IN THE HIGH COURT OF MADRAS FULL BENCH
Leach, C.J.
Vedachala Chettiar
Versus
Ameena Bi Ammal and Ors.
Decided On : 27.07.1943
Mortgage - Validity - Madras Agriculturists Relief Act - Section 68, Evidence Act
Fact of the Case:
Defendants 1 and 2 executed a mortgage in 1927, which the plaintiff sought to enforce in 1939. Defendant 4 purchased defendant 1's interest in the property. The District Munsif passed a preliminary decree for sale, but the District Judge reversed the decision, finding the mortgage to be a sham transaction.
Finding of the Court:
The District Judge's finding of the mortgage being a sham transaction was not considered to have taken into account all the material evidence, and the evidence showed the genuineness of the mortgage.
Issues: Validity of the mortgage, enforceability against defendants 1, 2, and 4, and the late amendment of the issue by defendant 4.
Ratio Decidendi: The mortgage was found to be genuine based on evidence, and the failure to call attesting witnesses rendered it unenforceable against defendant 2. Defendant 4's attack on the mortgage did not amount to a specific denial of execution.
Final Decision: The appeal was allowed, a preliminary mortgage decree was passed against defendants 1 and 4, and the suit was dismissed as against defendant 2.
Leach, C.J.
1. In the first instance this appeal came before Patanjali Sastri J. who was of the opinion that it involved the consideration of the judgments of this Court in Thayammal v. Muthukumaraswami Chettiar A.I.R. 1929 Mad. 881 and Dawood Bowther v. Ramanathan Chettiar AIR1938Mad43 which were regarded as being in conflict. In our opinion it is not necessary to embark upon a. discussion of these cases in order to decide this appeal. On 5th March 1927, defendants 1 and 2 executed a mortgage of the property in. suit in favour of two persons, Raju Chetti and Dhanapala Ghetti, to secure the payment of a sum of Rs. 250. Defendant 1 is the son of defendant 2. The plaintiff avers that on 14th October 1929, the mortgagees assigned the mortgage to him. On 6th March 1939, the plaintiff instituted a suit to enforce the mortgage and the appeal arises out of the decree passed in that suit. On 27th January 1932, defendant 4 purchased at a court sale the right, title and interest of defendant 1 in the property. All the defendants filed written statements, but the main contest was with defendants 2 and 4. Defendant 1 admitted the execution of the mortgage, but pleaded that it had been discharged by reason of the provisions of the Madras Agriculturists Relief Act. His mother, defendant 2, specifically denied the execution of the deed of mortgage. She admitted that she had placed her thumb impression on a document, but, she alleged that she had been told that it was a deed partitioning the property between her and defendant 1. She further averred that the document had not been properly attested. Defendant 4 pleaded that the mortgage had been entered into in order to delay and, if possible, defeat him. He also alleged that the assignment to the plaintiff was without consideration and "sham and nominal." The District Munsif of Chingleput, in whose Court the suit was filed, held that the mortgage deed and the deed of assignment were genuine documents and had been validly executed. Accordingly he passed a preliminary decree for sale as against defendants 1, 2 and 4.
2. The District Munsifs decision was reversed by the District Judge of Chingleput. The District Judge held that the mortgage was a sham transaction, entered into between defendant 1 and the mortgagees with the object of defeating defendant 4. This finding of fact would be binding on us, if the District Judge had taken into consideration all the material evidence, but obviously this he has not done. He has dealt with the question of the validity of the mortgage in a very perfunctory manner and has ignored evidence which, in our opinion, clearly shows the genuineness of the mortgage. The District Judge found the mortgage to be a sham transaction because at the time it was entered into defendant & was endeavouring to attach before judgment the same property and the plaintiff had refrained from taking steps to enforce the mortgage for a period of ten years, notwithstanding that defendant 2 had denied the validity of the transaction when he gave her notice of the assignment. The effort on the part of defendant 4 to secure an order of attachment before judgment and the delay in the institution of the suit are, of course, factors to be taken into consideration, but they are not necessarily the deciding factors. The evidence which the District Judge failed to consider is this: Raju Chetti and Dhanapala Chetti obtained a money decree against defendant 1 in S. C. Section No. 933 of 1925 and in execution of that decree they attached and brought to sale the property now in suit. In order to prevent the sale being confirmed defendant 1 paid a sum of Rs. 180 to the mortgagees, which left Rs. 250 owing to them. As security for the balance of Rs. 250 the mortgage in suit was executed, and when this had been done the sale was set aside.
3. The mortgage deed has been exhibited in this case and Dhanapala Chetti has proved the circumstances under which it was executed. When this evidence is taken
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