TaxTMI 
TaxTMI 
1996 (5) TMI 434
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....een dismissed. 3. It is an admitted fact that one K. Ramankutty alias Lingam is the husband of the 1st plaintiff Smt. Valsula Devi and father of the remaining 5 plaintiffs of OS No. 24/84. Similarly, the 1st defendant was the husband of the 2nd defendant and father of the remaining defendants Nos. 3 to 7 of the suit. It is also an admitted fact that the 1st defendant Habeeb Khan expired during the pendency of the suit and before the commencement of evidence in this case. 4. It is no longer in controversy before me that in OS No. 2/ 72, one Chinna Manyiamma and K. Ramankutty alias Lingam were declared co-owners having equal share in Amba Bhavan and in appeal before the High Court Chinna Manyiamma transferred her half share in Amba Bhavan for a consideration of Rs. 29,000/-(Rupees Twenty Nine Thousand only) in favour of K. Ramankutty alias Lingam vide a compromise decree passed by the High Court on 14-4-1978. 5. The plaintiffs in OS 24/84 have alleged that in order to pay Rs. 29,000/- to Chinna. Manyiamma, the 1st plaintiff and her husband K. Ramankutty alias Lingam were in need of money and the 1st defendant agreed to advance a loan of Rs. 30,000/ - to them on condition tha....
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....eement to sell Ex. Bl and the sale deed Ex. B2, though the 1st plaintiff and her husband K. Ramankutty alias Lingam had mortgaged Amba Bhavan and the suit land to the 1st defendant for a total loan amount of Rs. 47,000/- on interest at the rate of 18% per annum and handed over the possession of Amba Bhavan and the suit land for a period of 5 years and it was agreed that after completion of 5 years the usufruct of the, Amba Bhavan would be adjusted against the loan amount and interest and after payment of the remaining amount, if any, the 1st defendant would re-deliver Amba Bhavan and the suit land to them. The value of Amba Bhavan at the relevant time was Rs. 3,00,000/- and the value of the suit land was Rs. 25,000/- and, therefore, all the aforesaid agreements and sale deeds are unconscionable and hence they are void. In the meantime, the 3rd defendant had filed a suit for permanent injunction against the 1st plaintiff and her husband K. Ramankutty alias Lingam bearing No. OS 49/78 and obtained their signatures on blank papers and blank Vakalat and misrepresented that the suit had been filed only to restrain them for a period of 5 years from disturbing his possession in the balcon....
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....injunction had been passed in that suit against them. They further denied that the agreement to sell, Ex. B-l, was obtained against the alleged amount of interest. They further denied that the 1st defendant had advanced a loan of Rs. 7,000/- on 30-3-1980, and had obtained a sale deed Ex. B-2 in favour of the 2nd defendant. They pleaded that K. Raman-kutty alias Lingam voluntarily executed the sale deed Ex. B-2 in favour of the 2nd defendant for a valid consideration of Rs. 7,000/- and had handed over its possession to her. The husband of the 1st plaintiff and the father of the remaining plantiffs namely K. Ramankutty alias Lingam is alive and he was the exclusive owner of Amba Bhavan and the suit land and, therefore, the plaintiffs have no cause of action in the suit. They also pleaded that the 4th defendant is not necessary or proper party to the suit and, therefore, the suit is bad for misjoinder of the party. They also pleaded that the suit is not within limitation and the Court has no jurisdiction to try the suit. They pleaded that the suit is liable to be dismissed with costs. 7. The 3rd defendant filed a suit bearing No. OS 11/84 against the 1st defendant and her husband f....
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.... v. G. Ramaswamy, AIR 1971 Orissa 58 and Ramprasad v. Smt. Kalyani, . On the authority of Martand Trimbak v. Amritrao, AIR 1925 Bombay 501, Belapur Co. v. State Farming Corporation, , Firm Bolumal v. V. Rao, and Raj Kumar Rajindra Singh v. State of Himachal Pradesh, , it has been argued by Sri P. S. Murthy, the learned Advocate of the appellants that oral evidence cannot be adduced to invalidate a sale deed vide S. 92 of the Indian Evidence Act and by virtue of S. 91 of the Indian Evidence Act, the evidence adduced by the respondents to explain the terms of the documents in question should be excluded. It is also urged on behalf of the appellants that all the mortgagors are necessary parties in mortgage suit. There is no evidence on record that K. Ramankutty alias Lingam was dead at the time of the institution of the suit. He was not made a party to the suit, therefore, the suit for redemption of mortgage is not maintainable vide A. Gangadhara Rao v. G. Gangarao, and Nalla Venkateshwarlu v. Porise Pullamma, . 13. On the other hand, relying on Tyaga-raja v. Vedathanni, AIR 1936 PC 70; Su-kumar Bysack v. S. K. Banerjee, ; Gangabhai v. Chhabubai, and Gaffer v. Sha Jehan Begum, 1980....
