Punjab-Haryana High Court
Pirthi And Ors. vs Daya Kishan And Anr. on 4 July, 2007
Equivalent citations: (2007)4PLR393
Author: Satish Kumar Mittal
Bench: Satish Kumar Mittal
JUDGMENT Satish Kumar Mittal, J.
1. This is a plaintiffs' appeal. It has been directed against the judgment and decree dated 11.10.1982, whereby the first appellate court, after setting aside the judgment and decree of the trial court, has dismissed the suit of the plaintiffs for declaring them absolute owners of the suit land measuring 8 Kanals 12 Marlas.
2. Most of the facts of the case leading to the filing of this appeal are undisputed. The suit land was owned by defendant No. 1 Daya Kishan. He mortgaged the land with possession in favour of the plaintiffs vide registered mortgage deed dated 4.7.1972 (Ex. P6) for a consideration of Rs. 9,000/-. The mortgage deed contained a stipulation that the mortgaged amount will not carry any interest and the mortgagee was entitled to enjoy the fruits of the property. It also contained a stipulation that the mortgaged amount shall be paid within one year and the land shall be redeemed accordingly, failing which it will not be permissible for mortgagor to redeem the land and the mortgagee will become owner and will be entitled to take out appropriate proceedings in Court for foreclosure. Undisputedly, the mortgage debt was not discharged by defendant No. 1 within the stipulated period of one year. He rather further mortgaged the suit land in favour of Zile Singh-defendant No. 2.
3. On 20.8.1973, the plaintiffs served a notice of demand upon defendant No. 1 Daya Kishan requiring him to pay the mortgage debt within 15 days from the date of receipt of the notice. When in spite of the alleged notice, the mortgage debt was not paid, the plaintiffs initiated the foreclosure proceedings by filing application dated 20.10.1973 (Ex. P4) in the Court of District Judge, Rohtak, under Section 8 of the Bengal Regulation Act XVII of 1806 (hereinafter referred to as 'the Bengal Regulation'), by pleading that the mortgagee was issued a notice of demand on 20.8.1973 and in spite of the expiry of the prescribed period of 15 days, he has not redeemed the mortgage. It was also pleaded that the aforesaid notice of demand dated 20.8.1973 was refused by the mortgagor. In pursuance of the said application, a Parwana/notice dated 19.3.1978 (Ex. P7) was purported to have been issued by the District Judge, contemplating that the mortgage should tender the mortgage amount together with such interest as may be due thereon within one year from the date of receipt of the said Parwana/notice, failing which the mortgage will foreclose and the conditional sale will become conclusive. It was the case of the plaintiffs that in spite of the said Parwana/notice issued by the District Judge in the foreclosure proceedings under the Bengal Regulation, the defendant mortgagor did not pay the mortgage debt within the stipulated period of one year. Hence, on 28.9.1980* plaintiffs filed the instant suit for declaration that they have become absolute owners of the suit land and the further mortgage of the suit land by defendant No. 1 in favour of defendant No. 2 is illegal and ineffective qua them.
4. The defendants contested the suit. In was denied that any demand notice was served upon defendant No. 1 by the plaintiffs. It was also averred that defendant No. 1 was not duly served with the Parwana/notice of foreclosure proceedings. It was alleged that the foreclosure proceedings were not validly carried out. He was always ready to redeem the mortgage. Subsequently, the plaintiffs amended their plaint to the effect that besides notice dated 20.8.1973, they also served notice of demand upon defendant No. 1 on 5.9.1973. Defendant No. 1 also denied the service of said notice upon him.
5. Initially, the trial court decreed the suit and held that the notice of demand dated 5.9.1973 was duly served upon defendant No. 1 and in spite of that, he did not discharge the mortgage debt within the time prescribed. It was further held that the order dated 15.4.1978, passed by the District Judge, in the foreclosure proceedings under the Bengal Regulation is conclusive of the due service of the notice of the foreclosure proceedings upon the borrower and also of the validity of the said order. Therefore, it was presumed that defendant No. 1 was duly served in the foreclosure proceedings and in spite of the passing of the said order, he did not pay the mortgage debt within a period of one year. Hence, the plaintiffs were declared to be absolute owners of the suit property.
