1929 (8) TMI 9 - HC - Indian Laws

Court affirms mortgage bond validity, dismisses appeal with costs. Plaintiffs prove consideration, execution, and recitals.

S.K. Raghavendra Rao Versus Venkatasami Naickan and Ors.

The appeal was dismissed with costs. The Court affirmed the validity of the mortgage bond, finding the plaintiffs fulfilled the burden of proof regarding ... - Issues Involved:1. Validity of the mortgage bond execution.2. Burden of proof regarding the consideration for the mortgage bond.3. Impact of the mortgagor's insolvency on the mortgage bond.4. Allegations of the mortgage bond being nominal or collusive.5. Legal standing of the Official Receiver and subsequent purchasers.Issue-Wise Detailed Analysis:1. Validity of the Mortgage Bond ExecutionThe appellant (Official Receiver) contended that the mortgagor was not the managing member of the family at the time of the alleged execution of the suit bond and questioned the authenticity of the bond. The Court found that the mortgage bond was executed six years before the insolvency, distinguishing it from other nominal documents executed when the mortgagor was heavily involved in debt. The execution of the bond was thus considered valid.2. Burden of Proof Regarding the Consideration for the Mortgage BondThe appellant argued that the burden of proof was on the plaintiff to prove the consideration for the suit mortgage. The Court held that the burden of proof lies on the plaintiff to prove both execution and consideration when the defendant denies the transaction. However, once the execution of the document is proved, the recitals in the document serve as prima facie evidence of the passing of consideration. The Court concluded that the plaintiffs had made out a prima facie case by proving the execution of the document and the recitals therein, shifting the burden to the defendants to rebut the presumption.3. Impact of the Mortgagor's Insolvency on the Mortgage BondThe mortgagor had executed two mortgages in favor of his wife's brothers in 1913, which were declared void in insolvency proceedings. The appellant argued that the suit mortgage should also be considered collusive and nominal. The Court distinguished the circumstances of the suit mortgage, executed in 1908, from those of the 1913 mortgages, finding no evidence to suggest the suit mortgage was nominal or collusive.4. Allegations of the Mortgage Bond Being Nominal or CollusiveThe appellant relied on various circumstances to argue that the suit mortgage was nominal, including the production of the bond by defendant 2 before the Official Receiver and a statement in a proclamation that the suit mortgage was nominal. The Court found no substantial evidence to support these allegations, stating that the statement in the proclamation was self-serving and not evidence against the plaintiff. The Court also found no justification for construing a partition deed clause as indicating the suit document was nominal.5. Legal Standing of the Official Receiver and Subsequent PurchasersThe Court addressed the appellant's contention that as a stranger to the document, the burden of proof should lie on the plaintiffs. The Court clarified that the appellant, deriving interest from the mortgagor, stands in the shoes of the mortgagor and is not a stranger in the legal sense. The Court emphasized that the rule as to burden of proof does not vary based on the nature of the defendant but depends on the surrounding circumstances. The Court concluded that the plaintiffs had discharged their burden by proving the execution and recitals in the document, and the defendants had failed to rebut the presumption arising from the recitals.ConclusionThe appeal was dismissed with costs, affirming the validity of the mortgage bond and the plaintiffs' fulfillment of the burden of proof regarding the consideration. The Court found no substantial evidence to support the allegations of the mortgage bond being nominal or collusive.