Madras High Court
Tmt. Mariapushpam vs Lingasamy
Author: P.T. Asha
Bench: P.T. Asha
CS.No.567 of 2007
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON :: PRONOUNCED ON ::
15.03.2021 21.04.2021
CORAM ::
THE HONOURABLE Ms. JUSTICE P.T. ASHA
CS.No.567 of 2007
1. Tmt. Mariapushpam
2. V.M. Ganesan
... Plaintiffs
Vs.
1. Lingasamy
2. D.K.D. Bala Venkatesh Kumar
3. W.S. Syed Abdur Rahman
... Defendants
Prayer: Suit filed under Order XXXVII of O.S. Rules and Order VII
Rule 1 of C.P.C. read with Order XXXIV of CPC,
a) to direct the first defendant to receive a sum of Rs.35,00,000/-
(Rupees Thirty Five Lakhs only) from the Plaintiffs herein along the due
under the Registered Simple Mortgage Deed dated 19.03.1999
(Doct.No.983/1999, District Registrar's Office, Madras South) and
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CS.No.567 of 2007
handover all the original documents of title in respect of the Schedule
mentioned property after duly cancelling the aforesaid subsisting
mortgage, within a time to be stipulated by this Hon'ble Court;
b) declare that the purported transfers effected at the instance of the
1st defendant dated 11.08.2004 and 09.02.2007 as sham and nominal
and not binding on the plaintiff's statutory redeemable right on the suit
property;
c) direct the defendants to pay the costs of the suit.
For Plaintiffs : Mr. M. Balasubramanian
For defendants :Mr. U. Karunakaran for D1
Mr. G. Vivekanand for D3
Mr. B.K. Sreenivasan for D2
JUDGMENT
The suit in question is for redemption of a Simple Mortgage Deed dated 19.03.1999 registered as Document No.983/1999, on the file of the District Registrar's Office, Madras (South) after directing the first defendant to receive a sum of Rs.35,00,000/- from the plaintiffs, being the dues under the mortgage and, handover all the original documents of title in respect of the schedule mentioned property after cancelling the subsisting mortgage within the time frame fixed by the court and for a declaration that the 2/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 transfers effected at the instance of the first defendant on 11.08.2004 and 09.02.2007 are sham and nominal and not binding on the plaintiffs' statutory redeemable right on the suit property.
2. The property in question contains two items of property comprised in survey No.227/1B, one measuring 30 cents together with superstructure situated at Jalladianpet Village, Tambaram Taluk, Kancheepuram District and the other property measuring an extent of 10 cents of vacant land in Survey No.227/3 in the same village.
3. Plaintiffs' Case:
3.1. The plaintiffs' case in brief is that the first plaintiff had purchased the schedule properties on 29.09.1993 and had put up a construction thereupon. She was running a business as a Sole Proprietary concern in the name and style of M/s. SRB Garments. The first plaintiff, had availed a loan for running the business from The South Indian Bank Ltd. She had defaulted in repaying the loan and the bank had initiated recovery 3/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 proceedings. The plaintiffs, who are husband and wife, had then decided to avail financial assistance to discharge the Bank loan and for their children's education. They approached the first defendant for loan, since he was carrying on money lending business under the name and style of M/s.Rashmi Finance. The first defendant had agreed to extend the loan on condition that the plaintiffs executed a Simple Mortgage in respect of the suit schedule property as security.
3.2. On 19.03.1999, the first defendant had extended a loan of a sum of Rs.4,00,000/- and a Simple Mortgage was created in respect of the suit property. The signature of both plaintiffs were obtained in the Mortgage Deed and the signature of first defendant alone was obtained on a Rs.100 non-judicial stamp paper. The plaintiffs were unaware about the contents of the second document. It appears that the second document was a Power Deed. This document was also registered along with the Mortgage Deed.
On 23.03.1999, the first plaintiff had given a further sum of Rs.2,00,000/- and in all a sum of Rs. 6,00,000/- was paid as loan.
4/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 3.3. As per the terms of the Mortgage Deed, the plaintiffs were liable to pay the monthly interest and towards the same, a sum of Rs.36,000/- was paid in the name of the first defendant concern, M/s. Rashmi Finance. In the year 2000, a sum of Rs.1,00,000/- was paid as interest by the plaintiffs. After that, the plaintiffs were going through a very bad financial crunch, as they had to clear the bank loan and meet their children's education and was therefore not in a position to pay the interest.
3.4. In the first week of May 2006, the plaintiffs came to learn that the first defendant had misused the Power of Attorney and created a sham and nominal Sale Deed dated 11.08.2004 in his favour in respect of the suit properties. The Sale consideration was shown as a sum of Rs.8,00,000/-
3.5. The plaintiffs would submit that prior to the execution of this Sale Deed, no notice had been issued by the first defendant to the plaintiff. Immediately on coming to know about the same, the plaintiffs had 5/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 approached the first defendant and negotiated with him and he agreed to receive the Mortgage amount with interest. Pursuant to this negotiation, on 25.05.2006, the plaintiffs had taken out three Demand Drafts totalling a sum of Rs.10,00,000/- so as to redeem the mortgage and obtain the original documents. However, the first defendant gave an evasive reply. Thereafter, on 26.05.2006, the first plaintiff lodged a complaint with the registering authority requesting them not to register any sale deed. However, Joint Sub- Registrar I, by order dated 29.05.2006, stated that they cannot stop the registration of documents without orders of Court.
