Orissa High Court
Boddu Ramulu vs Gokarla Ramaswamy And Ors. on 3 December, 1969
Equivalent citations: AIR 1971 ORISSA 58
JUDGMENT R.N. Misra, J.
1. The defendant No. 1 has come in appeal against a confirming judgment of the learned Subordinate Judge, Berhampur in a suit for redemption of mortgage and for mesne profits.
2. One Kamaya was the admitted owner of the property in suit. The plaintiffs are his heirs. The genealogy appended below would show the relationship of the plaintiffs inter se and their relationship with Kamaya.
KAMAYA
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____________________________________|___________________
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Pappana Ramaswami (p.1) Balaji Pottudu (D.2)
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(daughter) = Paramma (P.2)
Mutyalu (P.5) |
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Krishnamurty (P.4) Rajulu (P.3)
In 1942 Kamaya is alleged to have mortgaged the suit property measuring 37 decimals, to defendant No. 1 to secure a loan of Rs. 100/-. The mortgage is said to be usufructuary and it was stipulated that the usufructs should be enjoyed for liquidation of the loan and the cist had to be paid out of it. It is alleged that in 1962, plaintiff No. 1 offered repayment of the loan and demanded release of the land and delivery of possession. It was refused and thereupon the suit has been filed.
3. The defendant No. 1 alone contested. According to him, the land was sold by Kamaya about 25 years back under an oral sale and possession was conveyed. Plaintiffs have absolutely no interest and the defendant No. 1 has been in possession as full owner for about 25 years. The defendant No. 2 did not enter appearance and became ex parte.
4. The learned trial Judge found that the suit property was mortgaged by Kamaya to defendant No. 1 and he further found that as the defendant No. 1 was in possession for more than 15 years, under the provisions of Section 17 of the Orissa Money Lenders Act, the mortgage must be taken to have been satisfied. He, therefore, decreed the suit.
5. The lower Appellate Court on a reassessment of the materials, affirmed the decree. It is against this concurrent judgment of the lower Appellate Court that the second appeal has now been filed.
6. Mr. Murty, learned counsel for the defendant No. 1-appellant, raises one single question, namely, that the principal money accrued being Rs. 100/-, the mortgage would have been effected only by a registered instrument signed by the mortgagor and attested at least by two witnesses and since no such document has never been executed, a suit for redemption is not maintainable.
7. Section 59 of the Transfer of Property Act prescribes :--
"Where the principal money secured is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of title deeds can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.
Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by a registered instrument signed and attested as aforesaid, or (except in case of a simple mortgage) by delivery of the property." The contention raised by Mr. Murty is to the effect that if a statute prescribed a particular act to be done in a specified way, that act cannot be done in any other way and yet avail in law. Before examining the legal aspect, it would be proper to refer to the respective cases made out in the pleadings. In paragraph 2 of the plaint, it is averred as follows:
"(2) Late Gokarla Kamayya had acquired some landed properties during his lifetime and he was in khas possession of the same for some period. That in or about 1942, the said Kamayya had mortgaged with possession about 37 cents of his land to the Defendant No. 1 for a sum of Rs. 100/- and delivered possession of the mortgaged property to him.
.....
(3) The understanding between late Gokarla Kamayya and the defendant No. 1 was that the latter should enjoy the usufruct of the suit property till the principal amount of Rs. 100/- is paid back and that the latter alone should pay the rent, that is land revenue, due to the then Zamindar of Parlakimedi."
The defendant No. 1 in his written statement stated:
3. The recitals in para 3 of the plaint are wholly incorrect and false. It is not true to say that late Kamayya mortgaged the land with possession to this defendant; the lands were sold to this defendant's father by late Gokarla Kamayya for himself and his sons more than 25 years ago, since the lands are in enjoyment of the family of the defendant No. 1 in their own right. The 1st defendant's family thus remained in open enjoyment as purchasers and not as mortgagees; the lands are dry lands; field ridges were erected by this defendant's father and mother; the assessment for these lands is paid by this defendant and his father before him in their right as purchasers and not as mortgagees. These lands were selling for at Rs. 2/- to Rs. 3/- per cent then; the money paid was the sale price. The plaintiffs have now come forward with this false claim the value of the lands having risen up since."