6. On appeal filed by the defendants, the First appellate court reversed the judgment and decree of the trial court and dismissed the suit of the plaintiffs. The first appellate court, while dismissing the suit, has recorded the following findings:
(a) That the plaintiffs have failed to establish that notice of demand dated 5.9.1973 was served upon defendant No. 1;
(b) That the plaintiffs' reliance on notice of demand dated 5.9.1973 in the suit was not permissible or of any avail, as their application under Section 8 of the Bengal Regulation was based on notice of demand dated 20.8.1973 and not on the notice dated 5.9.1973. Thus, it has been held that only notice of demand dated 20.8.1973 ought to have been proved by the plaintiffs and since that notice has not been proved nor it exists on the record, therefore, suit of the plaintiffs is liable to be dismissed;
(c) That copy of the application of foreclosure filed under Section 8 of the Bengal Regulation was not supplied to the defendants along with Parwana/notice issued by the District Judge, as has been so stated by PW.3 Om Parkash, Process Server, who in his cross-examination has categorically stated that with the Parwana/notice, copy of the foreclosure petition was not supplied. It has been held that since supplying of the disclosure petition with Parwana/notice to the defendants was mandatory, therefore, the order passed by the District Judge in the foreclosure proceeding under Section 8 of the Bengal Regulation was not legal and valid and on the basis of the same, suit of the plaintiffs cannot be decreed.
7. Against the aforesaid judgment and decree of the first appellate court, the instant Regular Second Appeal has been filed by the plaintiffs.
8. Shri Sudhir Mittal, Advocate, learned Counsel for the appellants-plaintiffs submits that the first appellate court has wrongly recorded the finding that the demand notice dated 5.9.1973 was not duly served upon defendant No. 1, though the plaintiffs had served the said notice by registered letter, which according to the endorsement of the Postman was refused to be accepted by the defendant. The postal receipt along with the said endorsement of the Postman has been placed on record as Ex. P13. In spite of that, it has been wrongly held by the first appellate court that the plaintiffs have failed to prove that the said notice of demand was served upon the defendant. Learned Counsel further submits that the first appellate court has erred in law, while coming to the conclusion that the plaintiffs cannot place reliance upon notice of demand dated 5.9.1973 in the suit, as the application for foreclosure proceedings filed under Section 8 of the Bengal Regulation was based on the notice of demand dated 20.8.1973. Learned Counsel submits that in a suit for declaration filed after taking the foreclosure proceedings under the Bengal Regulation, the plaintiff is required to prove that before initiating the foreclosure proceedings, a notice of demand was served upon the mortgagor to discharge the mortgage debt. If he fails to discharge the said mortgage debt within the stipulated time, given in the notice, the mortgagor can initiate the foreclosure proceedings under the Bengal Regulation. Learned Counsel submits that it is immaterial whether in those proceedings, the plaintiff relies upon the said notice or any other notice given by him to the mortgagor. Therefore, the approach of the first appellate court in this regard is totally erroneous. Learned Counsel for the appellants further submits that the first appellate court has also recorded a wrong finding, contrary to the facts, that the defendant mortgagor was not supplied with the copy of foreclosure petition, in spite of the fact that in the Parwana/notice itself, it was mentioned that copy of the foreclosure petition was furnished herewith. Learned Counsel submits that even otherwise, it should be presumed that while passing the order on the foreclosure petition, the District Judge had complied with all the formalities. Therefore, in this regard also, the first appellate court has committed illegality while dismissing the suit of the plaintiffs. Learned Counsel has submitted that the following two substantial question are arising in the instant appeal:
(i) Whether the first appellate court has mis-read and mis-appropriated the documentary evidence produced on record, which has resulted in mis-carriage of justice?
(ii) Whether the plaintiffs-appellants are entitled in law to foreclose the mortgage in their favour by defendant No. 1?
9. On the other hand, Shri Govind Goel, Advocate, learned Counsel for the defendants submits that the aforesaid findings recorded by the first appellate court are the pure finding of facts based on the evidence available on record, which do not require any interference in the Regular Second Appeal. He submits that the findings regarding failure of the plaintiff to serve demand notice, on the basis of which foreclosure petition was filed, is a finding of fact and such finding cannot be disturbed in the Regular Second Appeal. He further submits that the finding regarding non-service of foreclosure petition along with summons, which vitiates the foreclosure proceedings, is also a pure finding of fact. Therefore, in view of these findings of fact recorded by the first appellate court, no interference is required in exercise of the power of this Court under Section 100 of the Civil Procedure Code. In this regard, he relies upon Kulwant Kaur v. Gurdial Singh , Janki Narayan Bhoir v. Narayana Namdeo Kadam , Bondar Singh v. Nihal Singh and Kanhaiyalal v. Anupkumar . He further submits that to prove the service of notice of demand dated 20.8.1973, which was relied upon by the plaintiffs in the foreclosure proceeding is a sine qua non for a valid order of foreclosure/conditional sale. Thus, there is no illegality or perversity in the impugned judgment and decree, passed by the first appellant court.