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....for in.the finding of facts and all the appeals are liable to be dismissed. 14. The main question that falls for determination is whether the sale deed Ex. B-3, agreement to sell, Ex.B-1 dated 7-8-1978 and the sale deed Ex.B-2 dated 30-3-1980 were out and out sale deeds and agreement to sell respectively or nominal documents and in reality they are anomalous mortgage deeds? 15. Before I proceed to decide the aforesaid question, it is to be examined if on the face of the apparent tenor of the documents, and the bar against oral evidence contained in Ss. 91 and 92 of the Indian Evidence Act, it is possible to do so? 16. In the case of Martand Trimbak v. Amritrao (supra), a Division Bench of the Bombay High Court has held that it is not permissible to consider the surroundings with a view to hold that document which on the face of it is a sale deed was intended to operate as a mortgage deed with the aid of proviso 6 of S. 92 of the Indian Evidence Act. In Belapur Co. v. State Farming Corporation (supra), a single Bench of the Bombay High Court has held that when the terms of the contract have been reduced to writing, extrinsic evidence as to what transpired subsequent 10 the ....
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....ature of the transaction was a loan for which the document was a security. In this case reliance has been placed on Tyagaraja v. Veddathanni (supra) decided by Privy Council, wherein it is held that oral evidence is admissible to show that document executed was never intended to operate as agreement, but was brought into existence solely for creating evidence of some other matter. 18. The case of Tyagaraja v. Vedathanni (supra) was quoted with approval in the case of Gangabhai v. Chhabubai (supra) and it is held by the Apex Court : ". . .the bar imposed by sub-sec. (1) of S.92 applies only when a party seeks to rely upon the document embodying the terms of the transaction. In that event, the law declares that the nature and intent of the transaction must be gathered from the terms of "the document itself and no evidence of any oral agreement or statement can be admitted as between the parties to such document for the purpose of contradicting or modifying its terms. The sub-section is not attracted when the case of a party is that the transaction recorded in the document was never intended to be acted upon at all between the parties and that the document is a sham. Such ....
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....hat she and her husband K. Raman- kutty alias Lingam had contacted 4 to 5 persons for loan, but she could not succeed. Therefore, she and her husband approached the 1st defendant who agreed to advance loan of Rs. 35,000/- on condition that it would carry interest at the rate of 18% per annum, that possession of Amba Bhavan would be delivered to him for a period of 5 years and an agreement to sell Amba Bhavan would have to be executed in favour of his sons that is the 3rd and 4th defendants showing an amount of Rs. 60,000/- as consideration and receipt of Rs. 35,000/- as advance. As she was badly in need of money, she and her husband agreed to the aforesaid terms and they obtained a loan of Rs. 35,000/- on 31-3-1978 and an agreement to sell in favour of the 3rd and 4th defendants was executed which is at Ex.A-1 and possession of Amba Bhavan was delivered to him. Abdul Ahed and Umapathi PW-2 attested the document Ex.A-1. Out of this amount, they paid Rs. 29,000/- to their aunt Chinna Manyiamma as per the terms of the compromise with her. She further stated that a month later, they required an amount of Rs. 5,000/- and therefore they again approached the 1st defendant for loan who agr....
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....anding between the parties was only to mortgage Amba Bhavan for the loan amount. Interest was settled at the rate of 18% per annum for a period of five years and the possession of Amba Bhavan was agreed to be handed over to the 1st defendant for a period of five years after which it was agreed that they would settle accounts. He has also stated that the value of the plot was Rs. 25,000/- in the year 1980, 27. In cross-examination, Valasula Devi, PW-1, has admitted that by virtue of the compromise decree, Ex, A-11, Amba Bhavan became the property of her husband only. At the time of talks about loan, Mahmood Khan, Shahbaz Khan and Umapathi, PW-2, were present. She has denied that the ground floor of Amba Bhavan was sold to the 1st defendant for a valid consideration of Rs. 40,000/-. True that she has wrongly stated that it is mentioned in the document Ex.A-1 that the property has been mortgaged for a period of five years. But, it appears to be inconsequential because she has also stated that the said agreement was not read over and explained to her and, therefore, it can be inferred that under the impression that the mortgage deed was executed through document Ex.A-1 she has state....
