Back
2023 Supreme(Online)(Mad) 93081
MADRAS HIGH COURT
R. Hemalatha, J
Poongodi – Appellant
Versus
Shanthi – Respondent
S.A.No.409 of 2023 | C.M.P.No.12576 of 2023
For the Appellants/Petitioners: D.Ramesh Kumar
An unregistered sale deed is inadmissible to confer title for immovable property valued above Rs. 100, and where a mortgagee occupies the property as a tenant prior to the mortgage, their continued possession is legally characterized as permissive occupation in lieu of interest, permitting mortgage redemption.
Headnote:(A) Transfer of Property Act, 1882 - Section 54 - Sale of immovable property - Unregistered sale deed - Admissibility - An unregistered instrument for the property exceeding the value of Rs. 100/- is invalid for the purpose of transferring title - Sale can only be effected by a registered instrument. (Para 13)
(B) Mortgage - Types of mortgage - Simple vs Usufructuary - Conduct of parties - Where possession of the property was already with the mortgagee as a tenant and continued after the mortgage deed, the nature of possession is treated as permissive occupation in lieu of interest even if not expressly stated in the mortgage deed. (Para 13)
Facts of the case:
Parties were involved in a dispute over a property originally mortgaged by the owner to the defendant for Rs. 1,00,000. While the primary agreement was a simple mortgage, the defendant (mortgagee) claimed title over the property via an unregistered sale deed executed on the same date as the mortgage. The plaintiffs, legal heirs of the deceased owner, filed a suit for redemption of the mortgage, while the defendant refused possession, claiming ownership.
Findings of Court:
Both the trial court and the appellate court concurrently held that the unregistered sale deed was inadmissible to prove title and that the defendant's possession, originally as a tenant, retained the character of permissive occupation in lieu of interest for the mortgage amount.
Issues: Whether the defendant acquired title through an unregistered sale deed and whether the plaintiff is entitled to redeem the mortgage.
Ratio Decidendi: An unregistered sale deed for property worth more than Rs. 100 is inadmissible for proving title, and evidence of the conduct of parties—specifically the transition from tenancy to permissive possession—establishes the nature of the transaction as one involving the adjustment of rent towards mortgage interest.
Result: Second Appeal dismissed.
| Table of Content |
|---|
| 1. overview of mortgage dispute, pleadings, and trial court proceedings. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. evaluation of unregistered instruments and the character of mortgagee possession. (Para 8 , 9 , 10 , 11 , 12 , 13) |
| 3. final affirmation of lower courts and dismissal of appeal. (Para 14 , 15) |
JUDGMENT
The first defendant who failed before both the Courts below had filed the present second appeal. The respondents/plaintiffs filed the suit in O.S.No.57 of 2007 on the file of the District Munsif cum Judicial Magistrate, Thirukazhukundram, for redemption of mortgage.
2. For the sake of convenience, the parties are referred to as per their ranking in the trial court and at appropriate places, their rank in the present second appeal would also be indicated.
3. The case of the plaintiff in nutshell is as follows:
The plaintiff and her husband T.V.Panchaksharam had borrowed a sum of Rs.1,00,000/- from the defendant and executed a registered simple mortgage (Ex.A1) on 27.03.2003 through which the suit property, which was a portion of the super structure constructed by late T.V.Panchaksharam (husband of the first plaintiff), was mortgaged. The plaintiff's husband entered into a lease agreement with the second defendant in respect of the suit property belonging to them and he was also paying rents to the second defendant. Even though the mortgage was a simple mortgage, the first defendant was orally permitted to occupy the property mortgaged by the plaintiff's husband in lieu of interest for the amount borrowed under the mortgage. Since T.V.Panchaksharam was indisposed, he could not discharge the mortgage loan and ultimately he died on 04.07.2004, leaving behind the plaintiff and his two minor sons to succeed to his estate. The plaintiff, as one of the legal heirs of the deceased T.V.Panchaksharam, is entitled to redeem the mortgage. Though the plaintiff approached the first defendant on several occasions and offered to pay the entire principal sum of Rs.1,00,000/- towards discharge of the mortgage loan, the first defendant refused to receive the same and thereafter, the plaintiff issued a legal notice (Ex.A5) to the first defendant and the first defendant after receiving the said notice sent a reply notice dated 23.06.2007 (Ex.A6) which, according to the plaintiff, contained false allegations. The plaintiff also sent a rejoinder dated 05.07.2007 (Ex.A7) to the first defendant. Since the first defendant did not come forward to receive the mortgage loan amount, she was constrained to file the present suit for redemption of mortgage.
4. The suit was resisted by the first defendant on the following grounds:
i. It is true that the plaintiff's husband T.V.Panchaksharam borrowed a sum of Rs.1,00,000/- from the first defendant and executed a simple mortgage deed dated 27.03.2003 (Ex.A1) and the rate of interest was fixed at 24% per annum.
ii. The plaintiff's husband never paid any interest towards mortgage loan. The contention of the plaintiff in her plaint that though the document is only a simple mortgage, the first defendant was orally permitted to occupy the property mortgaged by her husband in lieu of interest for the amount borrowed under the mortgage deed is totally false.
iii. The plaintiff's husband was badly in need of money and therefore he sold the portion of the property to the first defendant for a valuable consideration and the first defendant is in possession of the same. Since a portion of the suit property belongs to the second defendant, the sale deed could not be registered.
iv. The allegations in the plaint that the plaintiff approached the defendant on several occasions and offered to pay the entire principal amount is totally false. The first defendant is not bound to deliver the possession of the suit property to the plaintiff, since the mortgage is a simple mortgage and the plaintiff has to pay interest amount towards the said mortgage amount. He therefore prayed for dismissal of the suit.
5. The sec