10.In order to succeed in a suit filed by a mortgagee seeking declaration of ownership on the basis of the order of foreclosure/conditional sale, it is mandatory for the plaintiff to prove that:
(a) a notice of demand to discharge the mortgage debt was served upon the mortgagor and in spite of that, he has failed to pay the mortgaged amount to the mortgagee within stipulated time; and
(b) valid foreclosure proceedings were initiated and in spite of receiving the Parwana/notice along with the copy of the foreclosure petition, the mortgagor has failed to pay the mortgage money within a period of one year of the receipt of the said Parwana/notice.
11. In the instant case, the plaintiffs have failed to prove the aforesaid the conditions, therefore, the first appellate court has rightly dismissed their suit. Initially, it was the case of the plaintiffs that they had served a notice of demand dated 20.8.1973 upon defendant No. 1 requiring him to pay the mortgage debt within 15 days from the date of receipt of the notice. In their written statement, the defendants categorically denied the receipt of such notice. Thereupon, the plaint was amended and in the amended plaint, it was averred that the plaintiffs had also served a notice dated 5.9.1973 upon defendant No. 1 requiring him to pay the mortgage debt within 15 days. In the suit, serving of notice dated 20.8.1973 has not been proved. However, the plaintiffs have tried to prove service of notice of demand dated 5.9.1973 by placing on record the postal receipt with endorsement to the effect that addressee had refused to accept the letter containing the notice. By placing on record the postal receipt, the presumption of due service of notice by registered post under Section 114 of the Evidence Act arose in favour of the plaintiffs, but the said presumption has been rebutted by unshattered testimony of DW. 1 Daya Kishan, defendant No. 1, wherein he stated that he did not refuse to accept any notice from the Postman and no such notice was tendered to him by the Postman. It is well settled law as has been held in Har Charan Singh v. Shiv Rani and Ors. A.I.R. 1981 Supreme Court 1284, that when a registered envelope is tendered by a Postman to the address, but he refused to accept it, there is due service effected upon the addressee by refusal; the addressee must, therefore, be imputed with the knowledge of the contents thereof and, this follows upon the presumptions that are raised under Section 27 of the General Clauses Act, 1897 and Section 114 of the Evidence Act. However, presumptions both under Section 27 of the General Clauses Act as well as under Section 114 of the Evidence Act are rebuttable. It is also well settled that said presumption stands rebutted by the statement oh oath by the addressee that no such notice was ever tendered to him by the Postman and he did not refuse to accept any notice from the Postman. In Puran Chand v. Smt. Lajya Watti (1972) 74 P.L.R. 930 (P & H) and Jagat Ram Khullar and Anr. v. Bam Mal , it has been held that mere statement on oath by the addressee denying the tender and refusal to accept the delivery of the letter is sufficient to rebut the presumption raised under Section 27 of the General Clauses Act as well as under Section 114 of the Evidence Act. In the instant case, the presumption arising in favour of the plaintiffs stands rebutted by the unshattered testimony of defendant No. 1, while appearing as DW. 1. In that situation, to prove the said notice of demand, the plaintiffs were required to examine the Postman, which they did not.
12. Secondly, in my opinion, the first appellate court has rightly held that the plaintiffs cannot put reliance on the notice of demand dated 5.9.1973 in the suit. Undisputedly, in the foreclosure petition filed under the Bengal Regulation, the plaintiffs did not place reliance on the notice of demand dated 5.9.1973. Rather, in that petition, they had relied upon the notice of demand dated 20.8.1973. The said notice, undisputedly, has not been proved by the plaintiffs. It is a mandatory requirement for initiating the foreclosure proceedings that a notice of demand should have been served upon the mortgagor to discharge the mortgage debt and the said fact should have been mentioned in the foreclosure petition. It is also mandatory requirement that along with the Parwana/notice, a copy of the foreclosure petition should be served upon the mortgagor. Therefore, in the suit, the plaintiffs cannot be permitted to rely upon the other notice i.e. notice dated 5.9.1973, which was not relied upon by them in the foreclosure proceedings. I do not find any force in the contention of learned Counsel for the appellants-plaintiffs that after the amendment, the plaintiffs had relied upon the notice dated 5.9.1973. Reliance of the said notice in the instant suit is different than the reliance of the notice in the foreclosure proceedings. Undisputedly, in the foreclosure proceedings, the said notice dated 5.9.1973 was not relied upon and what was relied upon i.e. the notice of demand dated 20.8.1973 has not been proved. Thus, in my opinion, the foreclosure proceedings were not validly carried by the plaintiffs. It has been held in Socket Singh v. Dial Singh (1908) 9 P.L.R. 192 that the non-existence of the notice was fatal to the validity of the I foreclosure proceedings.
