HIGH COURT OF ALLAHBAD
RANDHIR SINGH, J.
Gulab Singh
Versus
L. Hira Lal
Second Appeal No. 637 of 1947
Decided On : 24-09-1953
Mortgage - Property Rights - Validity of Mortgage and Right to Refund of Money
Fact of the Case:
Gulab Singh made a mortgage of certain plots to Hira Lal. The brothers of Gulab Singh objected, claiming that he only owned one-fourth share in the plots and had no right to mortgage all the plots. The objection was overruled, but the brothers later sued for a declaration that the mortgage was not binding on their three-fourths share, and the suit was decreed. Hira Lal then sued for the recovery of the mortgage money, claiming that the security had been rendered insufficient and he was entitled to a refund under Section 68 of the Transfer of Property Act. The suit was decreed by the Munsif and upheld by the Civil Judge on appeal.
Finding of the Court:
The court found that Gulab Singh had the right to mortgage his share in the plots, and the transfer could not be said to be void. The property which was furnished as security for the loan had been rendered insufficient due to the decree in favor of the brothers of Gulab Singh, entitling the plaintiff to sue for his mortgage money under Section 68 of the Transfer of Property Act.
Issues: Validity of the mortgage made by Gulab Singh and the right of the plaintiff to a refund of the money advanced to the mortgagor under Section 68 of the Transfer of Property Act.
Ratio Decidendi: A mortgage or sale of occupancy holdings is void, but a mortgage or sale of a share in plots of which the transferor is the owner will not be void. If the transferor transfers a share in excess of his own share, the transaction would be valid so far as his share is concerned and would be invalid with regard to the share of the other co-sharers. Section 68 of the Transfer of Property Act allows a mortgagee to sue for the mortgage money where the security is rendered insufficient due to causes other than a wrongful act or default of the mortgagor or mortgagee.
Final Decision: The appeal was dismissed, and no order as to costs was made as the respondent was absent.
The plaintiff then instituted the suit which has given rise to this appeal for the recovery of the mortgage money on the allegations that the security furnished by the mortgagor had been rendered insufficient and lie was entitled under Section 68 of the Transfer of the Property Act for a refund of the money advanced to the mortgagor. The munsif decreed the suit. The defendant then went in appeal to the District Judge. The Civil Judge who heard the appeal upheld the judgment of the Munsif and the defendant has now come up in second appeal.
2. The respondent has not turned up and the appeal has been heard ex parts.
3. The only point which has been raised on behalf of the appellant in this case is that the mortgage made by Gulab Singh was void and as such the plaintiff was not entitled to a refund of the money advanced by him. In support of this contention a ruling reported in - Ode Ram v. Chhida Singh, AIR 1944 All 276 (A) has been cited. In this reported case the property mortgaged was ex-proprietary holding and it was held that a mortgage of ex-proprietary holding was void. Some other rulings have also been referred to in this reported case and all those cases relate to mortgages of occupancy holdings.
A mortgage or sale of occupancy holdings is void, but a mortgage or sale of a share in plots of which the transferor is the owner will not be void. If the transferor transfers a share in excess of his own share, the transaction would be valid so far as his share is concerned and would be invalid with regard to the share of the other co-sharers. In the present case Gulab Singh had a right to mortgage his share in the plots and as such the transfer could not be said to be void. The ruling has, therefore, no application to the facts of the present case. Gulab Singhs mortgage was valid in respect of his one-fourth share in the plots. 4. Section 68 of the Transfer of Property Act lays down that a mortgagee has a right to sue for the mortgage money where, by any cause other than a wrongful act or default of the mortgagor or mortgagee the security is rendered insufficient within the meaning of Section 66 of the Transfer of Property Act. The claim of the brothers of Gulab Singh in respect of three-fourths share in the property having been decreed, the property which was furnished as security for the loan had evidently been rendered insufficient and the plaintiff was, therefore, entitled to sue for his mortgage money under Section 68 of the Transfer of Property Act. The view taken by the Courts below appears to be correct. No other (point has been pressed in arguments.
5. As a result the appeal fails and is dismissed. As the respondent is absent I make no order as to costs.
Appeal dismissed.
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