Kerala High Court
B.Madhavi Amma vs K.Karunakaran Nair on 3 February, 2011
Author: S.S.Satheesachandran
Bench: S.S.Satheesachandran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
SA.No. 111 of 1998()
1. B.MADHAVI AMMA
... Petitioner
Vs
1. K.KARUNAKARAN NAIR
... Respondent
For Petitioner :SRI.K.P.SREEKUMAR
For Respondent :SRI.P.KESAVAN NAIR
The Hon'ble MR. Justice S.S.SATHEESACHANDRAN
Dated :03/02/2011
O R D E R
S.S.SATHEESACHANDRAN, J.
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S.A.No.111 of 1998
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Dated this the 3rd day of February, 2011
JUDGMENT
Plaintiffs in a suit for redemption, O.S.No.122/84 on the file of the Additional Munsiff's Court, Nedumangad are the appellants. Both the courts below have negatived their claim for redemption of the suit property, finding merit in the contentions taken by the respondent/defendant denying the mortgage, and of claiming anterior possessory right over the suit property, more than a decade before the alleged mortgage, by way of trespass, with a further plea of prescribing title over the same by adverse possession. Before the lower appellate court, the plaintiff had moved an application for amending the plaint to seek an alternative relief for recovery of possession on the strength of their title, but that was also turned down as belated while dismissing their appeal, and confirming the dismissal of the suit by the trial court. S.A.No.111 of 1998
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2. Short facts necessary for consideration of the substantial questions of law raised for disposal of the appeal can be summed up thus:
Suit property having an extent of 8 cents was obtained by the 1st plaintiff under Ext.A6 partition deed. Second plaintiff is her daughter and 3rd plaintiff, her son in law. Pursuant to Ext.A6 partition deed, the 1st plaintiff executed Ext.A3 mortgage deed over the suit property, for a sum of ` 5,000/-, in favour of the defendant and put him in possession of the property. A term of 6 years was fixed under the deed after which right to redeem was to commence. Subsequently, she executed A2 settlement deed in favour of her daughter, 2nd plaintiff, authorising her to redeem the property, and the 2nd plaintiff in turn executed Ext.A3 sale deed authorising her husband 3rd plaintiff, to redeem the property. When the period fixed was over, alleging that the defendant has committed damage to the tune of ` 2,000/- and the improvements S.A.No.111 of 1998 :: 3 ::
effected by him for digging a well, that alone, was ` 100/-, the plaintiffs, all of them together, laid the suit for redemption, seeking adjustment of the sum due as damages in the mortgage price payable to the defendant.
3. The defendant resisted the suit claim disputing the mortgage (Ext.A1) and contended that the property belongs to him. He claimed of obtaining possession over the property by trespass in 1965, and of conducting a tea shop in the building put up by him.
Ext.A3 mortgage is a fraudulent document created by the plaintiffs to claim right over the property, was his further case. He also contended that the 1st plaintiff has not obtained right over the property under Ext.A6 partition deed. Impeaching Ext.A3 mortgage deed as not binding on him and disowning his liability to surrender the property as a mortgagee, he further contended that Ext.A1 is the product of fraud and impersonation. In the alternative, it was contended that if at all the plaintiffs S.A.No.111 of 1998 :: 4 ::
have any right over the suit property, their rights have been lost by adverse possession and limitation by his continuous hostile possession over the property from 1965 onwards. Claim for a sum of ` 20,000/- towards value of improvements was also canvassed, if for any reason, the property is found to be redeemable.
4. The trial court, on the pleadings of the parties, raised the following issues:
(i) Whether the plaintiffs are entitled to redeem the mortgage, and if so, the claim of damages raised, or any part thereof, is sustainable?
(ii) Whether Ext.A3 mortgage deed is binding on the defendant?
(iii) Is the suit barred by limitation and adverse possession?
(iv) Has the defendant any special right over the property and
(v) What, if any, is the value of improvements?
