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Mortgage and Charge Sale, Exchange, Gift:

Vidhyadhar v. Manikrao AIR 1999 SC 1441

ISSUE:

Does the plaintiff prove that Defendant 2 mortgaged the suit field with Defendant 1 for Rs. 1500 on 24-3-1971 ?

Does the plaintiff prove that the suit field was purchased by him from Defendant 2 for Rs. 5000 on 19-6-1973 ?

Is the plaintiff entitled to redeem the mortgage executed by Defendant 2 in favour of Defendant 1?

Was Defendant 2 ready and willing to purchase the suit field prior to 15-3-1971 ?

Is the plaintiff entitled to claim retransfer of the suit field from Defendant 1 ?

RULE:

A person in his capacity as a defendant can raise any legitimate plea available to him under law to defeat the suit of the plaintiff. This would also include the plea that the sale deed by which the title to the property was intended to be conveyed to the plaintiff was void or fictitious or, for that matter, collusive and not intended to be acted upon.

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Mortgage and Charge

Chaganlal v. Anantaraman, AIR 1961 Mad 415

M.C. CHAGANLAL SOWEAR V. P. ANANTARAMAN AND ANR

Chaganlal v. Anantaraman, AIR 1961 Mad 415

ISSUE:

  • Whether a mortgagee is entitled to treat interest due under a mortgage as a charge upon the mortgaged property in the absence of any contract to the contrary?

RULE:

  • Section 58(a) and 60 of the Transfer of Property Act.

FACTS:

  • The mortgage sought to be redeemed was executed on 20th March 1930 by the 2nd respondent and his undivided brother one Vaidyanathan, who died subsequently, for securing repayment of a sum of Rs. 2000 borrowed by them along with their uncle. On 5-3-1952 the second respondent sold the mortgaged property to the first respondent directing the latter to redeem the mortgage.
  • The first respondent offered to redeem the mortgage on payment of Rs. 2000, the principal amount, but the first defendant (appellant) refused the offer and insisted that besides the principal, the other sums including interest due under the provisions of the mortgage deed should also be paid before the mortgage could be redeemed.
  • Thereupon, the suit, O. S. No. 114 of 1952, was filed by the first respondent in the court of the District Munsit of Poonamallee.
  • The first respondent-plaintiff was entitled to the relief of redemption on payment of the principal sum of Rs. 2000 and as that sum has been deposited into court, he passed a preliminary decree for redemption. There was an appeal by the first defendant to the court of the District Judge of Chingleput.
  • The learned District Judge allowed the appeal and set aside the decree passed by the District Munsif and remitted the suit to the District Munsif for adjudication as to what would be the amount due to the mortgagee in the light of the observations made in his judgment.
  • The plaintiff would not be entitled to obtain redemption unless he paid also the other amounts including interest, which were payable under the deed of mortgage. Against the order of remand passed by the District Judge, there was an appeal to this court, C. M. A, No. 106 of 1956. Ramaswami Goundcr, J. allowed that appeal and restored the decree of the District Munsiff, but granted leave to appeal. Hence this appeal by the first defendant.

HELD:

  • The Madras High Court held that the construction placed on the material provisions of the mortgage deed by the learned District Judge was right and the learned Judge was wrong in holding that there was a contract contrary to the general rule that interest payable under a mortgage deed would also be charged to the mortgaged property and would be included in the mortgage money on payment of which alone the mortgagor would be entitled to obtain redemption of the mortgage.
  • The appeal was allowed and the order of the learned District Judge remitting the suit to the District Munsif for ascertaining the amount actually due under the mortgage is restored.
Categories
Mortgage and Charge

Ganga Dhar v. Shankar Lal, AIR 1958 SC 770

SETH GANGA DHAR V. SHANKAR LAL & ORS

Ganga Dhar v. Shankar Lal, AIR 1958 SC 770

ISSUE:

  • Whether a term period in a mortgage instrument, so far as it precludes the right to redeem from accumulating for a time, a clog on the equity of redemption?

RULE:

  • The rule in contradiction of clogs on the equity of redemption exemplified in Section 60 of the Act authorises the Court not only to dismiss a mortgagor of a bargain whereby in some conditions his right to redeem the mortgage is absolutely taken away, but also where that particular right is constrained.

FACTS:

  • On April 12, 1939, Dhanurpmal transferred his rights under the mortgage to Motilal who also died later and whose property is now being represented by his sons; they are the respondents in this appeal.
  • The property of Purshottamdas, who is the original mortgagor, is now also represented by his son, the appellant. Requesting a short-term loan without a job or payday monetary advance is the simplest thing to do and so is being eligible for it. There are only two easy limitations on it, such as, that you must have never evaded a prior payday loan and that you must have adequate income.
  • On April 12, 1939, Dhanurpmal transferred his rights under the mortgage to Motilal who also died later and whose property is now being represented by his sons; they are the respondents in this appeal.
  • The property of Purshottamdas, who is the original mortgagor, is now also represented by his son, the appellant. Requesting a short-term loan without a job or payday monetary advance is the simplest thing to do and so is being eligible for it. There are only two easy limitations on it, such as, that you must have never evaded a prior payday loan and that you must have adequate income.
  • On January 2, 1947, the complainant filed the suit in the Court of the Sub-Judge, Ajmere, alongside the respondents. The suit was challenged by the sons of Motilal, the assignee of the mentioned mortgage, who are the respondents appearing in the case appeal, who shall be henceforth mentioned as the respondents.
  • They stated that the suit was hasty as under the contract of mortgage there was no right of release for eighty-five years after the said date of the mortgage, till August 1, 1984.