8. The point for examination is as to whether in view of the legal provisions, it is open to the plaintiffs to sue for redemption on the basis of an oral mortgage. Such a question has become the subject-matter of judicial consideration in several cases and as it appears, courts in this country have taken the view that redemption cannot be granted on the basis of an oral mortgage. The earliest case in point of time that could be noticed is the case of Ma Htwe v. Maung Lun, AIR 1917 Low Bur 128 (FB). The facts of the case as are available from the order of Reference of Fox, C. J. are almost similar to the facts of the present case. For convenience, I proceed to extract the facts of that case here :
"This is one of numerous cases in which a plaintiff sues a defendant in possession seeking to redeem land on the ground of its having been mortgaged only and the defendant resists the suit on the ground that the land had been sold out right to him. The transaction took place long after Sections 54 and 59 of the Transfer of Property Act had been brought into force in lower Burma. The amount advanced on mortgage or according to the defendant's version of the transaction the price paid was Rs. 150/-. No instrument in writing embodying the terms of the transaction was executed and registered; consequently the plaintiff could not prove the mortgage nor could the defendant prove a sale to him."
Mr. Fox, C. J. referred the following question to the Full Bench:
"In a suit for redemption in which the defendant denies the mortgage alleged by the plaintiff and sets up a sale to him can the plaintiff recover possession when by reason of the provisions of the Transfer of Property Act the plaintiff cannot prove the mortgage sued on and the defendant cannot prove the sale relied on by him."
The Full Bench held that relief could not be given. The same point again came up for consideration before another Full Bench of the same High Court in the case of Maung San Min v. Maung Po Hlaing, AIR 1925 Rang 291. The question that the Full Bench was called upon to answer was :
"When a plaintiff alleges that possession of immoveable property has been given to the defendant as security for a loan of Rs. 100/- or upwards, but without the execution of any registered instrument, is oral evidence admissible to prove the transaction."
While giving the answer to the said question, Robinson, C. J. indicated :
"The reason why different principles apply to the admissibility of evidence to prove a contract to mortgage and a contract to sell is that in the latter the defendant is entitled to claim specific performance and in former case, he is not. The answer to the question referred is in the negative........".
9. A similar question again came before another Full Bench of the Rangoon High Court in the case of Ma Kvi v. Maung Thon, AIR 1935 Rang 230 (FB):
"Where a person has been put into possession of land as usufructuary mortgagee, and the mortgage is invalid for want of a registered document, is the true owner of the land in a suit for possession entitled to recover possession without payment of the amount of the debt?"
Page, C. J. speaking for the Court quoted with approval Lord Russell in 58 Ind App 91 = (AIR 1931 PC 79):
"......... an English equitable doctrine affecting the provisions of an English statute relating to the right to sue upon a contract, should be applied by analogy to such a statute as the Transfer of Property Act and with such a result as to create without any writing an interest which the statute says can only be created by means of a registered instrument, appears to their Lordships, in the absence of some binding authority to that effect to be impossible .........".
and proceeded to conclude that relief could not be given to the plaintiff. It appears, this type of disputes have been frequent in Burma and a similar matter again came up for consideration before another Full Bench of the Kangoon High Court in the case of Maung Lu Pe v. Maung San Mya, AIR 1940 Rang 11. Roberts, C. J. speaking for the Court held that the plaintiff who sued for redemption in similar circumstances was bound to lose.
10. This question has also come up before many other High Courts in India. Mr. Justice Lokur, in the case of Ningappa Awwappa v. Danappa Sharnanna, AIR 1947 Bom 206 followed the cases of the Rangoon High Court referred to above and held that where a usufructuary mortgage for more than Rs. 100/-is not registered, the owners of the land cannot file a suit for redemption. But they may be entitled to treat the mortgagee as a trespasser and evict him without repaying the loans advanced by him.