5. On the materials tendered by both sides, which consisted of Pws.1 to 5, Exts.A1 to A11 for the S.A.No.111 of 1998 :: 5 ::
plaintiffs, DWS.1 and Exts.B1 to B15 for the defendant and Ext.C1 report prepared by the advocate commissioner, after conducting local inspection over the suit property, the trial court came to the conclusion that the defendant had come into possession long before Ext.A3 mortgage and that there was no clinching evidence to conclude that he is a mortgagee under Ext.A1 deed. His possession was not under Ext.A1 deed, but by trespass over the property much earlier, as contended, was found more probable to the trial court, which concluded that the plaintiffs are not entitled to redeem the property as if the defendant was a mortgagee over the property. Since there was no prayer for recovery of possession on the basis of title, the trial court held that the suit has to be dismissed. The trial court also held that the materials tendered in the case supported his claim of special right over the property, as it indicated that he had constructed a building, dug a well, and effected various improvements in the property. S.A.No.111 of 1998
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Though the question of title of the plaintiffs over the property was not cast as an issue in the suit, the trial court examined that also to consider the plea of adverse possession and limitation raised by the defendant and, then, upholding such challenges mooted by the defendant to resist the redemption, the suit was dismissed.
6. The lower appellate court, in the appeal preferred by the plaintiffs against the dismissal of their suit, turned down their request for amendment of the plaint to seek recovery of possession on the strength of their title, rejecting the application moved in that regard as belated. Re-appreciating the materials tendered in the case, that court concurring with the view of the trial court, confirmed the dismissal of the suit.
7. Substantial questions of law raised for consideration in the appeal are thus:
(i) Has the defendant pleaded and proved his case of adverse possession and limitation? S.A.No.111 of 1998
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(ii) Are not the plaintiffs entitled to get recovery of property on the strength of their title, even if the mortgage deed in favour of the defendant is not proved.
(iii) Can the production of the licence to conduct tea shop in the schedule building and possession over the building from 1973 to 1984 to prove adverse possession and limitation.
(iv) Are not the plaintiffs in the case entitled to rely on the legal presumption that possession follows title?
(v) Is the appellate court justified in dismissing the petition for amending the plaint on the basis of the documents produced in the case?
(vi) Is the court justified in rejecting the petition for production of fresh documents if the said documents are vital and a just decision demands their acceptance in evidence?
8. I heard the counsel on both sides. Both the courts below have mis-appreciated the facts and circumstances involved, and also the materials tendered S.A.No.111 of 1998 :: 8 ::
in the case, and the claim of the appellants/plaintiffs for redemption of the property was negatived placing unmerited value on the defence projected by the respondent/ defendant to deny the execution of Ext.A3 mortgage deed, is the submission of the learned counsel for the appellants. Even assuming there is some force in the plea of the defendant to deny Ext.A3 mortgage, where the plaintiffs have produced Ext.A6 partition deed showing the pre-existing title of the 1st plaintiff over the suit property, the lower appellate court should have allowed the application moved for amendment of the plaint, to seek recovery of possession of the property on the strength of their title, according to the counsel. Dismissal of that application, by the court below holding it as highly belated, it is submitted, is totally unjustified especially where the trial court, without raising an issue over title, rendered an adverse decision against the plaintiffs upholding the claim of adverse possession canvassed by S.A.No.111 of 1998 :: 9 ::
the defendant with a further finding that the suit claim for redemption is barred by limitation. Plea raised by the defendant denying the execution of Ext.A3 mortgage, and, at the same time, setting forth a claim of adverse possession and limitation, disputing the title of the plaintiffs over the suit property, should have been found to be unworthy of any merit, and the suit claim for redemption proved by the materials deserved only to be allowed, is the submission of the counsel.