HELD:

  • The Supreme Court held that the term provided for a period of eighty-five years was not a clog on the equity of redemption, and the mere length of the period could not by itself lead to an inference that the bargain was in any way oppressive or unreasonable.
  • The term was enforceable in law and the suit for redemption, filed before the expiry of the period was-premature.
  • Held, further, that the term that on the failure of the mortgagor to redeem within the specified period of six months, he would lose his right to do so and the mortgage deed was to be deemed to be a deed of sale in favour of the mortgagee, was clearly a clog on the equity of redemption and as such invalid but its invalidity could not in any way affect the validity of the other term as to the period of the mortgage, that stood clearly apart.
Categories
Mortgage and Charge

Pomal Kanji Govindji v. Vrajlal Karsandas Purohit, AIR 1989 SC 436 : (1989) 1 SCC 458

POMAL KANJI GOVINDJI V. VRAJLAL KARSANDAS PUROHIT

Pomal Kanji Govindji v. Vrajlal Karsandas Purohit, AIR 1989 SC 436 : (1989) 1 SCC 458

ISSUE:

  • Whether the terms and conditions in the mortgage deed dated 20.4.1943 amount to clog on the equity of redemption?
  • Whether the decree passed is bad for want of jurisdiction with trial court?
  • Whether the mortgagees are entitled to get interest on 10,000 koris?

RULE:

  • The rights and liabilities of the mortgagor are controlled by the provisions of section 60 of the Transfer of Property Act, 1882.

FACTS:

  • The plaintiff had filed a suit alleging that the deceased Karsandaswas their father andhe died in the year 1956, he had mortgaged the suit property to Kansara for 30,000 koris by a registered mortgage deed dated 20-4-1943.
  • Koriis a currency in the Kutch area it was in use till 1948.The koriwas replaced by Indian rupee.
  • When the mortgage transaction took place, the economic condition of the father of the plaintiffs was weak, he was heavily indebted to other persons.
  • Taking advantage of that situation, the mortgagees took mortgage deed from him on harsh and oppressive conditions by getting incorporated a long term of 99 years for redemption of mortgage.
  • Though possession was to be handed over to the mortgagees, they took condition for interest on the part of principal amount in the mortgage deed. Moreover, the mortgagees were given liberty to spend any amount they liked for the improvement of the suit property and were also permitted to rebuild the entire property.
  • A registered notice to the defendant’s nos. I and 2 were given to redeem the mortgage, but they failed to do so, hence, the present suit was filed to redeem the mortgage and to recover actual possession from the defendant’s Nos. 4 to 9 who were the tenants Inducted by the mortgagees.
  • Defendant No. 1 resisted the suit alleging that the term of the mortgage was for 99 years, so the suit filed before the expiry of that period was premature.
  • The defendant No. 3 resisted the suit by filing a written statement. The defendant’s Nos. 4 to 9 resisted the suit on the grounds that the plaintiffs were not entitled to redeem the mortgage and even if they were so entitled, they could not get actual physical possession from the tenants who were protected by the Bombay Rent Act, because they were inducted by the mortgagees.
  • Thereafter defendant No. 2/1 filed his written statement alleging that the suit was bad for non-joinder of the sisters of the plaintiffs as parties. Moreover, as per the terms and conditions of the mortgage deed, there was a usufructuary mortgage for 20,000 koris, and the remaining 10.,000 koris were advanced to the mortgagor at monthly interest at the rate of 1/2 per cent. There was a condition in the mortgage deed that the mortgagor would pay principal amount us well as the interest at the time of redemption.
  • When the suit was filed in the year 1972, the mortgagees were entitled to recover interest on 10,000 Koris for a period of 29 years, that the total mortgage amount along with interest would come to 47,400 koris equivalent to Rs. 15800 and the Civil Judge had no jurisdiction to try such suit; that the court fees was also not sufficient; that it was not true that the father of the plaintiffs was of weak economic condition.
  • There was mortgage transaction between the father of the plaintiffs and the mortgagees on 20th April, 1943, that the terms and conditions in the mortgage deed being harsh and oppressive, amounted to clog on equity of redemption, so the plaintiffs were entitled to file the suit even before the expiry of the term of the mortgage; that the sisters of the plaintiffs were not necessary parties to the suit and even if they were, a co-mortgagor was entitled to file the suit for redemption so the suit was not bad for want of non-joinder of necessary parties; that it had jurisdiction to try the suit; that the mortgagees were not entitled to claim interest on 10,000 koris and that the plaintiffs were entitled to recover possession from the defendants Nos. 4 to 9 who were the tenants inducted by the mortgagees.

HELD:

  • The Supreme Court held that the appeals filed by the mortgagees as well as the tenants were dismissed by the first appellate Court holding that the terms and conditions of the mortgage deed were oppressive and harsh.
  • There was clog on equity of redemption and the mortgagor should be freed from that bondage that the tenants had no right to he in possession and were not entitled to the protection of the Bombay Rent Control Act after the redemption of the mortgage.