. Even otherwise issue of partition is not the principle issue but secondary/ancillary issue in the present matter.

Submission on behalf of defendant-appellant

13. The plaintiff has examined himself and two attesting ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 9 sa 55-2008.odt witnesses of the second agreement. Two agreements were not exhibited before the Trial Court. Learned Advocate Shri Choube submitted that if this evidence in toto is considered together, it amounts to the transaction of mortgaging the suit land by the plaintiff to defendant. According to him, if there is a mortgage deed, registration under Section 59 of the Transfer of Property Act is mandatory. It is submitted that the First Appellate Court has not dealt with the issue of non registration of the second agreement. He relied upon the following judgments:

i) Ramakanta Deb Roy and another Vs. Shri Amalendu Dutta and others reported in 1990 (1) Gauhati Law Reports 323, there was an issue raised on behalf of the defendant that the agreement is not a usufructuary mortgage but only a contract and as such does not require registration. It has been held "mortgage also is an agreement between the mortgagor and the mortgagee by which a transfer of interest in specific immovable property is made for the purpose of securing the payment of money (para 10). It was further held that "usufructuary mortgage" is one of the species of 'contract' and it is subject to provisions of Section 59 of the Transfer of Property Act and can be effected only by registered instrument. (para 13)

ii) Vishwanath Dadoba Karale Vs. Parisa Shantappa Upadhye ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 :::

10 sa 55-2008.odt reported in (2008) 11 Supreme Court Cases 504 - the Hon'ble Supreme Court has observed about differentiation from mortgage by conditional sale and a sale with an option to repurchase. The real nature of transaction that is mortgage or sale can be ascertained from language of the document and attending circumstances. The document was held as a mortgage.

14. As against this learned Advocate Shri Mishra submitted that the plaintiff has nowhere pleaded and deposed that the transaction as evidenced in the agreements would amount to mortgage. Except at one stage, plaintiff has nowhere referred this transaction as that of mortgage. Hence according to him registration is not required. Learned Advocate Shri Mishra relied upon following judgments:

a) Ganpat and others Vs. Nanaji and another reported in AIR 1981 Bombay 335 - The issue involved was whether the document in question is a release deed or mortgage deed. The owner/vendor of the land has agreed to sell the land to the purchaser. The purchaser paid certain earnest money. The transaction could not be materialized. The vendor was liable to return earnest amount.

So instead of returning that amount, he entered into an agreement with the purchaser. He put the purchaser into possession for five ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 11 sa 55-2008.odt years. This Court has interpreted the difference between a deed of mortgage and deed of lease. After considering the contents of the document, it was held that the transaction is not of a mortgage but a lease.

b) Namadev Keshav Hindalekar Vs. Nazar Sheriyar Mazada reported in AIR 1983 Karnataka 19 - there was an issue whether the document is a lease deed or mortgage deed. While deciding such an issue what should be the approach of the Court, that has been laid down.

"Nomenclature given to a document by the scribe or even by the parties is not always conclusive. In construing a document, it is always necessary to find the intention of the party executing it and such intention has to be gathered from the recitals and the terms in the entire document and from surrounding circumstances". (para 12) While elaborating the difference in between mortgage and lease, it has been observed "when interest in property is transferred as a security for repayment of debt, it is a mortgage whereas in a lease it is a transfer of a right to enjoy the property".

(para 12)

c) According to learned Advocate Shri Mishra, the transaction was not that of a mortgage and as such registration is ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 12 sa 55-2008.odt not compulsory. To buttress his submission he relied upon a judgment in case of Dattatreya Shanker Mote and others Vs. Anand Chintaman Datar and other s reported in (1974) 2 Supreme Court Cases 799. The Hon'ble Supreme Court has interpreted the difference between a transaction of charge and mortgage. It was held that "charge can be created either by act of parties or by operation of law whereas the mortgage can only be created by act of parties. Charge is a wider term and includes mortgage, every mortgage is a charge but every charge is not mortgage". (para 7) What are the effect of every kind of transfer of property and different phraseography used in different sections of the Transfer of Property Act is also explained. (para 15, 16 and 17) In case of a charge the transferor has a subsisting interest though limited to some extent by the charge-holder's right to recover the monies due from the specific immovable property. Whereas in case of mortgage, the mortgagor has the equity of redemption left in him. (para 17)

15. If we consider the principles laid down in above referred judgments, following principles emerges :-

a) The title given to document is not important, we have to consider the contents of the agreement.

