2014 (4) TMI 1134 - SC - Indian Laws

(1) Whether Exh.A1, the mortgage deed dated 1909-1910 is a valid mortgage deed and even if it is so, whether it is a simple or usufructuary mortgage in terms of Sections 58(b) and 58(d) of the Transfer of Property Act, 1882? (2) Whether the concurrent finding of the Appellate Authority in its judgment passed in AA No. 216 of 1994 is based on legal evidence on record and in accordance with law? (3) Whether the finding recorded in the impugned judgment by the High Court in exercise of its revisional jurisdiction with regard to possession of the property holding that the appellant is not in possession under the document Exh. A1- mortgage deed, and therefore, he is not the deemed tenant of the land in question under Section 4A of the K.L.R. Act, is legal and valid? All the three points decided against the appellant.

Summary

Issues Involved:
1. Validity of the mortgage deed (Exh.A1) under the Indian Contract Act, 1872.
2. Nature of the mortgage deed (simple or usufructuary) under the Transfer of Property Act, 1882.
3. Legality of the concurrent findings of the Appellate Authority.
4. Validity of the High Court's judgment regarding possession and deemed tenancy under Section 4A of the Kerala Land Reforms Act, 1963 (K.L.R. Act).

Issue-wise Detailed Analysis:

1. Validity of the Mortgage Deed (Exh.A1) under the Indian Contract Act, 1872:
The mortgage deed (Exh.A1) was executed by the uncle of the appellant and the first respondent in favor of the deceased mother of the appellant as collateral security for the dowry amount. At the time of execution, the mortgagee (appellant's mother) was 15 years old, thus a minor. According to Section 11 of the Indian Contract Act, 1872, a minor is not competent to contract. The Privy Council in Mohori Bibee v. Dharmodas Ghose held that a minor's contract is void. Therefore, the mortgage deed is void ab initio as it was executed in favor of a minor without her being represented by a guardian. Consequently, the appellant cannot claim any rights under this void mortgage deed.

2. Nature of the Mortgage Deed (Simple or Usufructuary) under the Transfer of Property Act, 1882:
Even if the mortgage deed were considered valid, it would be classified as a simple mortgage under Section 58(b) of the Transfer of Property Act, 1882, rather than a usufructuary mortgage under Section 58(d). The deed did not deliver possession of the property to the mortgagee nor did it authorize the mortgagee to receive rents and profits from the property. The mortgagor agreed to pay interest and the principal amount, indicating it was a simple mortgage. The Supreme Court in Pratap Singh @ Babu Ram & Anr. v. Deputy Director of Consolidation, Mainpuri & Ors. emphasized that delivery of possession is essential for a usufructuary mortgage. Thus, the mortgage deed in question is a simple mortgage.

3. Legality of the Concurrent Findings of the Appellate Authority:
The Appellate Authority's findings were based on the assumption that the appellant's mother was in possession of the property as a mortgagee, supported by the Revenue Inspector's report and the father's deposition. However, the appellant failed to produce documentary evidence such as revenue records to substantiate continuous possession as a mortgagee. The authorities erroneously relied on oral testimonies and ignored the fact that the appellant was a minor at the time of his mother's death, thus could not have taken possession. Therefore, the concurrent findings of the Appellate Authority were erroneous and suffered from legal errors.

4. Validity of the High Court's Judgment Regarding Possession and Deemed Tenancy under Section 4A of the K.L.R. Act:
The High Court correctly held that mere possession does not confer the right of tenancy under Section 4A of the K.L.R. Act. The mortgage deed did not grant possession of the land to the mortgagee, and the appellant failed to prove continuous possession as a mortgagee. The High Court's judgment in setting aside the orders of the Land Tribunal and the Appellate Authority was valid, as the findings of these authorities were based on incorrect appreciation of facts and legal evidence. The High Court's decision was within its revisional jurisdiction and legally sound.

Conclusion:
The appeal is dismissed, and the High Court's judgment is upheld. The appellant cannot claim to be a deemed tenant under the K.L.R. Act based on the void mortgage deed. The parties are free to litigate the ownership rights of the property in the appropriate court. No costs are awarded.