Madras High Court
S.Kasthuri vs Parameswari on 3 January, 2024
Author: G.K.Ilanthiraiyan
Bench: G.K.Ilanthiraiyan
A.S.No.189 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.189 of 2007
S.Kasthuri ...Appellant
Vs.
1. Parameswari
2. Sri.Balaji Educational &
Charitable Public Trust,
36, Fourth Cross Street,
Sithankudi,
Ulavargarai Municipality,
Pondicherry.
Rep by its Trustee
M.K.Rajagopalan
3. Malliga. ...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.17 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 : Mr.R.Sunil Kumar
For R2 : Mr.K.Doraisami, Senior Counsel
For Mr.Muthumani Doraisami.
For R3 : No appearance
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Page 1 of 14
A.S.No.189 of 2007
JUDGMENT
The Appeal Suit is filed as against the Judgment and Decree
dated 20.01.2005, made in O.S.No.17 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.70,000/- on 10.09.1990 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
dated 02.01.1991, to the plaintiff evidencing the deposit of title deed as
security for the loan. She had also executed a promissory on 02.01.1991,
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as collateral security for the said mortgage created by her. However, the
first defendant failed to discharge her debt and as such the plaintiff
caused legal notice. On verification of encumbrance certificate, the
plaintiff found that the first defendant sold some of the items of the
mortgaged properties to the second & third defendants 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 she borrowed a sum of Rs.70,000/- and agreed to
pay interest only at the rate of 12% per annum on 10.09.1990. Before
advancing the loan, the plaintiff required the credit worthiness of the first
defendant and required certain documents of properties held in her name.
Hence, the documents mentioned in the plaint were given to the
plaintiff's husband for his perusal and after being satisfied, the said loan
was advanced to her. The interest has been paid periodically with the
portion of principal amount also. Now the entire debt was cleared and
there has been delay in returning the pro note and the documents. Since
the documents were handed over prior to 10.09.1990, without any
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intention to create mortgage by deposit of title deeds, the present suit is
not maintainable under law.
5. The second defendant filed written statement stating that the
suit itself collusive one between the plaintiff and the first defendant. The
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.70,000/- on 10.09.1990?
(ii) Whether Karaikal region is not notified area for
the purpose of creating equitable mortgage by deposit of
title deeds?
(iii) Whether the first defendant has borrowed the
sum of Rs.70,000/- from the plaintiff only on the basis of
pronote dated 02.01.1991?
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(iv) Whether the plaintiff is not entitled to claim the
rate of interest as calculated in the plaint and whether the
claim of such interest is not legally permissible.?
(v) Whether the first defendant has already
discharged fully the debt borrowed from the plaintiff under
the promissory note dated 02.01.1991 and hence she is not
liable to pay any amount to her towards the alleged
equitable mortgage as claimed in this suit?
(vi) Whether the suit is barred by law of limitation?
(vii) Whether the second and third defendants as
purchasers of the suit properties are 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 and marked
documents in Ex.A.1 to Ex.A.7. 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.
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8. The learned Senior Counsel appearing for the appellant
submitted that the first defendant admitted her borrowal of Rs.70,000/-
on 10.09.1990. She had also deposited her titled document with the
plaintiff and also singed in promissory note and memorandum of deposit
of title deed on 02.01.1991. 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
the documents came into the possession of the plaintiff on the date of
loan itself i.e., on 10.09.1990 for ascertaining the credit worthiness of the
first defendant and thereafter, the promissory note and the memorandum
came into existence. The trial Court also concluded that the plaintiff
failed to prove that the memorandum of deposit of title deed was
executed in the place of residence of the plaintiff at Karaikal.
8.1. He further submitted that, 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
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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 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.
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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
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.
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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.70,000/- on 10.09.1990 and agreed to repay the same with interest
at the rate of 24% per annum, for which, the first defendant created
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 10.09.1990. However, as per the averments made in
the plaint, the first defendant borrowed amount from her directly and the
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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
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
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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;
(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.
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16. Further, the first defendant borrowed loan on 10.09.1990.
However, the plaintiff filed suit only on 01.01.2003, 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.
17. In the result, the Appeal Suit stands dismissed. There shall
be no order as to costs.
03.01.2024
(3/3)
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
(3/3)
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