3.6. Thereafter in the first week of May 2007, the plaintiffs came to know that the first defendant had sold the suit property to the third defendant, a friend of his, under a registered Sale Deed dated 09.02.2007. The plaintiffs would submit that their right to redeem the mortgage has not been extinguished as the mortgage loan has not been discharged and they can ignore the sale. Hence the suit.
4. Written Statement of first defendant:
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https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 4.1. The first defendant would take out a preliminary objection that there was no cause of action for the suit and this Court does not have the territorial jurisdiction to entertain the suit.
4.2. It is the case of the first defendant that since the plaintiffs were unable to repay the interest and the principal, they along with their Power of Attorney, the second defendant herein, had persuaded the first defendant to purchase the property and adjust the dues under the mortgage towards the sale consideration. The first defendant would contend that even initially he was reluctant to give the loan since the value of the property was only a sum of Rs.16,800/- in the year 1993 and the property was not an adequate security for the amount borrowed by the plaintiffs. However, the plaintiffs pleaded with him to extend the loan and accept the property as security.
4.3. The first defendant would submit that the suit property was situate at Tambaram, outside the jurisdiction of this Court and therefore the 7/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 suit for redemption cannot be entertained by this Court. It is his further case that it was the plaintiffs, who had taken an active role in preparing the Mortgage Deed since they were in dire need of the money. He would also deny the allegation made by the plaintiffs that the second defendant was a utter stranger to them. On the contrary, the second defendant was related to the second plaintiff and it was only through him that the second plaintiff had persuaded the first defendant to give the loan.
4.4. He would further submit that the allegation of the plaintiffs that the signature of the first plaintiff in the Power of Attorney deed was clandestinely obtained is an absolute untruth. The execution of the Power deed was witnessed by none else than the second plaintiff, the husband of the first plaintiff. The first defendant would submit that since the property values have shot up, the plaintiffs have come forward with the present suit to get back the property that they had sold.
4.5. The second defendant has more or less adopted the contentions 8/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 of the first defendant in a separate written statement filed by him and the third defendant, who is a subsequent purchaser would, apart from narrating the events leading to the execution of the Mortgage Deed and the deed of Power Attorney and the subsequent events that had taken place, submitted that he is a bonafide purchaser for value and therefore the plaintiffs are not entitled to the reliefs claimed by the them.
5. Issues Framed:
5.1. This Court by order dated 26.04.2010, had framed the following issues:
"i) Whether the plaintiffs are entitled to redeem the suit property upon the payment of a sum of Rs.35,00,000/-?
ii) To what amount the defendants are entitled to, for granting redemption of mortgage?
iii) Whether the transfers allegedly effected 9/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 by the first defendant on 11.08.2004 and 09.02.2007 without discharging the mortgage are sham and nominal and not valid in the eye of law?
iv) Whether the first defendant is entitled to create a clog on redemption by creating with a view to defeat their statutory right of redemption ?
v) To what other reliefs, the plaintiffs are entitled to, if any?"
5.2. Thereafter, since arguments had been extensively advanced on the territorial jurisdiction of the Court, this Court had framed the following additional issue on 14.03.2021:
"1. Whether this Court has jurisdiction to entertain the suit since the property in respect of which the mortgage has been created and the transfer effected is situate outside the jurisdiction of this Court."
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6.Trial :
6.1.The first plaintiff has adduced evidence as PW1 and the second plaintiff has adduced evidence as PW2. Exs.P-1 to P-22 were marked on their side. The first defendant has examined himself as DW1 and Mr. V. Muthukrishnan, who has executed Exs.P-2, General Power of Attorney and Ex.D-1 Mortgage Deed as a witness was examined as D.W.2. The second defendant was examined as D.W.3. Exs.D-1 to D-7 were marked on their side.
7. Submissions:
7.1. Mr. M. Balasubramanian, learned counsel appearing on behalf of the plaintiffs would submit that the entire cause of action for the suit which is one for redemption of a Mortgage Deed and to declare two transfers as sham and nominal and not binding on the plaintiffs arose at Chennai, where the first defendant resides and is carrying on the business. The second and third defendants also reside within the jurisdiction of this Court and the 11/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 entire transaction took place only within the jurisdiction of this Court.
