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GUJARAT HIGH COURT
Biren Vaishnav and Nisha M. Thakore, JJ.
Tushar Naranbhai alias Nalinbhai Patel – Appellant
versus
Kishorchand Kalidas Parekh and Ors. – Defendants
R/First Appeal No.2308 of 2018 with Civil Application (For Stay) No.1 of 2018 in R/First Appeal No.2308 of 2018
Decided on 17.9.2024
(A) Civil Procedure Code, 1908 – Order VII Rule 11—Rejection of plaint—Suit for specific performance, permanent injunction and declaration—In Special Civil Suit, principal prayer of plaintiff-appellant of specific performance which was based on perception of appellant plaintiff that deed of mortgage was a mortgage by conditional sale and there was an ostensible sale was misconceived—That was a specific case made in plaint which was entire foundation of plaint for specific performance against a person claiming to be owner of such land—There is nothing in mortgage deed to suggest automatic sale—It is a clear case of document of mortgage being that one which can be termed as usufructuary mortgage—Since Trial Court rightly interpreted document in light of provisions of Transfer of Property Act when the document on face of it was not a mortgage by conditional sale, Trial Court committed no error—Cause of action that was set out in plaint was purely illusory—Appeal dismissed.(Paras 6.10, 6.17, 6.18 and 7)
(B) Transfer of Property Act, 1882—Section 60—Civil Procedure Code, 1908—Order 34 Rules 7 and 8—Redemption of mortgage—Mortgagor has right to redeem at any time provided his right is so extinguished by act of parties—Act of parties means that parties have to foreclose such a right of redemption by execution of a registered document—Right to redemption of a mortgagor is a statutory right and can be taken away only in terms of a proviso appended to Section 60 of Act—In the facts of case, in absence of a positive act of parties by a registered instrument in extinguishing right of a mortgagor, limitation shall not begin to run.(Paras 6.13 and 6.15)
Result: Appeal dismissed.
JUDGMENT (CAV)
Biren Vaishnav, J.—This First Appeal is filed by the original plaintiff. The challenge is to the judgement and decree dated 25.04.2018 passed by the learned Principal Senior Civil Judge, Gandhinagar in Special Civil Suit No.178 of 2017. By the aforesaid judgement, the learned Trial Judge entertained an application under Order VII Rule XI(a) and (d) on behalf of the defendant nos.2 and 3 –respondent nos.2 and 3 herein and dismissed the suit of the appellant.
2. Facts in Brief:
2.1 The appellant filed a Special Civil Suit for specific performance, permanent injunction and declaration. The narrative in the plaint was as under:
(a) The suit was filed for agricultural land at Ahmedabad, sub-district Gandhinagar, Taluka:Gandhinagar, Mouje Gam Zundal, Revenue Khata No.473, Block Survey No.483 admeasuring 10218 square meters.
(b) According to the plaintiff, during the course of negotiations, the defendant no.1 had confirmed that he was the sole and absolute owner of the suit land and therefore competent to sell.
(c) It was decided and agreed that the plaintiff will pay Rs.36,00,000/- in installments to the defendant no.1. Initially payment of the Rs.20,00,000/- in four equal installments and the balance of Rs.16,00,000/- would be paid. The case of the plaintiff was that four cheques of Rs.5,00,000/- each had duly been received by the defendant no.1.
(d) The parties decided to execute a sale deed for which a visit was made at the office of the sub-registrar where one Ghanshyamji Chamanji, defendant no.3/4 had lodged objections on 13.06.2017.
(e) Having come to know of some disputes pending between defendant no.1 and defendant nos.2 to 5, a Banakhat was thereafter executed on 25.06.2017 between defendant no.1 and the plaintiff.
(f) According to the plaintiff, the Banakhat made a clear disclosure on the part of the defendant no.1 that he had acquired the land as a legal heir of Nathiben who was a mortgagee. Late Ranaji Bhaluji Thakore, a mortgagor had entered into a mortgage by conditional sale on 27.04.1943, inter-alia, one of the conditions being that in the event the mortgagor fails to pay a debt of Rs.475/- within a period of five years then the mortgagee will be entitled to get the ownership of the mortgaged land. By virtue of this conditional sale, the defendant no.1 was the owner.
(g) The plaintiff’s case further was that the defendant no.1, in collusion with defendant nos.2 to 5, executed a release deed dated 13.09.2017 on being paid Rs.21,00,000/-. Such a release deed was bad and the defendant No.1 had legal obligation to execute the Banakhat on the payment of remaining consideration of Rs.16,00,000/-.
2.2 The case of the defendant no.2 and 3 in the suit, through the written statement, after listing a chronology of events and dates was that the mortgage was not a mortgage by conditional sale. As the mortgage deed was not a mortgage by conditional sale, the defendant no.1 had no right to execute a Banakhat as he was not the owner of the property, land in question. That revenue entries made as a result of the execution of a mortgage deed did not confer ownership rights on defendant no.1.
2.3 The defendant nos.2 and 3 further stated that the suit filed by defendant no.1 being RCS No.171/2010 for a declaration that he is the owner of the land, was dismissed for want of prosecution on 31.08.2016.
2.4 The deed of 27.04.43 was not a mortgage by conditional sale as per Section 58(c) of the Transfer of Property Act. In fact, after the execution of the mortgage deed, the possession remained with the mortgagor Ranaji and Bai Nathu went abroad and in the year 2010 an amount of Rs.400/- was paid to her relative and as decided, the remaining amount of Rs.75/- would be paid to her on her return to India. Even after her death the disputed revenue entries in favour of the mortgagee were an issue of revenue litigation. The defendants also namely defendants 2 and 4 had filed a Regular Civil Suit No.146 of 2010. For a d
Redemption of mortgage – Mortgagor has right to redeem at any time provided his right is so extinguished by act of parties.
Redemption of mortgage – Unregistered mortgage deed – Undertaking to create a charge, in absence of a registered mortgage deed does not vest any legal interest in immovable properties.
The court reaffirmed that redemption rights hinge on compliance with mortgage conditions; failure to meet obligations nullifies claims to recover property.
Mortgage rights cannot be extinguished by an unregistered document; valid legal processes are required to affect mortgage rights.
A sale deed must explicitly state conditions for re-transfer to qualify as a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act.
The intention of parties in a transaction determines its nature, and the title of the document is not solely decisive in classifying it as a mortgage by conditional sale or an absolute sale.
The main legal point established is that the nature of a sale deed, the right to repurchase, and the applicable limitation for the suit are crucial factors in determining the outcome of property disp....
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
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