13. It is obligatory on the plaintiffs to prove in affirmative the due performance of I every necessary condition of the foreclosure proceedings. It has to be proved that the foreclosure proceedings were duly carried under the Bengal Regulation. It is well settled that the Court will not presume that all the formalities required by the Bengal Regulation in proceedings of foreclosure have been observed and a valid order has been passed in those proceedings. In Munshi Ram v. Nauranga and Ors. A.I.R. 1924 Lahore 176, a Division Bench of the Lahore High Court observed as under:
The Court will not presume that all the formalities required by Regulation XVII of 1806 in proceedings for foreclosure have been observed, but the mortgagee must prove affirmatively the due performance of every necessary condition. The mere fact of mortgagor's raising no objection to the validity of the notice does not warrant the presumption that the notice fulfilled all the necessary conditions. And the non-existence of the notice does not relieve the mortgagee of the burden of proving that the notice satisfied the requirements of the Regulation. On the other hand the non-existence of the notice is fatal to the validity of the foreclosure proceedings.
In Gopal Fateh Singh v. Sis Ram and Anr. A.I.R. (36) 1949 East Punjab 283, it was held that the plaintiff claiming foreclosure must prove that procedure had been duly observed. Section 8 of the Bengal Regulation clearly provides that That Judge, on receiving such written application shall cause the mortgagor or his legal representative to be furnished, as soon as possible, with a copy of it, and shall at the same time notify to him by a parwana under his seal and official signature that, if he shall not redeem the property mortgaged in the manner provided for by the foregoing section within one year from the date of the notification the mortgage will be finally foreclosed and the conditional sale will become conclusive.
From the reading of this provision, it is clear that supply of the copy of petition along with Parwana is mandatory and in absence of supply of the copy, the foreclosure proceedings conducted under the Bengal Regulation cannot be said to be valid at all.
14. In the instant case, Om Parkash, Process Server, while appearing as PW.3 has not specifically stated in his examination-in-chief that a copy of the foreclosure notice was also delivered to defendant No. 1 along with Parwana/notice. Rather, in his cross-examination, he has categorically stated that copy of the foreclosure petition was not supplied to the defendant along with Parwana/notice. His report is also on the record-in which also it has not been mentioned that the Parwana/notice was delivered to defendant No. 1 along with the copy of foreclosure petition. On the other hand, defendant No. 1 in his statement as DW. 1 has categorically stated that he did not receive any copy of the foreclosure petition. Further, in the Parwana/notice, only two enclosures i.e. copy of notice and copy of the mortgage deed, have been mentioned. On the basis of this evidence, a finding of fact has been recorded by the first appellate court that copy of the foreclosure notice was not delivered to defendant No. 1. I do not find any perversity in the said finding of fact and the same cannot be interfered by this Court in exercise of the powers under Section 100 of the Civil Procedure Code. Even otherwise, the right of redemption is an equitable right, and the mortgagee, who is enjoying the possession of the suit property, is not entitled to defeat that right except in due manner.
15. In view of the above, there is no merit in the instant appeal, as no substantial question of law is involved in it. 16. Dismissed with costs.
16. Vide order dated October 23, 1984, passed in Civil Miscellaneous No. 2595-C of 1984, the redemption money, deposited by the respondents, was permitted to be withdrawn with a stipulation that in the event of dismissal of the appeal, the respondents will be allowed time to re-deposit the same. In terms of the said order, the respondents are permitted to re-deposit the redemption money within a period of three months from the date of receipt of the certified copy of this judgment. On the re-deposit of the redemption money within this time, the appellants are directed to hand over the peaceful possession of the suit property to the respondent-mortgagor.