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13 sa 55-2008.odt

b) The intention of the parties for executing that document is important and it can be inferred from contents of that document and by surrounding circumstances. If it is a mortgage, it requires attestation by two witnesses and registration (Section 59 of Transfer of Property Act).

c) Mortgage involves transfer of an interest for securing payment of the debt (as compared to the lease wherein there is a transfer of right to enjoy the property).

d) Only because the liability is past and for discharging that liability lease deed has been executed, a relationship does not turn into that of mortgagor or mortgagee.

e) Charge can be created by act of parties or by operation of law whereas mortgage can only be created by act of parties.

f) Charge is a wider term and it includes mortgage also and in that every mortgage is a charge but every charge is not a mortgage.

g) Section 100 of the TP Act does not lay down a specific manner or procedure as to how charge is created. That is to say the procedure about registration and attestation as described in Section 59 of the TP Act.

h) In mortgage there is transfer of interest that is to say ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 14 sa 55-2008.odt right to appropriate balance amount and right to sell the mortgage property. Whereas a charge only gives right to payment out of property without transferring that property.

i) If instrument creates a charge of the value of more than Rs.100/-, the document must be registered under Section 17 (1) (b) of the Registration Act. (para 17 of the judgment in case of M.L. Abdul Jabhar Sahib Vs. H.V. Venkata Sastri and others reported in AIR 1969 Supreme Court Cases 1147.

Findings of the Courts

16. It will be material to consider the findings of the Court below on the aspects about the nature of second agreement. The findings of the First Appellate Court are as follows:

i) The first appellate Court had posed a question before himself "as to whether the documents can be said to be proved and could be read in evidence" . The finding given is " Both the agreements could be read in evidence".

While coming to this conclusion, First Appellate Court relied upon the provisions of Sections 65 and 66 of the Evidence Act. The ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 15 sa 55-2008.odt original of these agreements were not traceable to defendant. The admission given by defendant that there was an agreement for sale was also considered.

ii) It was further observed that, "possession was delivered as a security and it may amount to mortgage. The mortgagor has every right to redeem the property till decree of foreclosure is passed. Even otherwise, on the basis of title, the plaintiff can claim the possession of the property since the time defendant refused to accept money as per agreement, more particularly in view of agreements and when defendant failed to prove that he got 7 acres land in partition".

17. Learned Advocate Shri Choube has challenged these findings. According to him the First Appellate Court has not dealt with the necessity of registration of the deed of mortgage. He invited my attention to the relevant observations from the Trial Court judgment.

Observations by Trial Court "The defendant has taken objection for referring the document as it is not admissible in evidence. The plaintiff has tried to refer the copy of unregistered mortgage deed in the evidence. As per the Section 59 of ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 16 sa 55-2008.odt the Transfer of Property Act, the mortgage deed must be registered, otherwise it is not admissible in the evidence".

Conclusion

18. On this background when the evidence adduced by the plaintiff and defendant are perused we may find that plaintiff in his evidence has stated following facts:

" fofgjhps ik.kh djhrk deh iMr vlY;kus eh iz ok lkafxrys dh eh fofgj fodr ?ks.;kl r;kj vkgs o rks eatwj >kyk lgk gtkj ikp'ks :i;kr fod.;kps Bjys fofgj fod.;kpk lkSnk lu 1980&81 lkyh >kyk izrhonhus fofgj [kjsnhpk djkj ekÖ;k lkscr dsyk gksrk rks djkj lu 1980&1981 lkyh dj.;kr vkyk gksrk i.k iSlkP;k v<p.kh eqGs eh rks djkj d: 'kdyks ukgh- "

This is so far as the first agreement is concerned.