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....f the entire Amba Bhavan building was handed over to the defendants on 9-5-1978 or on 10-5-1978. When questioned, whether he would examine Abdul Ahed, on his behalf, he asserted that he would not examine Abdul Ahed on his behalf. 30. In the case of Gopal Krishnaji v. Mohd. Haji Latif, , it is held that even if the burden of proof does not lie on a party the Court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts in issue. It is not in our opinion a sound practice for those desiring to rely upon a certain state of facts to withhold from the Court, the best evidence which is in their possession which could throw light upon the issues in controversy and to rely upon the abstract doctrine of onus of proof. 31. Again in the case of Patel Naranbhai v. Dhulabhai, , the best evidence namely the notification to conduct sale for arrears, the sale proceedings and the certificate of sale had not been placed on record. Under these circumstances, it observed by the Apex Court that the material evidence which clearly established that the said sale was withheld by the appellant and, therefore, had drawn adverse inference ag....
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....ansaction and he had simply signed as a witness to do the formality on the mere asking. 35. Mamood Khan, DW-1, has testified that he had entered into an agreement to purchase the 1st floor of Amba Bhavan because the only way to reach the 1st floor was from its grounds floor. He further stated that he had purchased the 1st floor of Amba Bhavan for a consideration of Rs. 35,000/-out of which he paid Rs. 33,000/- at the time of the agreement to sell Ex.B-1. He was having only Rs. 15,000/- at that time and, therefore, he borrowed Rs. 10,000/- from one Kaleemuddin of Nirmal village and Rs. 8,000/- from one Akhtar Hussain. He repaid the loan amounts to them in the month of December, 1978 only. It is pertinent to note that according to Mamood Khan, DW-1, his only source of income at the relevant time was from agriculture and the net income per year was Rs. 10,000/- only. If that was so, it was impossible for him to have repaid the amount of Rs. 18,000/- in the month of December, 1978 which was alleged to have been taken by him in the month of August, 1978, The financial position of the 1st defendant at that time appeared to be very good. There appears to be no reason as to why he did n....
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....cate, that they need not appear in the Court. The certified copy of the plaint is at Ex.A-5 and the certified copy of the written statement is at Ex.A-6 and the certified copy of the decree is at Ex.A-8. She came to know about the judgment and decree only after receiving summons in O.S. No. 11/84 which had been filed by the 3rd defendant for specific performance of the agreement to sell. 37. As against that Mamood Khan, DW-1, has stated on oath that within two months from the date of execution of the agreement, Ex.B-1, the 1st plaintiff and her husband started demanding payment of Rs. 2,000/ - and also tried to encroach on the balcony of the 1st floor of Amba Bhavan and, therefore, he filed a suit against them in which they filed a written statement admitting the claim as set out in the plaint and a decree in his favour was passed by the Court. He denied that signatures of the 1st plaintiff and her husband had been taken on blank white papers as also on the Vakalat. 38. In cross-examination, Mamood Khan, DW-1 had stated that he could not say as to how many days or how many months or how many years after the date of agreement of sale Ex.B-1, he had instituted the suit O.S. No.....
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....lacing his case before the Court, as fully as he would do, but for the act of the defendant by playing a trick upon the Court and also upon the plaintiff and the witnesses to prevent the truth being discovered, or by misrepresentation preventing the plaintiff from conducting his case properly in the previous suit against him, the decree should be set aside." 41. It is well settled that in order to establish undue influence in a case of nature of inter vivos transactions as is embodied in S. 16 of the Indian Contract Act, 1872, two important things must be proved; one, that the relation between the parties was such that the vendee or the donee was in a position to dominate the Will of the vendor or the donor and he has used that position to obtain an unfair advantage over the vendor or the donor and it is insufficient for a person seeking the relief to show that the relations of the parties have been such that one naturally relied upon for the advice and the other was in a position to dominate the Will of the first in giving it. 42. So far as the question of practising the undue influence or fraud on the 1st plaintiff and her husband by the 3rd appellant is concerned, it is to....