7.2. The learned counsel would submit that the suit is one for redemption of the mortgage and would be covered under the Proviso to Section 16(c) of the Code of Civil Procedure. The contention of the first defendant is therefore without any basis. He would refer to the deposition of PW1 regarding jurisdiction of this Court. In response to a question that since the property is situate outside the jurisdiction of the High Court there was no cause of action for filing the suit before this Court, the first plaintiff as PW1 would reply that they are living within the jurisdiction of this Court and documents are registered in the Sub- Registrar's Office, Saidapet. That apart, all the documents were registered within the jurisdiction of this Court and therefore, this Court has the jurisdiction to hear the same.
7.3. P.W.1 during her cross examination has stated that both she and her husband have signed the documents without perusing its contents and had signed at the places indicated to them. She would also depose that she 12/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 was totally unaware as to whether the Power of Attorney deed was kept along side the Mortgage Deed when the signatures were obtained. It was only in the first week of May, 2006 that they had come to know about the Sale Deed dated 11.08.2004 under which the suit property was sold to the first defendant. Thereafter they had verified the encumbrance certificate. However, the Power of Attorney deed was not reflected in the encumbrance certificate. She would however admit that it was her signature in Ex.D3.
7.4. The learned counsel would also highlight the evidence adduced by the second plaintiff as P.W.2 which, according to him, would clearly show that the plaintiffs were in dark about the execution of the power of attorney which has been used to create the first Sale Deed dated 11.08.2004 in favour of the first defendant. PW2 would submit that the second defendant who was a witness to the execution of Exs.D2 informed them about the execution of the sale deed in favour of the first defendant and called upon them to peruse the encumbrance certificate. PW2 would depose that possession was always with them and it was never handed over to the 13/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 first defendant.
7.5. The learned counsel would submit that from the evidence of PW1 and PW2 , it is clearly evident that the first defendant has created the Power of Attorney deed without the knowledge of the plaintiffs and with an intent to snatch away the property of the first plaintiff.
7.6. The learned counsel would submit that a false statement has been included in Ex.D3 that there was no Mortgage, encumbrance, claim or charge pending in respect of the suit property, totally suppressing the Mortgage Deed created in favour of the first plaintiff.
7.7. He would also submit that despite the fact that the first item of the suit property contained a superstructure, the first defendant has deliberately described the property as vacant site. According to the learned counsel, a mere perusal of Ex.P14, Discharge Mortgage Receipt, would clearly show the manipulation and collusion between the defendants. The 14/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 receipt, shows the plaintiffs as the executants and the first defendant has been shown as the person in whose favour the receipt has been issued. This anamoly would clearly show that the document is a fabricated document and created for the sake of the suit.
7.8. The counsel would submit that the receipt does not prove discharge of the Mortgage loan dated 18.03.1999. That apart, the receipt was issued on 12.02.2007 whereas the purchase by the first defendant was on 11.08.2004. Further, the schedule of property described in Ex.P14 is only one of the property which has been sold to the first defendant and the receipt has been issued only with reference to this property. The plaintiffs would argue that although the first defendant claims to have been put in possession of the property in the year 2004, the house tax receipts till the year 2006 has been produced by the defendants. He would submit that the first defendant has come forward with a specific case that the mortgage has been discharged, by setting off the mortgage dues from the first plaintiff towards the sale consideration, however, the first defendant has not been 15/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 able to show the discharge. Ex.P14 which has been put forward as the discharge receipt being a fraudulent one cannot be relied upon.
7.9. He would also highlight the fact that a false address has been given by the second defendant as his address in the Power of Attorney deed is shown as No.175, Royapettah High Road, Mylapore, Chennai 600 004. This according to the counsel for the plaintiffs is the property mortgaged by plaintiffs 1 and 2. He would submit that the second defendant has been set up by the first defendant to grab the property in question. He would submit that in the absence of proof of discharge of the mortgage, the Mortgage Deed continues to be in force and the plaintiffs are well within their rights to seek a redemption.
7.10. The learned counsel would rely upon the following judgments in support of his contentions.
a) He would rely upon the judgment reported in "(2006) 1 SSC 129 16/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 in the case of Harbans vs. Om Prakash and Others", to buttress his contention that "once a mortgage is always a mortgage" until the mortgage is redeemed/discharged and that there cannot be any clog on the equity of redemption which the defendants have now created by executing sham and nominal sale deeds which are not binding on the plaintiffs.
b) He would rely on the judgment reported in "[AIR 2007 S.C 1828], in the case of Subhash Mahadevasa Habib vs. Nemasa Abasa Dharmadas" that where a suit for redemption of mortgage is filed in a court which had no pecuniary jurisdiction, the decree would not be void but is only voidable. He would also rely upon the proposition that when there is a defect as to the place of suing under Sections 15 to 20, the same may be waived by the parties. The defendants by participating the proceedings without raising jurisdiction as a preliminary issue has therefore waived this right.
c) Another judgment on the territorial jurisdiction relied upon by the 17/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 counsel was a judgment reported in "2013 (1 )CTC 279 in the case of Hindustan Corporation (Hyd.) Private Ltd., vs. SSB Industries Limited."
