Point of law:Mortgage - Inability of the plaintiffs to repay the mortgage amount - plaintiffs cannot plead that the first defendant had created a clog on redemption

JUDGMENT :

(Prayer: Suit filed under Order XXXVII of O.S. Rules and Order VII Rule 1 of C.P.C. read with Order XXXIV of CPC,

(a) to direct the first defendant to receive a sum of Rs.35,00,000/- (Rupees Thirty Five Lakhs only) from the Plaintiffs herein along the due under the Registered Simple Mortgage Deed dated 19.03.1999 (Doct.No.983/1999, District Registrar's Office, Madras South) and handover all the original documents of title in respect of the Schedule mentioned property after duly cancelling the aforesaid subsisting mortgage, within a time to be stipulated by this Hon'ble Court;

(b) declare that the purported transfers effected at the instance of the 1st defendant dated 11.08.2004 and 09.02.2007 as sham and nominal and not binding on the plaintiff's statutory redeemable right on the suit property;

(c) direct the defendants to pay the costs of the suit.)

1. The suit in question is for redemption of a Simple Mortgage Deed dated 19.03.1999 registered as Document No.983/1999, on the file of the District Registrar's Office, Madras (South) after directing the first defendant to receive a sum of Rs.35,00,000/- from the plaintiffs, being the dues under the mortgage and, handover all the original documents of title in respect of the schedule mentioned property after cancelling the subsisting mortgage within the time frame fixed by the court and for a declaration that the transfers effected at the instance of the first defendant on 11.08.2004 and 09.02.2007 are sham and nominal and not binding on the plaintiffs' statutory redeemable right on the suit property.

2. The property in question contains two items of property comprised in survey No.227/1B, one measuring 30 cents together with superstructure situated at Jalladianpet Village, Tambaram Taluk, Kancheepuram District and the other property measuring an extent of 10 cents of vacant land in Survey No.227/3 in the same village.

3. Plaintiffs' Case:

3.1. The plaintiffs' case in brief is that the first plaintiff had purchased the schedule properties on 29.09.1993 and had put up a construction thereupon. She was running a business as a Sole Proprietary concern in the name and style of M/s. SRB Garments. The first plaintiff, had availed a loan for running the business from The South Indian Bank Ltd. She had defaulted in repaying the loan and the bank had initiated recovery proceedings. The plaintiffs, who are husband and wife, had then decided to avail financial assistance to discharge the Bank loan and for their children's education. They approached the first defendant for loan, since he was carrying on money lending business under the name and style of M/s.Rashmi Finance. The first defendant had agreed to extend the loan on condition that the plaintiffs executed a Simple Mortgage in respect of the suit schedule property as security.

3.2. On 19.03.1999, the first defendant had extended a loan of a sum of Rs.4,00,000/- and a Simple Mortgage was created in respect of the suit property. The signature of both plaintiffs were obtained in the Mortgage Deed and the signature of first defendant alone was obtained on a Rs.100 non-judicial stamp paper. The plaintiffs were unaware about the contents of the second document. It appears that the second document was a Power Deed. This document was also registered along with the Mortgage Deed. On 23.03.1999, the first plaintiff had given a further sum of Rs.2,00,000/- and in all a sum of Rs. 6,00,000/- was paid as loan.

3.3. As per the terms of the Mortgage Deed, the plaintiffs were liable to pay the monthly interest and towards the same, a sum of Rs.36,000/- was paid in the name of the first defendant concern, M/s. Rashmi Finance. In the year 2000, a sum of Rs.1,00,000/- was paid as interest by the plaintiffs. After that, the plaintiffs were going through a very bad financial crunch, as they had to clear the bank loan and meet their children's education and was therefore not in a position to pay the interest.

3.4. In the first week of May 2006, the plaintif