19. In respect of second agreement the plaintiff has deposed thus:

" R;kuarj 1981&1982 e/;s ijr fofgj [kjsnhpk djkj ekÖ;k o iz n` oknhr >kyk o eh iSlkps ekscnY;kr iz-ok- dcqy dsys gksrs dh nksu ,dj 'ksr R;kP;k dMs xgk.k Bsorks o djkj iq.kZ djrks vkf.k jdesph O;oLFkk >kY;kl tehu lksMoqu ?ksbZy R;kuarj eh 1985&1986 lkyh iz- ok- dMs nksu ,dj tehu lksMqu fofgjhph jDde :- ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 :::

17 sa 55-2008.odt 6500@& ?ks.;kl udkj fnyk o xgk.k Bsoysyh tfeu R;kP;k Lor%pk ekydhph vkgs vls lkaxr gksrk- "

20. It is an admitted fact that those two agreements are not produced by the plaintiff. But they were produced by the defendant. Both the witnesses though may not be aware about exact contents of the agreement, their evidence suggest that they have attested the second agreement. Whereas defendant Pundlik in his evidence has denied execution of any agreement and sale of right to well water for Rs.6500/-. During cross examination he was confronted with the list of documents at Exhibit 13 filed by him and the agreement filed at Sr No.1. He admits production of document as per list at Exhibit 13. He admits possession of their originals but losing the originals. From this evidence there is reason to believe that two agreements were certainly executed between plaintiff and defendant.

21. The nature of second agreement has to be tested on the background of above evidence. The following facts emerge-

a) He had given two acres of the land to defendant in consideration of the money to be paid towards well water.

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18 sa 55-2008.odt

b) It was decided to release the land on payment of the amount.

c) Defendant refused to release the land on payment offered by the plaintiff.

Findings

22. The emphasis of learned Advocate Shri Mishra is that there is only reference of mortgage at one stage and the transaction cannot be considered as a mortgage. If we consider the principles reproduced above and the evidence, we may find that the following ingredients are missing:

a) right to sell mortgaged property if the dues are not cleared,

b) right to appropriate usufruct towards outstanding.

These ingredients are explained in types of mortgages laid down in Section 58 of the TP Act. Any transaction can be described as 'mortgage' when if it falls within a meaning of mortgage under Section 58 (a) of the TP Act and satisfying requirement of one of the kinds of mortgage given in Section 58 of the TP Act. The phrase "transfer of an interest" used in Section 58 (a) has to be understood in the context of kinds of mortgages given in Section 58 (b-g) of the TP Act. Merely because at the one stage plaintiff ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 19 sa 55-2008.odt has referred the word 'mortgage' transaction will not amount to mortgage unless its ingredients are satisfied'. So when that ingredients are not there, it is difficult to believe that their transaction is of mortgage. Learned Advocate Shri Mishra is right that the transaction will not amount to mortgage. However, this much observation is not helpful to the plaintiff. Because the transaction may amount to charge. The ingredient about transfer of an interest is absent and hence the transaction may amount to creation of charge. As explained in case of Dattatreya Mote(supra), in case of charge- interest is not transferred but there is only a right to payment out of property. Present case falls into that category. However as the second agreement is reduced into writing, the provisions of Section 17 (1)(b) of Registration Act are applicable. As held in case of M.L. Abdul Jabhar Sahib (supra), charge reduced into writing also requires registration (as it is the act of the parties). The First Appellate Court has wrongly concluded that it is transaction of mortgage. It was overlooked that "the ingredient about transfer of an interest" is missing. So the findings of the Appellate Court that it is a mortgage is required to be set aside.

23. Section 49 of the Registration Act bars the Court from ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 20 sa 55-2008.odt receiving any document in evidence if such document is required to be registered. The requirement of registration may be under Section 17 of Registration Act or by provision of TP Act. The provisions of Section 17 (1)(b) of the Registration Act will come in to picture. So the second agreement being unregistered cannot be considered in evidence.

Mode of proof

24. It is admitted fact that the originals of two agreements were not produced. The Trial Court rightly refused to admit the second agreement in evidence as it is unregistered. Trial Court rightly observed "therefore the copy of which the plaintiff has tried to refer it in evidence by way of secondary evidence is also not admissible" (para 17). Whereas the First Appellate Court though was right in accepting the plaintiff's evidence as secondary evidence has overlooked the issue about necessity of registration. In para nos.8 and 9 of the judgment, the First Appellate Court has rightly considered the proof of circumstances by the plaintiff to adduce secondary evidence. But it is settled law that primary or secondary evidence can be given in respect of document which is admissible in evidence. The document i.e. agreement dated ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 21 sa 55-2008.odt 17/06/1981 which is inadmissible in evidence cannot be tendered even if it is original. The First Appellate Court has totally overlooked this fact. However there was no wrong on the part of First Appellate Court in considering photocopy of first agreement dated 06/11/1980 as the case for secondary evidence is made out.