9. Per contra, contending that no interference with the concurrent decision rendered by the two courts below that the plaintiffs are not entitled to redeem the property and that the defendant has established his right over the property, as having prescribed title by adverse possession, the learned counsel for the respondent submitted that on the materials placed, the plaintiffs have miserably failed to show that the defendant was put in possession of the property under Ext.A1 mortgage deed. S.A.No.111 of 1998
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His possession over the property long prior to Ext.A1 mortgage deed asserting his title over the same, is demonstrated by the materials tendered in the case, is the submission of the counsel. When Ext.A1 mortgage was denied by the defendant contending that his possession is not as a mortgagee, and that such deed is the product of fraud and impersonation, it is submitted, burden was upon the plaintiff to prove that the defendant is in possession of that property under Ext.A1 mortgage deed. The evidence of Pws.2 and 3, the document writer and an attester respectively to Ext.A3, examined by the plaintiff, according to the counsel, as rightly found by both the courts, not only does not assist the plaintiff in proving the possession of the property by the defendant as a mortgagee under the deed, but, on the contrary, support the case of the defendant that after committing trespass, at least one decade before the mortgage, he had come into possession of the property and continued to be in S.A.No.111 of 1998 :: 11 ::
possession and enjoyment effecting valuable improvements, including the construction of a building, asserting his hostile animus to the real owner. Both the courts below have rightly and correctly held that the defendant has prescribed title over the property by adverse possession and limitation, and the claim of the plaintiffs even assuming that they have any title, according to the counsel, is barred by limitation. No interference with the concurrent findings made by the courts below, on the proved the facts and circumstances involved and the materials placed in the case, is called for, is the submission of the counsel. The dismissal of the application moved for amendment of the plaint by the lower appellate court also does not call for any interference in the given facts of the case and, more so, where the suit commenced more than three and a half decades ago is the further submission of the counsel to contend that this appeal deserves only to be dismissed. S.A.No.111 of 1998
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10. The defendant in the suit, who is shown to be a mortgagee in possession of the suit property under a registered mortgage deed, Ext.A1, has denied his status as a mortgagee, contending that his possession over the suit property commenced much earlier as a trespasser, and he had put up constructions in the property and continued in possession denying the title of the owner, whoever he may be, and by such continuance for the statutory period he has prescribed title over the property by adverse possession. Suit being one for redemption of the mortgage covered by a registered deed Ext.A1, what is the burden cast upon the plaintiffs who claim to be the mortgagors to sustain their right to redeem it by way of a decree from the court when resistance thereof is put up by the defendant disputing the mortgage and setting up title to himself contending that he had been in possession long prior to the mortgage and the creation of the mortgage is only a fraud by the plaintiffs to defeat his valuable S.A.No.111 of 1998 :: 13 ::
interests in the property, is the pivotal question emerging for consideration in the case. Have the plaintiffs to prove their title over the suit property and then seek recovery of possession of the property, where the defendant disputed his status as a mortgagee, on the strength of their title, is yet another question that may demand an answer in the facts involved. As adverted to earlier, the plaintiffs had sought for an amendment of the plaint to claim recovery of possession on the basis of their title at least before the lower appellate court, but that request was denied holding that it was belated. Though the suit was one for redemption and no issue was raised on the basis of the contention of the defendant as to having prescribed title by adverse possession the trial court had entered a finding that the plaintiffs had lost their title upholding the claim of adverse possession of the defendant. Such being the situation, at the outset, it has to be stated whether or not the request by the plaintiffs for amendment sought for S.A.No.111 of 1998 :: 14 ::
is warranted in the case, the lower appellate court was not at all justified in turning down the amendment application moved in appeal by the appellants/ plaintiffs for the reason that it was 'belated'.
11. Perusing the judgments rendered by the trial court as also the lower appellate court, it is seen that the tenability of the objection canvassed by the defendant disputing a registered mortgage deed over the suit property has not been appreciated and considered with reference to the law applicable to mortgages and the rights and liabilities of the mortgagor and mortgagee as covered by the Transfer of Property Act. Leaving aside the question whether the denial of the mortgage by the mortgagee would warrant amendment and conversion of a suit for redemption into one for recovery of possession on the strength of title, how far and to what extent and under what circumstances a person in possession of a mortgage holding, who is shown to be the mortgagee under a S.A.No.111 of 1998 :: 15 ::
registered instrument, can set up a title adverse to the mortgagor and if such a defence is raised in a suit for redemption, how it has to be analysed has to be examined.
