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2022 Supreme(Mad) 1530

IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. ANAND VENKATESH, J.
N. Chandran - Appellant
Versus
N. Swaminathan - Respondent
Second Appeal No. 369 of 2013 & MP No. 1 of 2013
Decided On : 18-04-2022

Advocates appeared:
For the Appellant:N. Manokaran, Advocate. For the Respondent:I. Abrar Md.Abdullah, Advocate.

The main legal point established in the judgment is the admissibility of unregistered and insufficiently stamped documents for collateral purposes under Section 49 of the Registration Act, 1908, after payment of the deficit stamp duty and penalty.

Headnote:

Redemption of Mortgage - Property Dispute - Indian Stamp Act, 1899, Section 35 - Registration Act, 1908, Section 49

Fact of the Case:

The plaintiff sought redemption of mortgage and delivery of possession of the suit property, which was originally owned by the father of the plaintiff and his brothers. The defendant, one of the brothers, had mortgaged a portion of the property to another brother and later to the plaintiff. The Trial Court dismissed the suit, but the Lower Appellate Court allowed the appeal and decreed the suit. The defendant filed a Second Appeal.

Finding of the Court:

The Court found that the Lower Appellate Court correctly decreed the suit for redemption of mortgage and recovery of possession. It upheld the Lower Appellate Court's decision to consider the unregistered and insufficiently stamped mortgage deed for collateral purposes under Section 49 of the Registration Act, 1908, after the plaintiff paid the deficit stamp duty and penalty.

Issues: The issues involved the admissibility of the unregistered and insufficiently stamped mortgage deed, the validity of the sale deed in favor of the plaintiff, and the entitlement to redemption of mortgage and recovery of possession.

Ratio Decidendi: The Court held that the unregistered and insufficiently stamped document could be considered for collateral purposes under Section 49 of the Registration Act, 1908, after payment of the deficit stamp duty and penalty. It also emphasized that the plaintiff automatically acquired the rights of the mortgagor after purchasing the property.

Final Decision: The Second Appeal was dismissed, upholding the Lower Appellate Court's decision to decree the suit for redemption of mortgage and recovery of possession.

JUDGMENT

(Prayer: Second Appeal filed Under Section 100 of the Code of Civil Procedure against the Judgment and Decree dated 19.12.2012 made in A.S.No.65 of 2012 on the file of the learned Principal Subordinate Judge and Appellate Authority, Coimbatore reversal of the Judgment and Decree dated 12.03.2012 made in O.S.No.1506 of 2006 on the file of the Third District Munsif, Coimbatore.)

1. The defendant is the appellant in this Second Appeal.

2. The respondent/plaintiff filed the suit seeking for the relief of redemption of mortgage and for delivery of possession of the second item of the suit property.

3. The case of the plaintiff is that the suit property originally belonged to the father of the plaintiff. During his lifetime, he executed a Will dated 20.10.1994, marked as Ex.A1 in favour of his sons. He had four sons. The “C” schedule property was allotted in favour of the plaintiff and the “B” schedule property was allotted in favour of the defendant. “D” schedule property was allotted in favour of another brother Paramasivam. The further case of the plaintiff is that the plaintiff and the defendant are doing business in the suit property. The said Paramasivam who was allotted the “D” schedule property, mortgaged the property in favour of the defendant on 15.9.2005. According to the plaintiff, 96 Sq.ft., was mortgaged in favour of the defendant and the remaining 64 Sq.ft., wasencroached upon by the defendant.

4. The plaintiff has further stated that on 22.5.2006, he purchased the property belonging to Paramasivam for a valid consideration. The sale deed was marked as Ex.A3. The plaintiff was ready and willing to pay back the loan amount of Rs.75,000/- to the defendant and redeem the mortgage. That apart, the plaintiff also wanted the defendant to handover possession of 64 Sq.ft., which was encroached by him. Accordingly, a legal notice came to be issued on 17.6.2006, marked as Ex.A4. The defendant through reply notice dated 22.6.2006 marked as Ex.A5, refuted the claim made by the plaintiff. Hence, the suit came to be filed seeking for the relief of redemption of mortgage and for recovery of possession.

5. The defendant filed a written statement and took a stand that the sale deed of the plaintiff is a sham and nominal document. It was stated that the total mortgage amount was Rs.1,75,000/- and there was nothing in the sale deed about the existing mortgage over the suit property. The defendant also placed reliance upon the pleadings in the earlier suit filed in O.S.No. 1240 of 2006 wherein the said Paramasivam had specifically stated that the defendant was in permissive possession. Therefore, the defendant denied the allegation made by the plaintiff as if he had encroached into the property. Accordingly, the defendant sought for the dismissal of the suit.

6. The Trial Court after considering the facts and circumstances of the case and on appreciation of oral and documentary evidence, dismissed the suit through Judgment and Decree dated 12.3.2012. Aggrieved by the same, the plaintiff filed appeal in A.S. No. 65 of 2012 and the Lower Appellate Court through Judgment and Decree dated 19.12.2012, allowed the appeal and set aside the Judgment and Decree of the Trial Court. Accordingly, the suit was decreed. Aggrieved by the same, the defendant has filed this Second Appeal.

7. When the Second Appeal was admitted, the following substantial questions of law were framed:

1) Whether the suit as framed is maintainable in law in the absence of any prayer for partition or declaration of title?

2) Whether the First Appellate Court is correct in law in decreeing the suit for possession after redemption of the alleged mortgage, in the absence of any legal evidence to prove the due execution and genuineness of Ex.A1 to Ex.A3?

3) Whether the First Appellate Court erred in law in accepting the sale made in favour of the plaintiff even before the period of redemption under Ex.A2, particularly when the said Ex.A2 is inadmissible and unreliable

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