11. An interesting case came up before a single Judge of the Patna High Court in the case of Bishun Singh v. Sheodhari Das, AIR 1947 Pat 110. That was a case where the mortgagee in possession under an oral mortgage for a consideration of over Rs. 100/- as the defendant in the suit admitted the transaction. Yet Agarwala, J. held :
"The suit is in effect one to redeem the oral mortgage. It is necessary, therefore, for the plaintiffs to establish that they are mortgagors and that they are entitled to redeem ......... If an admission is sufficient to create a mortgage, then this admission must have that result. But since the decision of the Privy Council in Ariffs case, 58 Ind App 91 = (AIR 1931 PC 79) that the requirements of a statute cannot be got over by application of the doctrine of part performance, it is idle to contend that the requirements of Section 59, T. P. Act, can be evaded in this way. Section 59 declares that a mortgage for a consideration of Rs. 100/- or more must be by a registered instrument. Admittedly, in this case, there was no instrument either registered or otherwise. There could, therefore, be no mortgage and the defendant's admission is insufficient to create what the statute prevents.........".
12. In the case of Kameswar Prasad Singh v. Meghan Garain, AIR 1951 Pat 137 (FB), Mr. Ramaswami, J. (as he then was), speaking for the Court held :
"......... I am of opinion that the plaintiff in the present case ought not to be granted a decree for redemption on the ground that the defendants continued in possession of the land asserting themselves to be mortgagees for the period required by the statute .........".
13. Chief Justice Jha, in the case of Sonua Kumhar v. Chamtu Pahan, AIR 1953 Pat 134 considered a case of an oral usufructuary mortgage for a sum of above Rs. 100/- as void and possession of the creditor was held not to be legal and the mortgagee was not given the relief of redemption on the basis that a debtor's suit for recovery of possession was not tenable.
14. The weight of authority seems to be in support of the proposition that on the basis of an oral mortgage, a suit for redemption is not maintainable.
15. Mr. Rath, learned counsel for the plaintiffs-respondents contends that even on the footing that the mortgage is illegal the plaintiffs are entitled to ask for redemption as the possession of the defendant No. 1 would be only that of a mortgagee. He seeks support for his proposition from the decision of this Court in the case of Purusottam Das v. S.M. Desouza, ILR (1950) Cut 50 = (AIR 1950 Orissa 213). The Division Bench of this Court in the said decision did not agree with the principle laid down in the case of Sk. Bhukhan Mian v. Smt. Radhika Kumari Debi, AIR 1938 Pat 479 and held that in that case the creditor who was in possession of the property given as security prescribed only a limited interest of a mortgagee after lapse of 12 years as in the absence of registration the mortgage bond was not admissible and the mortgage document did not create any interest in immoveable property.
16. The facts of that case, however, are very different from the present case. In the reported decision, the mortgagee-defendant accepted the plaintiff's (mortgagor's) plea of possession having been parted with under a mortgage. At several places in the judgment, this aspect was emphasised. For instance, it was indicated :
"The case of the defendants is that between the years 1927 and 1930, the father of plaintiffs Nos. 2 to 4 borrowed from time to time various sums of money aggregating to Rs. 1,061-12-0 from defendant No. 2 on the security of the suit lands; that the plaintiffs are fully aware of the said mortgages and of the possession of the defendants for over twelve years ........".
"There can be no doubt on these pleadings that the defendants themselves have admitted that they have got into occupation by an arrangement as alleged by the plaintiffs in their plaint, and that they set out the details of that arrangement as alleged by the plaintiffs in their plaint in paragraph 3 of their written statement by referring to the borrowing from 1927 to 1930 on security -- the mortgages, exhibits 2 to 2-E being of dates ranging from 1927 to 1930 ............ Exhibits 2 to 2-E though unregistered, are admissible to show the nature of the possession and there is no evidence at all to show that the defendants were at any time asserting that they were holding possession on any title other than as mortgagees."
