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1976 Supreme(Mad) 558
IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. Ramanujam, J.
Nagheetha Maracair .....Appellant(s)
Versus
Govindaswami Naidu and others .....Respondent(s)
Appeal No. 853 of 1971,
Decided On : 23 October 1976
V. Ratnam, for Appellant.
R. Thillaivillalan and G. Krishnan, for Respondent.
Section 43 of the Transfer of Property Act can be invoked to enforce a mortgage against property inherited by a person who made misrepresentations about their authority to execute the mortgage, even if the misrepresentations did not relate to their title to the property.
Headnote:
TRANSFER OF PROPERTY ACT - SECTION 43 - APPLICABILITY - POWER OF ATTORNEY AGENT EXECUTING MORTGAGE DEED WITHOUT AUTHORITY - SUBSEQUENT INHERITANCE OF PROPERTY BY AGENT - ENFORCEABILITY OF MORTGAGE AGAINST INHERITED PROPERTY.
Fact of the Case:
The first defendant, as a power-of-attorney agent of his wife, executed a mortgage deed for Rs. 6,000. The mortgage was not supported by consideration to the extent of Rs. 3,600. The first defendant's wife died, leaving him and other heirs as her successors. The plaintiff filed a suit for recovery of the mortgage amount and a mortgage decree against the first defendant's 1/4th share in the suit property, which he inherited from his wife. The lower court held that the mortgage was not binding on the wife but was enforceable against the first defendant's inherited share under section 43 of the Transfer of Property Act.
Finding of the Court:
The court held that the general power of attorney executed by the wife did not authorize the first defendant to borrow or execute any mortgage on her behalf. Therefore, the mortgage deed was not binding on her and her heirs. However, the court found that the mortgage was fully supported by consideration and that the first defendant was liable to repay the amount under sections 65 and 235 of the Contract Act. The court also held that section 43 of the Transfer of Property Act could be invoked to enforce the mortgage against the first defendant's inherited share in the suit property, as he had made misrepresentations about his authority to execute the mortgage.
Issues: 1. Whether the general power of attorney authorized the first defendant to execute the mortgage on behalf of his wife. 2. Whether the mortgage was supported by consideration. 3. Whether the first defendant was liable to repay the mortgage amount under sections 65 and 235 of the Contract Act. 4. Whether section 43 of the Transfer of Property Act could be invoked to enforce the mortgage against the first defendant's inherited share in the suit property.
Ratio Decidendi: 1. The general power of attorney did not contain any specific power to borrow or execute any mortgage in regard to the suit property. Therefore, the first defendant was not authorized to execute the mortgage on behalf of his wife. 2. The mortgage was fully supported by consideration, as the first defendant admitted receipt of consideration to the extent of Rs. 2,400 and the written statement conceded that the mortgage was supported by consideration to the extent of Rs. 3,600. 3. The first defendant was liable to repay the mortgage amount under sections 65 and 235 of the Contract Act, as he had received the entire consideration under the mortgage deed and had made misrepresentations about his authority to execute the mortgage. 4. Section 43 of the Transfer of Property Act could be invoked to enforce the mortgage against the first defendant's inherited share in the suit property, as he had made misrepresentations about his authority to execute the mortgage and had subsequently inherited the property.
Final Decision: The appeal was partly allowed. The court held that the mortgage was not binding on the wife but was enforceable against the first defendant's inherited share in the suit property under section 43 of the Transfer of Property Act. The matter was remitted to the lower court for quantifying the amount payable by the first defendant, after giving him the benefits under the provisions of the Tamil Nadu Agriculturists Relief Act, 1938.
2. The first defendant resisted the suit contending that the mortgage deed dated 9th July, 1954, for a sum of Rs. 6,000 was not supported by consideration to the extent of Rs. 3,600, that the general power-of-attorney from his wife Kathija Bi did not authorise him to borrow nor to execute any mortgage on her behalf, that therefore, the mortgage is not valid and binding on Kathija Bi and her heirs, that he did not make any representation that he had the power to borrow and execute the mortgage on behalf of Kathija Bi and as such he is not guilty of any fraud as alleged by the plaintiff, that the plaintiff was fully aware about the infirmity of the mortgage even at the time of the execution by him, and that in any event the suit is barred by time. He also contended that he being an agriculturist, is entitled to the benefits of Tamil Nadu Act IV of 1938 as he is not an income-tax assessee. He denied that the plaintiff is entitled to any interest on the amount claimed.
3. Defendants 2, 4 and 6 in their written statement adopted the defence put forward by the first defendant and in addition, they contended that the mortgage is not binding on the heirs of Kathija Bi. They also denied the truth, validity and passing of consideration in respect of the suit mortgage which according to them is a sham and nominal document.
4. The fifth defendant was represented by Court guardian and he had denied that the first defendant as the power-of-attorney agent of his wife had any power to borrow and to execute the mortgage.
5. The Court below, on a consideration of the evidence adduced on either side, held that the suit property belonged to the first defendant’s wife Kathija Bi, she having purchased the same under the sale deed Exhibit A-6, dated 19th October, 1947. that, the general power-of-attorney executed by Kathija Bi in favour of her husband, the first defendant under Exhibit A-4, dated 24th October, 1951, did not empower him to borrow on her behalf on the security of the suit property, and as such the mortgage deed, Exhibit A
