Madras High Court
S.Kasthuri vs S.Arivukkarasu on 3 January, 2024
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
A.S.No.188 of 2007
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 19.12.2023
PRONOUNCED ON : 03.01.2024
CORAM
THE HON'BLE Mr. JUSTICE G.K.ILANTHIRAIYAN
A.S.No.188 of 2007
S.Kasthuri ...Appellant
Vs.
1. S.Arivukkarasu
2. Sri.Balaji Educational &
Charitable Public Trust
36, Fourth Cross Street,
Sithankudi,
Ulavargarai Municipality,
Pondicherry.
Rep by its Trustee
M.K.Rajagopalan ...Respondents
PRAYER: Appeal Suit filed under Section 96 of C.P.C., against the
Judgment and Decree dated 20.01.2005, made in O.S.No.5 of 2003 on
the file of the learned Additional District Judge, Pondicherry at Karaikal.
For Appellant : Mr.T.P.Manoharan
Senior Counsel
For Ms.D.Kamatchi
For Respondents
For R1 : No appearance
For R2 : Mr.K.Doraisami, Senior Counsel
For Mr.Muthumani Doraisami.
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Page 1 of 14
A.S.No.188 of 2007
JUDGMENT
The Appeal Suit is filed as against the Judgment and Decree
dated 20.01.2005, made in O.S.No.5 of 2003 by the learned Additional
District Judge, Pondicherry at Karaikal, thereby dismissed the suit for
recovery of mortgage amount.
2. The appellant is the plaintiff and the respondents are the
defendants. For the sake of convenience, the parties are referred to as per
their ranking in the trial Court.
3. The plaintiff filed suit for recovery of mortgage amount
against the defendants. The case of the plaintiff is that, the first defendant
had borrowed loan of Rs.25,000/- and agreed to repay the said amount
with interest at the rate of 24% per annum. The first defendant with an
intention to create an equitable mortgage over the suit schedule
properties, made deposit of title deed at the plaintiff's residence in
Karaikal. The first defendant also handed over a letter of memorandum to
her evidencing the deposit of title deed as security for the loan. However,
the first defendant failed to discharge her debt and as such the plaintiff
caused legal notice. On verification of encumbrance certificate, the
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plaintiff found that the first defendant sold some of the items of the
mortgaged properties to the second defendant by the registered sale deed.
Therefore, the purchaser of the property subject to mortgage is also liable
to discharge the loan amount. Hence, the suit.
4. Resisting the same, the first defendant filed written
statement stating that the suit itself barred by limitation. The deposit of
title deed at Thiruvettakudy village is not notified area and therefore, the
suit itself liable to be dismissed. He also denies the very execution of
deposit of title deeds. The alleged agreement constitutes a contract
indicating the reason for deposit of title deeds and it requires registration
and also stamp duty. The husband of the plaintiff had given some amount
in order to reciprocate the help given for getting the advance amount from
Green Park land owners at Thiruvettakudy with whom the plaintiff's
husband had entered into an agreement. The said amount was given to
the first defendant's father for meeting out the legal expenditure for the
cases involved by the plaintiff's husband.
5. The second defendant filed written statement stating that the
suit itself collusive one between the plaintiff and the first defendant. The
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memorandum of deposit of title deed is not in accordance with law. As far
as the second defendant is concerned, he is a bonafide purchaser of the
suit property for the valid sale consideration. Therefore, the plaint is not
entitled any claim as against the second defendant.
6. On completion of pleadings, the trial Court framed the
following issues :-
(i) Whether the first defendant has not created any
equitable mortgage in favour of the plaintiff by deposit of
title deeds of the suit properties for the borrowal of
Rs.25,000/-on 02.01.1991?
(ii) Whether the village Thiruvettakudy is not
notified Town as per Section 58(f) of Transfer of Property
Act?
(iii) Whether the Memorandum of Agreement is to
be stamped and registered under law?
(iv) Whether the first defendant had signed in blank
stamped paper and blank paper for the sum of Rs.25,000/-
received by his father from the plaintiff's husband in
connection with the return of advance amount from the
Green Park land owners?
(v) Whether the plaintiff is not entitled to claim the
rate of interest as calculated in the plaint and whether the
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claim of such interest is not legally permissible?
(vi) Whether the suit is barred by law of limitation?
(vii) Whether the second defendant as purchaser of
the suit properties is bound to discharge the suit amount?
(viii) Whether the plaintiff is entitled for a judgment
and preliminary decree against the defendants as prayed
for?
(ix) To what other relief or reliefs, the parties are
entitled?”
7. On the side of the plaintiff, she examined P.W.1 & P.W.2 and
marked documents in Ex.A.1 to Ex.A.4. On the side of the defendants,
they examined D.W.1 and no documents were marked. On considering
the oral and documentary evidences, the trial Court dismissed the suit.
Aggrieved by the same, the plaintiff preferred this appeal suit before this
Court.
8. The learned Senior Counsel appearing for the appellant
submitted that the suit is very much maintainable before the trial Court.
The memorandum of deposit of title deed entered in the house of the
plaintiff and it is a notified area under the Transfer of Property Act.
However, the trial Court dismissed the suit as in the place of residence of
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the first respondent the memorandum of deposit executed and it was not
a notified area. Further, though the plaintiff did not get into the box, her
husband deposed on her behalf as P.W.1. It is permissible under the law.