12. Ext.A1 is the registered mortgage over the suit property which, prima facie, discloses that for a mortgage price of ` 5,000/- obtained as a loan from the defendant, as a security thereof fixing a redemption period of 6 years, the defendant was put in possession of the property. Ext.A1 deed is imputed as a fraudulent document created by the plaintiffs to defeat his interests over the property is the case of the defendant, contending that he is in possession of the property not as a mortgagee, but as a trespasser which had commenced long prior to Ext.A3 mortgage. Ext.A3 mortgage is executed by the 1st plaintiff wherein her antecedent title over the property obtained under Ext.A6 partition deed is spelt out. In view of the denial of the mortgage by the S.A.No.111 of 1998 :: 16 ::
defendant, Ext.A6 partition deed had also been produced by the plaintiffs. In addition, plaintiffs have also produced Ext.A4 series evidencing payment of revenue charges over the property from 1965. Pursuant to Ext.A1, mortgage, the transfer effected in favour of the 2nd plaintiff and later from that plaintiff to the 3rd plaintiff, as alleged by the plaintiffs, is proved by producing Ext.A2 settlement deed and Ext.A3 sale deed. Ext.A7 is another mortgage deed obtained from the 3rd plaintiff and another by the very same defendant in respect of an adjoining property. The plaintiffs also tendered materials showing that the defendant had moved an application before the Tahsildar (Ext.A8) to effect mutation in his name over the property and a notice thereof was issued to the patta holders, the plaintiffs seeking their objections. Ext.A9 is the copy of the notice received by the plaintiffs from the Taluk Office on Ext.A8 application moved by the defendant as aforementioned. Over and above these S.A.No.111 of 1998 :: 17 ::
documents, to substantiate that they have title over the property and the defendant is only a mortgagee, plaintiffs produced Ext.A10 and Ext.A11 building tax receipt and demand notice from the Local Authority in respect of the building, which is made mentioned of in Ext.A3 mortgage deed. As against the documentary materials tendered by the plaintiffs, the defendant produced D1 to D15 to sustain his case that he has been in possession over the suit property from 1965 onwards and it was by way of trespass denying the title of the real owner. Those materials tendered by the defendant have been relied by both the courts to uphold his claim of being in possession as a trespasser of the suit property and not as a mortgagee under Ext.A3 mortgage deed.
13. What is the value of Ext.A1 registered mortgage deed and how far a denial of such mortgage deed by the defendant where he is shown to be a mortgagee under such instrument is the primary question S.A.No.111 of 1998 :: 18 ::
that has to be considered to examine the suit claim for redemption. The very purpose of the Registration Act is to guard against the fabrication of false documents of title from time to time. The real purpose of registration is a check to provide good evidence of the genuineness of written instruments. It is intended to provide a guarantee of the genuineness of the instrument and further to give notice to persons as to the dealings with respect to a property. In a case where execution of the document is a matter in issue between the parties to that instrument, registration, by itself, is not sufficient to prove its genuineness, nor dispense with necessity of independent proof. As if the execution of the instrument Ext.A3 mortgage deed was under challenge in the case, it is seen, both the courts have proceeded to appreciate the evidence let in by the plaintiffs who had taken steps to examine Pws.2 and 3, the scribe and attester to that instrument to show the genuineness of the transaction S.A.No.111 of 1998 :: 19 ::
covered by that instrument. PW.3 is none other than the elder brother of the defendant. Though he admitted his signature as attester to Ext.A3 mortgage deed, he supported the contentions of the defendant as to having possession much prior to the document and, in fact, not under the instrument. PW.2, the scribe, who prepared the original of Ext.A3 mortgage deed, in his evidence stated that the defendant was not present when the mortgage deed was prepared, and, the details were furnished at his office. He had specifically asserted that the mortgage deed was signed by the executant, the 1st defendant and also the attesters at his office. However, both the courts below found considerable merit in the case canvassed by the defendant that the mortgage deed was executed without his knowledge, placing emphasis on the statement of PW.2 scribe that he was not present when the document was prepared and also that of the brother of the defendant, one of the attesters to the mortgage deed that S.A.No.111 of 1998 :: 20 ::
the defendant continued in possession much earlier to the deed as a trespasser. To say the least, the approach made by the courts below in examining the registered mortgage deed, the execution of which is proved by the evidence of Pws.1 to 3, on the circumstances referred to above as deposed to by Pws.2 and 3, to consider the question involved arising from the denial of the defendant disputing his possession over the property as a mortgagee, but as a trespasser, is egregiously erroneous and in fact against the settled principles of law. As indicated earlier, the validity of the mortgage deed over the suit property duly registered under the Registration Act, and the legal presumptions attached thereto following from the registration certificate endorsed on the instrument, with the evidence proving its execution by the mortgagor, was not even taken note of by the courts below, both of them, while the challenge against that deed by the defendant was upheld on the innocuous S.A.No.111 of 1998 :: 21 ::