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....ecution of the agreement to sell Ex.B-1 has been mentioned particularly because the decree for declaration Of title had not been passed against her and her husband and she has explained under what circumstances the admission was made in the written statement Ex.A-6. 44. Mamood Khan, DW-1, has admitted in cross-examination that the ground floor of Amba Bhavan was let out for arrack depot on a monthly rent of Rs. 1,000/- by them, but he has given an evasive reply in cross-examination that he does not remember when it was leased out and for how many years it was leased out for arrack depot. Thus, from his evidence it is established that the annual letting of the ground floor of Amba Bhavan was Rs. 12,000/- at the relevant time, from which it can be safely inferred that the market value of the ground floor of Amba Bhavan at the relevant time was much more than Rs. 40,000/- as mentioned in the sale deed Ex.B-3. The amount of consideration shown in the sale deed Ex.B-3 appears to be very low. 45. The agreement to sell Ex.A-1 bears the signature of Abdul Ahed who had also purchased the stamp on 5-5-1978 for K. Ramankutty alias Lingam which is at Ex.A-2 and in which it is mentioned t....
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.... be said to be fabricated for two reasons. The 1st reason is that there is no allegation made in the written statement by the appellants The 2nd reason is that admittedly the stamps were purchased in the month of 28th March and 11th April, 1978 and not in the year 1983 when there was an alleged break of service of Abdul Ahed. Abdul Ahed was the best person to speak about the transaction, but as noted above, the appellants have Withheld his evidence. 49. For the foregoing reasons, agreeing With the learned lower Court, I reach the conclusion that the documents Ex.A-1 and Ex.A-2 are genuine documents. The value of the ground floor of Amba Bhavan as mentioned in the Ex.B-3 appears to be very low. The 1st respondent and her husband K. Ramankutty alias Lingani were badly in need of money. K. Ramankutty bore the expenses for purchasing the stamps as also the registration charges. Possession of the ground floor as also the 1st floor of Amba Bhavan was handed over to the 1st defendant with the execution of the agreement Ex.A-1 because there was no access to the 1st floor except through the ground floor of Amba Bhavan. Therefore, it cannot be said that possession of Amba Bhavan was deliv....
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....ft. and the value of this plot was Rs. 7,000/- or Rs. 8,000/- in the year 1978. He has also admitted that Chinna Manyiamma had sold the plot measuring 30 ft. x 60 ft, with foundation for a consideration of Rs. 8,000/-on 2-7-1977. Though he has stated that there was some cross in that plot and therefore it was sold for Rs. 8,000/-, but has admitted in the next sentence that the fact that there was some cross in the plot has not been mentioned in the sale deed in question. This plot is situated at a distance of about 165 ft. from the plot sold by Chinna Manyiamma. He had further stated that on 19-2-1980, Chinna Manyiamma sold a plot measuring 30 ft. x 60ft. with a flour mill for Rs. 26,500/- and this plot is situated opposite to Amba Bhavan separated by a road. Thus, from the evidence of Ulhas, PW-4, it appears that the value of the suit plot was Rs. 7,000,'- or Rs. 8,000/- in the year 1980, particularly because he has stated that he has no data on the basis of which he has stated that the value of the suit plot was Rs. 20,000/- in the year 1978. 53. On the other hand, from the evidence of Mamood Khan, DW-1, it is revealed that the value of the suit plot was about Rs. 7,000/- ....
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....e Allahabad High Court has held that in cases of void mortgages which under the law could not be mortgaged, the mortgagor is entitled to recover possession subject to payment of the money received from the mortgagees and no question of limitation arises in the case. The possession of the mortgagee is permissible possession and the only right he has is to be allowed to claim the money which the mortgagor has received from him and in this view of the matter, the plaintiff is entitled to get back possession of the property. This case has been followed in the case of Kaushal Singh v. Ghanshiam Singh (supra). In this case, the mortgagor instead of bringing a suit for possession brought a suit for redemption though the mortgage was void. A single Bench of the Allahabad High Court has held that there can be no good ground for refusing the plaintiff relief asked for or strictly speaking the relief to which he is entitled. It has always been open to the Court to grant the party entitled to a relief other than what he has asked for, any appropriate relief to which he might be entitled. The form of suit is of no consequence unless it has the effect of prejudicing the opposite party in his def....