In the present case, however, as has already been indicated earlier, the defence plea was categorically the case of purchase and possession on the basis of title. To the facts of such a case now under examination, the principle in Desouza's case, ILR (1950) Cut 50 = (AIR 1950 Orissa 213) cannot be applied and on the facts, it is difficult to uphold the contention of Mr. Rath that the defendant No. 1 prescribed an interest of a usufructuary mortgagee only. I would, therefore, hold that a suit for redemption on the basis of an oral mortgage is not maintainable and in the facts of the present case, it cannot be held that the defendant No. 1 prescribed to the limited interest of a mortgagee. The plaintiffs are, therefore, not entitled either to redemption nor could they have been entitled to the relief of possession on the basis of their anterior title in view of the fact that the suit has been brought more than 12 years after possession was parted in favour of the defendant No. 1.
17. Mr. Murty contends that the provisions of Section 17 of the Orissa Money Lenders Act cannot be applied to the facts of the present case as has been done by the courts below and relief for redemption should not have been granted merely on the basis that 15 years from the date of mortgage had already elapsed. Section 17 of the Orissa Money Lenders Act reads thus:--
"17. Discharge of possessory mortgages: (1) Notwithstanding anything to the contrary contained in any other law or anything having the force of law or in any contract, any possessory mortgage, which is executed either before or after the commencement of this Act. shall, unless discharged previously, be deemed to stand discharged after the expiration of fifteen years from the date of the mortgage and the mortgagee shall deliver up to the mortgagor all documents in his possession or power relating to the mortgaged property and shall, if so required, retransfer the property to the mortgagor at his cost free from the mortgage and from all encumbrances created by him or those claiming under him and shall put the mortgagor in possession of the property."
X X X Emphasis is laid on the word "executed" and Mr. Murty contends that in the present case where the mortgage is said to be oral there is no execution of any mortgage and therefore, Sub-section (1) of Section 17 of the Orissa Money Lenders Act cannot be applied. Such a matter came up for decision before this Court in the case of Sheobalak Misra v. Suraj Prasad, 18 Cut LT 362 = (AIR 1953 Orissa 17) Panigrahi, J. (as he then was), speaking for the Division Bench stated:
"That takes us to the question as to whether such a mortgage could be created orally, as seems to have happened in the case before us, and yet would be governed by the provisions of the Orissa Money Lenders Act. Section 17 of the Act expressly makes reference to a mortgage which is 'executed'. "Execute" in legal parlance means to go through the forms necessary for the validity of a mortgage. It assumes that the mortgage should have been properly signed and attested. "Executed" literally means "completed" and in reference to a mortgage includes the act or series of acts culminating in the completion of the signing, attesting and delivery of the mortgage deed.
Now, Section 59 of the Transfer of Property Act provides that where the principal money secured is Rs. 100/- or upwards, a mortgage can be effected only by a registered document signed by the mortgagor and attested by at least two witnesses. As soon as the signing by the mortgagor and the attesting by the witnesses is completed, the mortgage may be said to have been "executed". It presupposes that the person who derives a benefit or incurs an obligation under the instrument should have signed or caused his signature to be put on it............... On a plain reading of Section 17, therefore, I am inclined to hold that it applies only to cases of usufructuary mortgage created by writing."
As such on the aforesaid authority, it would necessarily follow that the benefit of Section 17 of the Money Lenders Act cannot be given in the case of an oral mortgage.
18. On the aforesaid analysis I would hold that the plaintiff's suit for redemption was not maintainable and the Courts below acted contrary to law in decreeing the suit for redemption on the basis that the defendant No. 1 had been put in possession in 1942 under a usufructuary mortgage. I would add that provisions of Section 17 of the Orissa Money Lenders Act also did not apply to an oral mortgage.
19. The appeal is allowed. The Judgment and decree of the courts below are vacated and the suit is ordered to be dismissed with costs throughout.