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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) KOHIMA BENCH
Yarenjungla Longkumer, J.
Shri. Toshipokba Longkumer S/O Late Merennungsang Longkumer And Anr - Petitioners
Versus
Shri. Hukavi Muru - Respondent
FA 1 of 2022, FA 4 of 2014
Decided On : 30-03-2026
| Table of Content |
|---|
| 1. overview of initial dispute, pleadings, framed issues, and contested trial court judgment. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 2. appellants' contentions regarding trial court's failure to evaluate evidence and improper interest calculation. (Para 13 , 14 , 15 , 16 , 17) |
| 3. respondent's defense of mortgage validity, doctrine of estoppel, and commercial nature of the loan. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 4. appellate court's initial review of procedural facts and trial court findings. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33) |
| 5. invalidity of mortgage due to clog on redemption, non-applicability of specific legislation, and usurious interest rates. (Para 34 , 35 , 36 , 40) |
| 6. remand of the suit for fresh evidence evaluation and compliance with civil procedure interest limits. (Para 37 , 38 , 39 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48) |
JUDGMENT :
Yarenjungla Longkumer, J.
First Appeal No. 4 of 2014 and First Appeal 1 of 2022 are filed under Rule 29 of the RULES FOR ADMINISTRATION OF JUSTICE AND POLICE IN NAGALAND R/W Section 96 of the Code of Civil Procedure by the appellants assailing the judgment and decree dated 31.03.2014 passed in Civil Suit No.13/2008 and Counter Claim 1 of 2008.
2. Heard the Sr. counsel for the appellants Mr. R. Iralu assisted by Ms. Mhabeni. Also heard Mr. N.K. Luikham, learned counsel for the respondent.
3. The case of the appellants/plaintiffs is that the appellant No.1 is the brother-in-law of the appellant No.2. The plaintiff 2/appellant No.2 is the owner of the land covered by Patta No.559, Block No.6 in Mouza No.1 of Dimapur town having an area of 05B-01K-19Ls where upon stands two buildings. In May 2006, the plaintiff/appellant No.1 through one Mrs.Zhano(PW-9) and Mrs. Lily(PW-3) obtained a loan of Rs.50,00,000/- (fifty lakhs) from the defendant whereby the appellant 2/plaintiff No.2 agreed to secure his loan and building aforementioned against the loan. The defendant fixed the loan interest @8% per month. A mortgage deed was executed on 13.05.2006 which was to be effective from 13.05.2006 to 14.01.2007 and the monthly interest was to be paid after every two months. A stipulation was made in the mortgage deed that in the event of the plaintiff No.1 failing to repay the loan amount with the agreed interest within the time frame, the said land and building was to be forfeited to the defendant. The plaintiffs/appellants received Rs.45,00,000/- by cheque and Rs.5,00,000/- in cash.
4. Pursuant to the execution of the mortgage deed, the plaintiff/appellant No.1 on 26.08.2006 paid the defendant a sum of Rs.12,00,000/-(Twelve lacs) towards interest for the first three months. This amount was paid to the defendant through Mrs. Zhano(PW-9) and Mrs. Lily(PW-3) as the loan was also procured through them. Thereafter, on account of financial constraints, the appellants/plaintiffs could not pay the interest for the next two months. For the default in payment, the defendant calculated the default interest for three months on 03.11.2006 amounting to Rs.12,00,000/-(Twelve lacs) and this amount was compounded towards the principal amount and by extending another Rs.8,00,000/-(Eight lacs) to the appellant 2/plaintiff 2 the defendant enhanced the principal amount to Rs.70,00,000/-(Seventy lacs) with interest @6% per month.
5. The appellants/plaintiffs through Mrs. Lhamu (PW-1), wife of the plaintiff/appellant No.1 paid the defendant an amount of Rs.38,60,000/- (Thirty eight lacs sixty thousand) in 7 installments between the period beginning from 07.02.2007 to 03.11.2007 towards repayment of the loan. Another sum of Rs. 10,00,000/- (ten lacs) was paid to the defendant by the appellant/plaintiff No.2 on 20.01.2008 in the presence of Mrs. Imotila (PW-4) and Mrs. Arennungla(PW-6). The plaintiffs/appellants insisted on receipts on all the occasions of making the payments, however, the defendant refused to issue receipts stating that the parties are maintaining proper accounts of
AI
Plaintiffs are bound by the contractual interest of 27% per annum as per mortgage deeds and have not proven excess payments or that defendants are money lenders under the Tamil Nadu Money Lenders Act....
Redemption of mortgage - Evidence led by applicant during trial is inconsistent with pleadings and documents stated to have been deposited with plaintiff / appellant for creation of equitable mortgag....
The intention of the parties and the content of the documents are crucial in determining the nature of a transaction, whether it is a loan or a sale.
The court affirmed that the maximum interest for secured loans is 9% per annum under Tamil Nadu law, and the plaintiffs failed to prove their claims of excessive interest charges.
The main legal point established in the judgment is that a mortgage deed must fulfill the requisite conditions as provided in the law, and its registration is necessary for validity and admissibility....
An unregistered Mortgage Deed cannot be relied upon for recovery of money, necessitating remedies under Order 38 Rule 5 CPC instead of Order 39 Rule 1 and 2 CPC.
The proof of the document need not be the proof of its contents, and the failure to question the validity of a document in a timely manner can impact the outcome of a legal dispute.
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