7.11. Per contra, Mr. U.Karunakaran, learned counsel making his submissions on behalf of the first defendant would contend that the plaintiffs have come forward with an absolutely false case and this Court does not have the territorial jurisdiction to entertain the suit.
7.12. He would submit that in paragraph 5 of the plaint, the plaintiffs had stated that it was the first defendant who had taken an active part in the execution and registration of the Mortgage Deed in respect of the suit schedule property. In fact, in paragraph No.5 it is stated that "the first defendant also arranged for execution and registration of the mortgage deed". The counsel submits that the choice of words used would clearly indicate that two documents have been executed by the plaintiffs on the said date. Therefore when one is the mortgage deed the other document can only be the Power of Attorney as that is the only other document executed by the 18/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 first plaintiff on the said date.
7.13. The learned counsel would draw the attention of the Court to paragraph 7 of the plaint where the plaintiffs have set out how they came into knowledge about the execution of the sale deed in favour of the first defendant. A mere perusal of the contents of this paragraph would clearly indicate that the plaintiffs were very much aware about execution of the sale deed in favour of the first defendant even prior to May, 2006, since the sale in favour of the first defendant had been done only on account of the fact that the plaintiffs were unable to repay the amount borrowed by them. In paragraph No.7 the plaintiffs have given the date of knowledge as May, 2006. In paragraph No.11, they would state that the date of knowledge was May, 2007. He would therefore submit that these contradictions are only on account of the fact that the plaintiffs have come up with a false case.
7.14. The counsel would submit that the plaintiffs have not stated as to how and when they had come to know about the execution of the sale 19/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 deed dated 11.08.2004. He would further state that in Ex.P5, the plaintiffs had taken a stand that the signature is a rank forgery. This stand has been taken by him on 26.05.2006. The learned counsel would highlight the fact that the mortgage date is executed in Tamil whereas the Power of Attorney is in English. The plaintiffs being educated persons would definitely be aware of what is written in the document and they got it registered knowing fully well the nature of the document. In fact the mortgage has been signed by both the plaintiffs where as the Power of Attorney has been signed only by the first plaintiff. When the documents, were presented for registration at the Sub-Registrar Office, the plaintiffs have once again signed in the copy sheets. Therefore, he would argue that the feigned ignorance after executing the documents is nothing but an after thought and an attempt to wriggle out of the contract since the property value has increased three fold. That apart, both the documents have been registered in the presence of the Sub Registrar and it cannot be a blank document which was registered. He would then make the submissions with reference to the lack of jurisdiction to the Court. He would argue that it is not the pecuniary jurisdiction which 20/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 is called in question but the territorial jurisdiction. The suit in question is a suit for redemption of mortgage and the property is situate outside the jurisdiction of this Court. Therefore he would submit that the suit deserves to be dismissed for want of territorial jurisdiction.
7.15. Mr. G. Vivekanand, learned counsel who has entered appearance on behalf of the third defendant would submit that the plaintiffs have very cleverly couched the relief. Instead of seeking a decree to cancel the sale deed dated 11.08.2004 and 09.02.2007, the plaintiffs have camouflaged the prayer as one to declare these transfers as sham and nominal and not binding, without describing the nature of the document. The plaintiffs ought to have asked for cancellation of these deeds and paid court fees under Section 40 of the T.N. Court Fees and Suits Valuation Act hereinafter referred to as the 'Courts Fees Act'. He would also argue that the plaintiffs had claimed that that they had got knowledge about the sale deed dated 11.08.2004 in May 2006. The suit was however filed only in the year 2007 and is therefore barred by limitation. In so far as the second prayer is 21/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 concerned, the plaintiffs through astute drafting has camouflaged a suit for cancellation of deeds into a declaratory suit. The learned counsel would submit that the suit in question is one for redemption which is a suit on land as provided under Section 16(c) of the Code of Civil Procedure. Therefore, the suit is not maintainable before this Court.
7.16. In support of his argument, he would rely on the following judgments :
a) "The Indian Spinning & Weaving Company Ltd., vs. Climax Industrial Syndicate reported in 1926(5) ILR (Bom) page 1"
b) "M. Banupriya vs M. Lakshmi and Others reported in 2013 (4) CTC page 175".
c) "K. Paranthaman vs C. Padmanabhan and Others reported in (2019) 3 CTC 228"
d ) "P . Baskar vs. M/s. Aditya Real Estates reported in (2018) I CTC Page 342"
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https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 7.17. With reference to defense regarding limitation, the learned counsel would rely on the following judgments:
a) “Rabindra Nath Samuel Dawson vs. Sivakasi and Others reported in [(1973) 3 SCC 381]"
b) “Ram Bhawan Singh and Others vs. Jagdish and Others reported in (1990) 4 SCC 309”
c) “Deena (Dead) Through LRS vs. Bharath Singh (Dead) Through LRS. and others reported in (2002) 6 SCC 336”
d) “Suryachakra Power Corporation Limited vs Electricity Department reported in (2016) 16 SCC 152”
e) “J. Vasanthi and Others vs. N. Ramani Kanthammal (Dead) reported in (2017) 11 SCC 852”.