circumstances presented in the evidence of Pws.2 and 3. The fact that the document was duly executed and endorsed with the certificate of registration, is prima facie evidence that the requirements of the Registration Act have been complied with, and, after such endorsement, the burden of proving any act or omission, which would invalidate the registration rests on the person who challenged the registered deed. The distinction between a fraudulent registration and a challenge against the contents of a registered document is quite different and further the legal approach in impeaching a registered instrument on such distinct ground, differ from one another. So far as the challenge against the fraudulent registration, it is a case where the challenge is that the instrument itself is void. But in the case of a challenge as to contents of a registered instrument, whatever be the reason thereof, the instrument, at the most, is voidable at the instance of the party, who sets up such a challenge. S.A.No.111 of 1998
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The party, who seeks to impeach the registration of a document, upon him is the burden of proving the facts which he allege to invalidate that instrument. So far as the execution of a mortgage under a registered instrument is concerned, the presence of the mortgagee or his acceptance of the mortgage deed is not warranted. So this was a case where registration of Ext.A3 mortgage deed as required by law and execution of such instrument by the mortgagor, the 1st plaintiff, has been proved, shifting the burden on the defendant to substantiate his challenge that such registered instrument was, in fact, a fraud practised to defeat his valuable rights over the suit property, which according to him, came to his possession by trespass at least 11 years before Ext.A3 mortgage deed. Though he is alleged to have trespassed over the suit property a decade before the execution of Ext.A3 mortgage deed, he has not pleaded as to who is the owner of such property, against whom by continuous and S.A.No.111 of 1998 :: 23 ::
uninterrupted possession, a plea of adverse possession by title had been set up in the suit. Assuming that he was a trespasser as pleaded, still he could acknowledge the title of the real owner and obtain a mortgage with the liability to be redeemed on payment of the mortgage price. So much so, the challenge raised that he was a trespasser to the property would not improve his case especially where the statutory period to prescribe title by having continuous uninterrupted possession from the date of trespass had not ben completed as and when Ext.A3 mortgage deed was executed, if it is shown to be genuine, and his possession after such mortgage was only as a mortgagee of the land. Plaintiffs have proved the execution of Ext.A3 mortgage deed and further their antecedent title over the suit property which was mortgaged under that instrument. As against the claim of the plaintiffs proved, with respect to execution and their antecedent title over the mortgage holding, what has S.A.No.111 of 1998 :: 24 ::
been tendered by the defendant are only materials to sustain that his continuous possession as a trespasser over the property from 1965 onwards. He was a trespasser over the property before the registered mortgage was executed in his favour would not in any way assist him unless he is able to prove and establish that the execution of Ext.A3 mortgage deed was a fraud committed by the 1st plaintiff, the mortgagor, to defeat his valid rights over the property. His possession was not under the mortgage despite the execution of the registered instrument necessarily has to be established showing that the mortgage deed is fraudulent and not binding on him. On that aspect, it is seen, other than the denial of the registered mortgage deed disputing knowledge over the same, the defendant has not produced any worth mentioning evidence in the case. Even the materials tendered by him would disclose that he had been conducting a hotel by name 'Janatha Hotel' at a S.A.No.111 of 1998 :: 25 ::
far away place from the mortgaged land previously and, later, it was shifted to the suit property covered by the mortgage. B1 is a registration certificate issued by the District Labour Officer in respect of his tea shop 'Janatha Hotel'. That certificate was issued after the execution of Ext.A3 mortgage deed, i.e., on 26.11.1975 with the fee paid over the renewal for the previous years as well. Ext.B1 in no way assist the defendant in showing that he conducted the tea shop in the suit property before Ext.A1, leave alone his possession over such property. Ext.B2 is an order form dated 26.6.1968 for the purchase of a fan. The name and address of the defendant with respect to a hotel is shown under that document hardly improves his claim of having possession of the suit property before the mortgage. B3 is a receipt evidencing payment of the charges payable under the PFA Act. That receipt is dated 6.7.1973. There is nothing in that document indicating that he was then operating the tea shop in the suit S.A.No.111 of 1998 :: 26 ::
property. B4 is a demand notice issued by the Executive Officer of the Local Authority dated 15.5.1975 directing the defendant to take a licence under the Prevention of Food Adulteration Act to operate the tea shop. That notice dated as above is indicative that it was after Ext.A3 mortgage deed. Ext.B5 is a receipt dated 12.11.1975 as to payment of some charges to the Local Authority in relation to his tea shop. Particulars of the shop or where it is located are not borne out by the receipt. Ext.B5(a) is a similar receipt bearing the building No.KP VII/45 is mentioned. Exts.B6 to B14 are some receipts and communications received by the defendant in his capacity as the manager of a hotel in some of which the name of the hotel as 'Janatha Hotel' is also made mention of. Ext.B15 is a copy of the plaint in another suit which was also one for redemption filed by the 3rd defendant with another against the very same defendant over a mortgage holding admittedly enjoyed by the defendant, situate S.A.No.111 of 1998 :: 27 ::
beside the present suit property under a registered mortgage of the year 1976 obtained from the plaintiffs in such suit.
