IMPORTANT POINT
A usufructuary mortgage must be in writing and registered to be valid; failure to establish such a mortgage negates the right to seek redemption.

JUDGMENT :

P.B. Balaji, J.

[PRAYER: Second Appeal filed under Section 100 of the Code of Civil Procedure, against the decree and judgment passed in A.S. No.48 of 2015 dated 17.09.2016 on the file of the XVII Additional City Civil Court, Chennai confirming and modifying the decree and judgment passed in O.S. No.2700 of 2012 dated 24.01.2014 on the file of the XV Assistant City Civil Court, Chennai.]

The unsuccessful 1st defendant in a suit for declaration and redemption of mortgage is the appellant before me.

2. For ease of reference, the parties are described as per their litigative status before the Trial Court.

3. The plaintiffs filed a suit for a relief of declaration that the sale deed dated 25.11.2002 executed by the 2nd defendant, in favour of the 1st defendant was sham and nominal, null and void and not binding on the plaintiffs and also for a preliminary decree for redemption of the mortgage, declaring Rs.5,00,000/- as amount due on mortgage and seeking further direction to enable the plaintiffs to pay the same and there upon, directing the 1st defendant to deliver vacant possession of the suit property along with all documents of title relating to the suit property.

4. The plaintiffs stated that since the 2nd plaintiff intended starting his own business and he was in need of money, he had approached the 1st defendant and borrowed a sum of Rs.5,00,000/- to be repaid together with interest at 15% per annum and as a security for repayment of the said amount borrowed, the original documents of title relating to the suit property were handed over to the 1st defendant and it was also agreed that the 1st defendant would be entitled to collect the rents accruing from the suit property and adjust the same towards interest on the amount borrowed. In short, the plaintiffs allegations was that they had to only repay a sum of Rs.5,00,000/- and get the property redeemed and that the mortgage was a usufructuary mortgage.

5. In view of the insistence of the 1st defendant, the plaintiffs had executed a general Power of Attorney in favour of the 2nd defendant, besides also handing over blank stamp papers and cheques signed by the plaintiffs on the understanding that the same would be returned on repayment of the principal amount of Rs.5,00,000/-.

6. It is the case of the plaintiffs that the power of attorney executed in favour of the 2nd defendant was misused and a simple mortgage deed was executed and registered on 08.03.2000 as if only Rs.10,000/- had been borrowed by the plaintiffs, that too, from the 3rd defendant, instead of the 1st defendant. Thereafter, the 2nd defendant has executed a sale deed in favour of the 1st defendant on 25.11.2002 using the said power of attorney executed by the plaintiffs. The plaintiffs questioned the 1st defendant. However, all the plaintiffs pleas fell on deaf ears. Further, according to the plaintiffs, the property was worth much more than the sale consideration for which the property was conveyed by the 2nd defendant in favour of the 1st defendant. According to the plaintiffs, the 2nd and 3rd defendants are only hand maids of the 1st defendant and in collusion amongst themselves, they have knocked off the valuable property belonging to the plaintiffs.

7. After exchange of legal notices, the suit has been filed for the reliefs already mentioned herein above. The said suit was contested by the 1st defendant stating that he had nothing to do with the 3rd defendant and he had purchased the property from the plaintiffs themselves, through power agent and admittedly, the plaintiffs have executed a registered power of attorney in favour of the 2nd defendant, authorising him to convey the suit property. According to the 1st defendant, there was an agreement of sale between the plaintiffs and the 1st defendant on 23.02.2000 under which the 1st defendant had paid Rs.6,00,000/- as advance and subsequently he paid Rs.1,00,000/- on 20.02.2001 and Rs.60,000/- on 18.02.2002 and in view of the substantial portion of the s