7.18. He would also argue that proper court fee has not been paid since the plaintiffs have not sought for cancellation of the sale deeds and paid Court fees under Section 40 of the Court Fees Act but has sought for a declaration that they are null and void and paid court fees under Section 25 23/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007
(d). That apart, the plaintiffs who have come forward with a case that the power of attorney was created clandestinely has not sought to have the same cancelled, which would show the malafides of the plaintiffs in filing the instant suit.
7.19. He would submit that the sale deed in favour of the first defendant had been executed only on the instructions of the plaintiffs and with their tacit approval. Therefore, the contention now taken that they were unaware about the same is nothing but an after thought. That apart, the discrepancies in the date of knowledge and the source of knowledge would all show that the plaintiffs were aware about the transactions even on the date of the sale deed dated 11.08.2004, when it had been executed but for obvious reasons now denies knowledge.
7.20. In reply, the learned counsel for the plaintiffs would submit that Sections 16, 17 and 20 of the Code of civil Procedure will not apply to the Original Side Rules and, the defendants have participated in the 24/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 proceedings till now without taking out an application for raising the issue of jurisdiction as a preliminary issue. It could, therefore, only be stated that the defendants have waived this defense.
8. Discussion:
8.1. The plaintiffs have come forward with a case seeking redemption of the mortgage dated 19.03.1999 executed by them in favour of the first defendant. It is their case that the right to redeem the mortgage continues to be available to them and the transactions that have been created by the defendants on 11.08.2004 and 09.02.2007 is a clog on redemption which is not binding on the plaintiffs. The defendants on the other hand would submit that the right of redemption of mortgage has been extinguished as the mortgage has already been discharged. The plaintiffs who were unable to repay the interest and the loan, had requested the first defendant to purchase the property and adjust the principal and interest due under the mortgage deed towards the sale consideration. The first defendant has contended that in the year 1993 the suit property was valued at a sum of 25/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 Rs.16,800/- and that the property was not worth a sum of Rs.4,00,000/- as found in the mortgage deed dated 19.03.1999 Ex.P-7. This statement has not been refuted by the plaintiffs. Even on the date of the sale deed Ex. P3 the property was not worth the sum of Rs.8,00,000/- shown as sale consideration.
8.2. The plaintiffs would state that they have come to know about the existence of the Power of Attorney only in the month of May, 2006 when they came to know about the sale deed dated 11.08.2004. The plaintiffs' have come forward with contradictory statement in their plaint as well as in their deposition. In the plaint at paragraph No.7 the plaintiffs would state that "they came to know in the first week of May, 2006 that the first defendant herein, taking advantage of the alleged power of attorney clandestinely obtained from the first plaintiff in the name of the second defendant at the time of execution and registration of the Simple Mortgage deed dated 19.03.1999, and created a sham and nominal document of power of attorney on 11.08.2004 purported to be a sale deed for Rs.8,00,000/- 26/46
https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 behind the back of the plaintiffs herein in respect of the mortgaged property.". However in paragraph 11 the date of knowledge is shown as May 2007. The first plaintiff as PW1 would depose in her cross examination that she had come to know about Ex.D3, General Power of Attorney dated 19.03.1999 only in the first week of May, 2006 when she verified the encumbrance certificate. She would further state that she came to know about the execution of the sale deed in favour of the first defendant through the second defendant, her Power agent in the first week of May, 2006. However, PW2, the second plaintiff and husband of the P.W.1 in his cross examination would state that witness of the Mortgage deed (DW2) had informed him in the first week of May 2006 to apply and verify the encumbrance certificate. He therefore relates knowledge to this information and the encumbrance certificate. However the encumbrance certificate in question is not produced for scrutiny of the Court. In Ex.P5 complaint to the Sub-Registrar I, Saidapet, the plaintiffs would contend that the Power of Attorney is a rank forgery and the signatures therein are not the signatures of the first plaintiff. In one place, the plaintiff would state that she has 27/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 executed the Power of Attorney without knowing its contents as her signature has been clandestinely obtained while executing the Mortgage Deed. In another place, the first plaintiff would submit that the document itself is a rank forgery and the signature therein is not her signature. It is needless to state that as a plaintiff they cannot take contradictory stands but should come forward with a definite case.