14. None of the documents produced by the defendant assist him in any way to show that Ext.A1 was the product of fraud and his possession over the property was not as a mortgagee under that deed. Denial of that mortgage and a claim that he had anterior possession as a trespasser by themselves would not advance his case of having legal possession over the property independent of the registered mortgage unless he is able to show that the deed had been brought into existence by fraud, and more so, when the materials tendered by the plaintiffs unerringly establish, they have title over the property which was mortgaged under Ext.A1 deed to the defendants. Other than tendering some materials to show that he had been in possession of the mortgaged property earlier which, by itself, would not affect the validity of the S.A.No.111 of 1998 :: 28 ::
registered mortgage, the defendant has not placed anything, nor brought in any circumstance even to raise a suspicion that the execution of Ext.A1 registered mortgage in his favour by the 1st plaintiff was a fraudulent registration, to defeat his interests over the suit property. Both the courts below, without adverting to and analysing the incidents of rights and obligations flowing from a deed bearing a certificate of registration with the legal presumptions arising thereunder, and overlooking that the plaintiffs have established their antecedent title over the mortgaged property, which is not shown to have been impaired in any manner, directed its enquiry on irrelevant and inconsequential questions to determine whether the plaintiffs are legally entitled to redeem the mortgage covered by Ext.A1 deed. In fact, in the given facts of the case, there was no reason for the plaintiffs to seek any amendment of the suit to have recovery of possession on the strength of their title where the burden had shifted S.A.No.111 of 1998 :: 29 ::
upon the defendant to rebut the presumption available under Ext.A3 mortgage deed in favour of the plaintiffs, which is further proved by the materials tendered showing their antecedent title. As there was total paucity of evidence to sustain the challenge of the defendant that Ext.A1 deed was a fraudulent registration, the irresistible conclusion follows that he is a mortgagee in possession of the suit property under Ext.A1 deed mortgage deed. He being a mortgagee under Ext.A1 deed, it follows that his plea of adverse possession raising a claim of trespass over the property long prior to the mortgage, that too without disclosing, who is the owner of the property, nor even admitting the title of the plaintiffs deserve only an out right rejection. "Once a mortgagee ever a mortgagee" applies with full force, in the case of the defendant, and the contradictory and conflicting claims canvassed by him repudiating his status as a mortgagee disputing Ext.A3 mortgage deed are devoid of any merit.
S.A.No.111 of 1998
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15. Since the defendant has not claimed the status of a mortgagee and disputed the title of the mortgagor, plaintiffs over the suit property, the question of value of improvements, if any, effected by the mortgagee defendant was not raised and so much so, not considered by the courts below. In the given facts of the case, since such a claim has not been raised, needless to point out, the defendant is not entitled to such benefit, though he has been found to be a mortgagee in possession negativing his case disputing such status. As nothing more is required to be done by way of final decree proceedings in the present suit, other than the deposit of the mortgage price to terminate the relationship of mortgagor-mortgagee between the parties, a decree is passed allowing redemption of the suit property on deposit of the mortgage price fixed under Ext.A1 deed. Plaintiffs are directed to deposit the amount before the court below, within a period of three months from today. S.A.No.111 of 1998
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On depositing the mortgage price, the plaintiffs are allowed to redeem the property in execution of the decree through court.
Reversing the judgment and decree of the courts below, the appeal is allowed, directing both sides to suffer their respective costs.
Sd/-
(S.S.SATHEESACHANDRAN) JUDGE sk/-
//true copy// P.S. to Judge.