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....by virtue of Order 34, Rule 1 of the Code of Civil Procedure, all persons having an interest either in the mortgage-security or in the right of redemption should be joined as parties to any suits relating to the mortgage. The respondents should have impleaded K. Ramankutty alias Lingani because he was a necessary party and not impleading him as a party is fatal to the case of the respondents. It is also urged on behalf of the appellants that actually K. Ramankutty alias Lingam is the exclusive owner of Amba Bhavan and, therefore, the other respondents arc not entitled to bring a suit for redemption of mortgage because he was alive at the time of the institution of the suit and no presumption under S. 108 of the Evidence Act could be drawn that he was dead at the time of the institution of the suit. 62. A Division Bench of the" Rajasthan High Count in the case of Dwaraka Prasad v. Gopi Nath, , has held that Order 34, Rule 1 is a rule of mere procedure and it is controlled by the provisions of Order 1, Rule 9 of the Code of Civil Procedure. A suit for enforcement of the mortgage security or the redemption of mortgage is not necessarily liable to dismissal if all persons having int....
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.... or civil death of K. Ramankutty alias Lingam under S. 108 of the Evidence Act can be safely drawn after the year 1987 and this presumption tantamounts to physical death in the eye of law for giving the heirs of K. Ramankutty alias Lingam right to file the suit. 66. It is true that on the date of the institution of the suit, it could not be presumed that K. Ramankutty alias Lingam was dead. But during the pendency of the suit, the period of 7 years has elapsed and the right to file the suit for redemption of the mortgage accrued to the respondents. Even if it is presumed that only K. Ramankutty alias Lingam had got the right to file the suit for redemption of mortgage this subsequent event cannot be lost sight of and it would be unfair to non-suit the respondents on the technical ground that the suit was premature at the time of institution after a period of long 12 years of litigation and to drive them to file a fresh suit for redemption of mortgage. Under the aforementioned peculiar circumstances of the case, the procedural ponderables and technical troubles such as the case in hand should not be permitted to obstruct the path of justice and deprive rightful claim even though ....
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....ry. Therefore, the submission made on behalf of the appellants that the respondents should have valued and paid the court fees for cancellation of the sale deeds has no force. So far as the relief of cancellation of the decree is concerned, the allegation in the plaint was that it has been obtained by practising fraud and misrepresentation and, therefore, it is not binding on the 1st respondent and her husband. The relief of cancellation of the sale deed and/or setting it aside was an ancillary relief to the main relief of redemption of mortgage and, therefore, there appears to be no need for payment o court fees for cancellation or setting aside the decree passed in O.S. No. 49 /1978. 70. In the case of Mhadagonda Ram-gonda Patil v. Shripal Balwant Hainadc, , it is held that even in the case of mortgage interest amount cannot exceed the principal amount because the rule of 'Damdupt' is an equitable rule debarring the creditor to recover interest amount which is more than the principal amount and it cannot be recovered by the creditors. 71. It is interesting to note that the respondents themselves have pleaded in para 9 of the plaint that they are willing to pay an in....
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....urt. But in view of the stay in appeal, equities may be worked out. 75. In result, the appeal bearing No. AS 2702/89 and the appeal AS 2703/89 are dismissed and the decree of dismissal of the suit No. OS 11/84 is maintained. Similarly though holding that the 2nd appellant is the owner of the suit land in OS No. 5/89, the judgment and decree of dismissal of that suit is hereby maintained. The appeal No. 2612/ 89 is partly allowed. Modifying the decree for redemption of the mortgaged property, that is Amba Bhavan, it is declared that only Amba Bhavan was mortgaged with possession to the 1st defendant, since dead, and a preliminary decree is passed in favour of the respondents, and against the appellants for redeeming the anomalous mortgage, that is Amba Bhavan, by making payment of the mortgage amount with interest at the agreed rate amounting to Rs. 87,312.50 upto the date of institution of the suit and pendente lite interest at the rate of 12% per annum on the amount of Rs. 40,000/- till the date of decree. It is further ordered that the net income of Amba Bhavan will be assessed from the date of Mortgage, that is 31-3-1978, till the date of the decree passed by the lower Court ....