8.3. As regards the date of knowledge and the source of knowledge, the plaintiffs have taken different stance at different stages. In the plaint, there is no whisper regarding the source of knowledge. In the evidence, the plaintiff would state that knowledge of the execution of the sale deed in favour of the first defendant was got through her power agent, namely the second defendant whereas her husband, the second plaintiff, as P.W.2, would depose that knowledge was through the witness who had signed the mortgage deed and the power of attorney, who has been examined as D.W.2. Interestingly, no questions in this regard has been put to D.W.2. This anomaly gains significance since it is the case of the defendants that 28/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 the sale deed in favour of the first defendant was executed only at the behest of the plaintiffs since the plaintiffs were unable to repay the principal amount or the interest. Even according to the plaintiffs, from the year 2000, they had stopped paying interest. Another factor which raises doubts about the statement of the plaintiffs is on account of the fact that despite coming to know about the sale in favour of the first defendant in the first week of May, 2006, the plaintiffs did not take any action to cancel the sale deed or the Power deed and it is only after the sale in favour of the second defendant on 09.02.2007, that the plaintiffs have come forward with this suit in the month of June 2007. This raises considerable doubt in the mind of the Court regarding the veracity of the statement of the plaintiffs that they were unaware about the execution of the sale deed in favour of the first defendant.
8.4. The suit is filed for redemption and the prayer reads as follows:
"a) to direct the first defendant to receive a 29/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 sum of Rs.35,00,000/- (Rupees Thirty Five Lakhs only) from the Plaintiffs herein along the due under the Registered Simple Mortgage Deed dated 19.03.1999 (Doct.No.983/1999, District Registrar's Office, Madras South) and handover all the original documents of title in respect of the Schedule mentioned property after duly cancelling the aforesaid subsisting mortgage, within a time to be stipulated by this Hon'ble Court;
b) declare that the purported transfers effected at the instance of the 1st defendant dated 11.08.2004 and 09.02.2007 as sham and nominal and not binding on the plaintiff's statutory redeemable right on the suit property;
c) direct the defendants to pay the costs of the suit."
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https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 8.5. Even according to the plaintiffs, the value of the property was only Rs.6,00,000/- and as per the terms of the Mortgage Deed, the said sum was repayable with interest at the rate of 24% per annum and in default, compound interest was to be charged. It is the case of the plaintiff that on 25.05.2006 they had taken three demand drafts totalling Rs.10,00,000/- to foreclose the mortgage after negotiating with the first defendant. Therefore, if the plaintiffs were to seek a redemption of this mortgage, then the plaintiffs should have calculated the amount, in keeping with the above outstanding. There is no explanation as to how the plaintiffs have arrived at a sum of Rs.35,00,000/-. This amount corresponds to the amount for which the third defendant had purchased the property from the first defendant. If the sale was a sham and nominal one, as contended by the plaintiffs, there was no necessity for them to negotiate to pay a sum of Rs.35,00,000/-. Suffice it that they repay the principal amount and the interest as set out in the Mortgage Deed dated 19.03.1999. The plaintiffs has not given any explanation for this in their pleading or in their oral evidence.
8.6. The other defense raised by the defendants is that as the suit 31/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 property is situate outside the jurisdiction of this Court, this Court does not have the territorial jurisdiction over the subject matter of the suit and the relief of redemption and declaration is outside the territorial jurisdiction of this Court.
8.7. I have hereinabove captured in a nutshell, the case of either side as set out in the pleading, evidence and arguments. I shall now therefore proceed to give my findings on the various issues. Firstly, I shall consider the additional issue.
8.7. Additional Issue:
"Whether this Court has jurisdiction to entertain the suit since the property in respect of which the mortgage is created and the transfer effected is situate outside the jurisdiction of this Court."
8.8. In order to render my findings on this issue it is necessary to 32/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 hereunder extract the prayers in the suit.
"a) to direct the first defendant to receive a sum of Rs.35,00,000/- (Rupees Thirty Five Lakhs only) from the Plaintiffs herein along the due under the Registered Simple Mortgage Deed dated 19.03.1999 (Doct.No.983/1999, District Registrar's Office, Madras South) and handover all the original documents of title in respect of the Schedule mentioned property after duly cancelling the aforesaid subsisting mortgage, within a time to be stipulated by this Hon'ble Court;
b) declare that the purported transfers effected at the instance of the 1st defendant dated 11.08.2004 and 09.02.2007 as sham and nominal and not binding on the plaintiff's statutory redeemable right on the suit property;
8.9 The defendants argue that the suit is liable to be dismissed since 33/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 this Court does not have the jurisdiction to entertain the suit as the property which is the subject matter of the mortgage is situate outside the jurisdiction of this Court. Further the relief of declaration relates to transfers that had taken place outside the jurisdiction of this Court. I shall consider the issue of jurisdiction under two heads:-
a) With regard to the relief of redemption
b) With regard to the relief of declaration.