Use for collateral purpose

25. Learned Advocate Shri Mishra alternatively submitted that unregistered agreement can be considered for collateral purpose as contemplated in proviso to Section 49 of the Registration Act. In order to buttress the submission he relied upon following judgments:

a) S. Kaladevi Vs. V.R. Somasundaram and others reported in AIR 2010 Supreme Court Cases 1654. In the said judgment, the Hon'ble Supreme Court dealt with an issue about considering unregistered sale-deed in evidence. There was a suit for specific performance on the basis of sale-deed. Though it was lodged for registration, it could not be registered due to an order attaching the property. When unregistered sale-deed is tendered in evidence not as an evidence of completed sale, but as a proof of oral agreement, it can be received in evidence. It is important to note ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 22 sa 55-2008.odt that in above mentioned case, the suit was for specific performance and proviso to Section 49 of the Registration Act permits consideration of unregistered agreement.

b) In case of Thulsidhara and another Vs. Narayanappa and others reported in 2019 (3) Civil Law Journal 882, unregistered deed of partition was considered as a family arrangement. It was described as Palupatti means list of properties partitioned. (para no.9)

26. The law on the point of "use of compulsorily registrable agreement not registered for collateral purpose" is well settled. The collateral purpose is a purpose other than the main purpose. It must be independent of main purpose. The law on this point is summarized by the Hon'ble Supreme Court in case of K.B. Saha & Sons (P) Ltd. V. Development Consultant Ltd . reported in (2008) 8 Supreme Court Cases 564. The Principles were summarized in para no. 34 of the said judgment.

27. So I am afraid that the unregistered deed can be considered for collateral purpose. The collateral purpose suggested by learned Advocate Shri Mishra was "evidencing transaction in between the plaintiff and defendant not as a ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 23 sa 55-2008.odt mortgage". The purpose suggested by him is founded on the ingredients of mortgage only. So the said purpose cannot be said to be independent of the main purpose for which the plaintiff made an attempt to consider as evidence.

Conclusion

28. For the above discussion the transaction in between plaintiff and defendant recorded in the agreement dated 17/06/1981 was certainly a transaction amounting to charge. The second agreement being unregistered cannot be considered as evidence of mortgage transaction. It cannot be considered for collateral purpose too. The First Appellate Court though has rightly given benefit of secondary evidence to the plaintiff, has committed wrong in reading that document into evidence. It is more strange on the part of First Appellate Court to consider that agreement in evidence in spite of giving a finding that the agreement is a mortgage. The said finding needs to be set aside. Even if the first agreement dated 06/11/1980 is proved, it can only suggest that defendant sold his right to use well water. On that basis any inference about possession of suit land handed over to defendant cannot be drawn.

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24 sa 55-2008.odt

29. The scope of second appeal is limited but if the finding of First Appellate Court is based on non consideration of legal provisions, this Court can step in and can correct the findings. So this Court has to conclude that plaintiff has failed to prove his case of mortgage by adducing legal admissible evidence. Hence "this Court concludes that photocopies of two agreements have no evidentiary value and question no.1 is answered accordingly". So also the First Appellate Court has wrongly admitted the agreement into evidence and hence that question has to be answered in the affirmative. Hence the judgment and decree passed by the First Appellate Court needs to be set aside and that of the Trial Court needs to be restored. Hence the following order is passed:

ORDER

i) Second appeal is allowed.

ii) The judgment and decree passed by the Court of Ad-hoc District Judge No.1, Nagpur dated 16/01/2008 in Regular Civil Appeal No.457/1997 is set aside.

iii) The judgment of the Trial Court thereby dismissing the suit is restored.

iv) If the plaintiff/respondent has deposited Rs.7000/- (as ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 ::: 25 sa 55-2008.odt directed by First Appellate Court), it be retained to his legal representatives.

30. Parties to bear their own costs.

JUDGE R.S. Sahare ::: Uploaded on - 28/09/2021 ::: Downloaded on - 29/09/2021 02:31:57 :::

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