In support of his contention, he relied upon the judgment reported in
(2010) 10 SCC 512 in the case of Man Kaur (died) by LRs., Vs. Hartar
Singh Sangha, in which the Hon'ble Supreme Court of India held as
follows :-
“(g) Where the law requires or contemplated the
plaintiff or other party to a proceeding, to establish or
prove something with reference to his `state of mind' or
`conduct', normally the person concerned alone has to
give evidence and not an attorney holder. A landlord who
seeks eviction of his tenant, on the ground of his `bona
fide' need and a purchaser seeking specific performance
who has to show his `readiness and willingness' fall
under this category. There is however a recognized
exception to this requirement. Where all the affairs of a
party are completely managed, transacted and looked
after by an attorney (who may happen to be a close
family member), it may be possible to accept the evidence
of such attorney even with reference to bona fides or
`readiness and willingness'. Examples of such attorney
holders are a husband/wife exclusively managing the
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affairs of his/her spouse, a son/daughter exclusively
managing the affairs of an old and infirm parent, a
father/mother exclusively managing the affairs of a
son/daughter living abroad.”
Even as per the plaint, only in the place of the plaintiff at Karaikal, the
memorandum of deposit of title deed was executed as such, it is notified
area.
9. The learned Senior Counsel appearing for the second
defendant submitted that delivery must be in the towns mentioned in the
Transfer of Property Act. As per Section 58(f) of the Transfer of Property
Act, where a person in any of the following towns, namely, the towns of
Culcutta, Madras and Bombay, and in any other town which the State
government concerned may, by notification in the official gazette, specify
in this behalf, delivers to a creditor or his agent documents of title to
immovable property, with intent to create a security thereon, the
transaction is called a mortgage by deposit of title deeds. Admittedly, in
the place of the first defendant, the alleged memorandum of deposit of
title deeds was executed and it is not notified area under the Act.
Therefore, the suit itself is not maintainable and the trial Court rightly
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dismissed the same. In support of his contention, he relied upon the
judgment reported in AIR 1960 Madras 529 in the case of Veerammal
and anr Vs. KR.L.Lakshmanan Chettiar and anr.
10. Heard the learned counsel appearing on either side and
perused the materials placed before this Court.
11. Having regard to the pleadings, evidence and the
submissions made by the learned counsel appearing on either side, the
following points arise for consideration in this appeal :-
(i) Whether the plaintiff has established that the memorandum of
deposit of title deed was executed in the place of the plaintiff as
contemplated under Section 58(f) of the Transfer of Property Act?
(ii) Whether the plaintiff proved her case for recovery of money?
12. In support of the plaintiff, her husband had deposed as
P.W.1. According to the plaintiff, the first defendant had borrowed a sum
of Rs.25,000/- on 02.01.1991 and agreed to repay the same with interest
at the rate of 24% per annum, for which, the first defendant created
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equitable mortgage of the suit schedule properties by depositing his title
deeds at her residence at Karaikal. However, the plaintiff failed to depose,
in order to prove the same. Her husband only was examined as P.W.1. He
deposed that at his residence, the plaintiff advanced loan to the first
defendant on 02.01.1991. However, as per the averments made in the
plaint, the first defendant borrowed amount from her directly and the
documents were handed over to the plaintiff's husband viz., P.W.1 only in
the residence of the first defendant in Thiruvettakudy Village.
13. Therefore, the place of handing over the documents and the
execution of the memorandum thereof for creating mortgage is a crucial
point on which, the plaintiff has to establish the same, by satisfactory
evidence. The plaintiff has to establish her case that the first defendant
had deposited the title deeds only in Karaikal, which is notified area for
the purpose of Section 58(f) of the Transfer of Property Act for creating
mortgage by deposit of title deed. However, the plaintiff failed to establish
the same in the manner known to law.
14. It is relevant to extract the provisions under Section 58(f) of
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the Transfer of Property Act as follows :-
“58(f) Mortgage by deposit of title-deed :- Where
a person in any of the following towns, namely, the towns
of Culcutta, Madras and Bombay, and in any other town
which the State government concerned may, by
notification in the official gazette, specify in this behalf,
delivers to a creditor or his agent documents of title to
immovable property, with intent to create a security
thereon, the transaction is called a mortgage by deposit
of title deeds.”
15. As rightly relied upon by the learned Senior Counsel
appearing for the second defendant, in the judgment reported in AIR
1960 Madras 529 in the case of Veerammal and anr Vs.
KR.L.Lakshmanan Chettiar and anr., this Court issued guidelines for
equitable mortgages as follows:-
“(9) The requisites of an equitable mortgage by
deposit of title deeds are:
(i) There must be a debt;
(ii) Delivery must be by a debtor or his agent;
(iii) Delivery must be in the towns mentioned in the Act;
(iv) Delivery must be to a creditor or his agent;
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(v) Delivery must be of documents of title to immovable
property; and
(vi) Delivery must be with intent to create a security
thereon.”
Therefore, the deliver must be in the towns mentioned in the Act.
However, the plaintiff failed to establish that the first defendant had
deposited the title deed in Karaikal. Therefore, the plaintiff failed to
satisfy the provision under Section 58(f) of the Transfer of Property Act,
to prove the memorandum of deposit of title deeds.
16. Further, the first defendant borrowed loan on 02.01.1991.
However, the plaintiff filed suit only on 11.12.2002, for taking action on
the mortgage by deposit of title deeds. Therefore, the delay would create
doubt regarding the genuineness of the suit and the transaction between
the plaintiff and the first defendant. Accordingly, all the points are
answered in favour of the defendants and the trial Court rightly dismissed
the suit. This Court finds no infirmity or illegality in the judgment passed
by the trial Court.
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17. In the result, the Appeal Suit stands dismissed. There shall
be no order as to costs.
03.01.2024
(2/3)
Index : Yes / No
Internet : Yes / No
Speaking order /Non-speaking order
rts
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To
1. The Additional District Judge,
Pondicherry at Karaikal.
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G.K.ILANTHIRAIYAN, J.
rts
Judgment in
03.01.2024
(2/3)
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