i) Relief of Redemption:
8.10. The counsel for the first defendant had relied on the provisions of Section 16 (c) of the Code of Civil Procedure in support of his contention that a suit for redemption has to be filed in the Court within whose jurisdiction the property is situate. To analyse this let us consider Section 16 (c ) of the CPC hereinbelow extracted:
"16. Subj e ct to the pec u n i a r y or other limitati o n s 34/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 pres c r i b e d by any law, suits-
(a) for the rec o v e r y of imm o v a b l e pro p e r t y with or with o ut rent or profits,
(b) for the partitio n of imm o v a b l e pro p e r t y,
(c) for forec l o s u r e , sale or rede m p t i o n in the case of a mort g a g e of or char g e upo n imm o v a b l e pro p e r t y,
(d) for the deter m i n a ti o n of any other right to or intere st in imm o v a b l e pro p e r t y,
(e) for co m p e n s a t i o n for wr o n g to imm o v a b l e pro p e rt y,
(f) for the rec o v e r y of mov a b l e pro p e r t y actu ally unde r distr ai nt or attac h m e n t , shall be institute d in the C o u r t withi n the local limits of wh o s e juris di cti o n the pro p e r t y is situat e "
The suit property is situate at Jalladianpet Village which comes within Tambaram Taluk, Kancheepuram District, which is definitely outside the jurisdiction of this Court.
35/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 8.11. Mr. M. Balasubramanian, learned counsel appearing for the plaintiffs produced a judgement "R. Vikram Singh Rajah Bonsle vs V.S. Jagannathan reported in 2012 4 CTC page 151", in respect of his contention that the suit on a mortgage for recovery of amount is not a suit on land and would be maintainable before this Court. The above facts related to a suit for recovery of money due under the mortgage deed.
8.12. The learned Division Bench after relying upon the following earlier judgments relating to the suits on land:
1. "P.M.A. Velliappa Chettiar vs. Saha Govinda Doss, reported in [AIR 1929 Mad 721]" ;
2. "The judgment of the Federal Court in " Moolji Jaitha and Co. Vs. Khandesh Spg. and Wvg. Mills Co. Ltd reported in [AIR 1950 FC 83]" and
3. "The judgment in Southern Petrochemical Industries Corporation Ltd., vs. Durga Iron Works and three others reported [1995 (2) CTC 602]".
held that a suit for recovery of money due on a mortgage is not a suit on land.
36/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 8.13 He has also relied on the judgement of this court "Hindustan Corporation (Hyd.) Private Ltd., vs SSB Industries Limted, reported in 2013 1 CTC page 279" to state that not only should the party alleging lack of jurisdiction prove that no part of the cause of action or the parties or the subject matter of the suit is situate outside the jurisdiction of this Court but should also prove that an order passed by a court after entertaining such a suit has resulted in a failure of justice. If the relief claimed in the instant suit is taken into consideration it is seen that the plaintiffs seek a direction to the first defendant to receive a sum of Rs.35,00,000/- and hand over the documents of title after canelling the subsisting mortgage.
8.14. A reading of the provisions of Section 16 (c) of the Code of Civil Procedure would show that the suit for redemption of mortgage has to be filed in the Court within whose jurisdiction the property in question is situate. However, a proviso has been added to Section 16, which clearly says that in a suit where the relief that is sought for can be obtained through a personal obedience of the defendant, can be instituted within the local 37/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 limits of the jurisdiction of the Court in which the property is situate or within whose jurisdiction the defendant actually and voluntarily reside or carries on business. In the above background, if the relief that is sought for by the plaintiffs in the instant case are examined, it is seen that the prayer is one for a direction to the first defendant to receive a sum of Rs.35,00,000/- being the amount due under the simple mortgage deed and handover the documents of title after cancelling the aforesaid mortgage. Therefore, the relief is one where the plaintiffs pray that the first defendant should receive the mortgage money and cancel the mortgage. The relief does not seek to claim any right, title or interest over the suit property. It does not partake the character of a suit on land but is a simplicitor suit for payment of money. In the judgment reported in "[1995(2) CTC 602]- Southern Petrochemical vs Durga Iron Works and Others", which was reaffirmed in the case of "R.Vikram Singh Rajah Bonsle vs V.S. Jagannathan & Others" the Bench after referring to the tests laid down by the Federal Court in the case of Moolji Jaithi & Co. to determine whether a suit is one on land held that a suit on a mortgage is not a suit on land. Therefore, 38/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 considering the proviso to Section 16 (c) of the Code of Civil Procedure and the aforesaid judgments the suit filed is maintainable before this Court.
(ii) Relief of Declaration:
8.15. However, the second relief namely “for a declaration that the transfers effected on 11.08.2004 and 09.02.2007 be declared as sham and nominal one” is definitely a suit on land since the title of the plaintiffs over the land in question is sought to be asserted. Any decree that would be passed in this regard would definitely involve the determination of title to the property. This would fall within the category of a "suit on land". The astute drafting of the plaint by camouflaging the relief of cancellation of the sale deeds and declaration of the plaintiffs' title will not remove it from out of the category of a suit on land. This additional question of law is answered in favour of the plaintiffs with regard to the first relief and in favour of the defendants with reference to the second relief. 39/46
https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 8.16. Considering the fact that I have held that the suit for redemption is maintainable before this Court, Issue Numbers 1 and 2 have to be considered. The plaintiffs have moved this Court for a decree of redemption on the ground that the Mortgage Deed dated 19.03.1999 is subsisting and the plaintiffs' right to redeem the property is still enforceable. The defendants on the other hand would submit that the right of redemption has been extinguished when the plaintiffs had sold the property to the first defendant through her power agent under a Sale Deed dated 11.08.2004, particularly when the principal and interest due on the Mortgage Deed was the consideration for the above sale.
8.17. The plaintiffs have come forward with a case that they were totally unaware about the execution of this sale deed and it was only in the month of May 2006, that they had knowledge about the same. However, as discussed in paragraph Numbers 8.2 and 8.3, there is lot of contradiction in the evidence of P.W.1 and P.W.2 as well as their pleadings in this regard. 40/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 This coupled with the fact that the plaintiffs have not taken any steps to cancel the sale deed dated 11.08.2004 immediately would only show that the plaintiffs were very much aware about the transfer and had kept quiet. Another factor which goes against them is the fact that instead of repaying the mortgage amount and its interest, the plaintiffs have offered to repay a sum of Rs.35,00,000/-, which is the consideration for which the third defendant had purchased the suit property from the first defendant. The conduct of the plaintiffs post their coming to know about the sale deed dated 11.08.2004 falsify their claims about the knowledge of the execution of the Power of Attorney and the sale deed dated 11.08.2004. Therefore, Issue Nos. 1 and 2 are answered against the plaintiffs.
8.18. Issue No.4:
The sale deed dated 11.08.2004 is the consequence of the inability of the plaintiffs to repay the mortgage amount and interest, as a result of which they had requested the defendants to purchase the property. Admittedly 41/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 after the year 2000, no payments were made by the plaintiffs towards the interest. The plaintiffs would also submit that they were unable to continue to pay interest only on account of their liability to the bank and their need for money to meet children's education. This contention supports the first defendant's case that it was this inability that had propelled the plaintiffs to request the first defendant to purchase their property following which the sale deed dated 11.08.2004 has been executed on the instructions of the plaintiffs. Therefore, the plaintiffs cannot plead that the first defendant had created a clog on redemption. This issue is also answered against the plaintiffs.
8.19. Issue No.3.
As regards Issue No. 3, the said transfers are in respect of the property situate outside the jurisdiction of this Court and considering the fact that the additional issue has been answered in favour of the defendants, I do not intend to give my findings on merits. In fine, the plaintiffs having 42/46 https://www.mhc.tn.gov.in/judis/ CS.No.567 of 2007 failed to prove their case, are not entitled to any decree. Consequently, the suit is dismissed with costs.
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Internet : Yes/No
Index :Yes/No
Speaking / Non-Speaking
mrn
List of Witnesses examined on the plaintiffs' side:-
PW1- Mariapushpam PW2- V.M. Ganesan List of Exhibits marked on the Plaintiffs' side:-
Ex.P-1 - Sale deed dated 29.09.1993
Ex.P-2 - General Power of Attorney dated 19.03.1999
Ex.P-3 - Sale deed dated 11.08.2004
Ex.P-4 - Demand Drafts dated 25.05.2006
Ex.P-5 - Request letter and Proceedings of Joint Registrar-I
dated 29.05.2006
Ex.P-6 - Sale deed dated 09.02.2007
Ex.P-7 - Mortgage deed in favour of Lingasamay
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dated 18.03.1999
Ex.P-8 - House Tax Receipts 2003-2005
Exs.P-9, P-10 and P-11 - E.B. Advise slip and receipt- 1999
Ex.P-12 - Proceedings of Joint Registrar -I dated 29.05.2006
Ex.P-13 - Letter from I.G. of Registration dated 08.02.2010
Ex.P-14 - Discharge mortgage Receipt. (Registered after two sale
deeds) dated 12.02.2007
Ex.P-15 - Deed of Cancellation of Power of Attorney dated
05.01.2009
Ex.P-16 - Public Notice dated 22.08.2007
Ex.P-17 - Pamphlets dated 28.07.2007
Ex.P-18 - Lawyer Notice dated 31.01.2008
Ex.P-19 - FIR dated 01.08.2007
Ex.P-20 - FIR dated 14.02.2008
Ex.P-21 - Acknowledgement Card dated 15.09.2000
Ex.P-22 - Invitation - 2010
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List of Witnesses examined on the Defendants' side:-
DW1- D. Lingasamy DW2- V. Muthukrishnan DW3- D.K.D. Bala Venkatesh Kumar List of Exhibits marked on the defendants' side:-
Ex.D-1 - Sale deed dated 29.09.1993
Ex.D-2 - Mortgage Deed dated 18.03.1999
Ex.D-3 - General Power of attorney dated 19.03.1999
Ex.D-4 - Notice to produce dated 28.09.2011
Ex.D-5 - Order in Crl.M.P.No.3256 of 2009
Exs.D-6 and D-7 - E.B. Receipts - 15.06.2006 and 13.11.2006
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P.T. ASHA. J,
mrn
Pre-Delivery order in
CS.Nos.567 of 2007
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