1996 (5) TMI 434 - HC - Indian Laws

Summary

Issues Involved:
1. Redemption of anomalous mortgage
2. Cancellation of decree in OS No. 49/78
3. Permanent injunction in OS No. 5/89
4. Specific performance in OS No. 11/84
5. Allegations of fraud, misrepresentation, and undue influence
6. Admissibility of oral evidence to contradict written documents
7. Necessary parties in a mortgage suit
8. Jurisdiction and court fees
9. Doctrine of Damdupt and interest calculation
10. Relief for excess amount after mortgage redemption

Detailed Analysis:

1. Redemption of Anomalous Mortgage:
The court examined whether the sale deed Ex.B-3, agreement to sell Ex.B-1, and sale deed Ex.B-2 were genuine sale transactions or nominal documents intended as mortgage deeds. The court concluded that the documents were indeed anomalous mortgage deeds. The plaintiffs were entitled to redeem the mortgage upon fulfilling the terms, including paying the mortgage amount with interest at an agreed rate.

2. Cancellation of Decree in OS No. 49/78:
The plaintiffs alleged that the decree in OS No. 49/78 was obtained by fraud and misrepresentation. The court found that the 1st plaintiff and her husband were misled into signing blank papers, which were later used to obtain a decree for permanent injunction. The court set aside the decree, finding it was obtained by trickery and misrepresentation.

3. Permanent Injunction in OS No. 5/89:
The 2nd defendant's suit for permanent injunction against the plaintiffs was dismissed. The court found no evidence to support the claim that the plaintiffs had interfered with the defendant's possession or broken a common wall.

4. Specific Performance in OS No. 11/84:
The 3rd defendant's suit for specific performance of the contract Ex.B-1 was dismissed. The court found that the agreement to sell Ex.B-1 was not a genuine transaction but a document created to secure the loan amount.

5. Allegations of Fraud, Misrepresentation, and Undue Influence:
The court considered the allegations of fraud, misrepresentation, and undue influence. It found that the defendants had used their dominant position to obtain agreements and sale deeds from the plaintiffs. The court drew adverse inferences against the defendants for withholding material witnesses and documents.

6. Admissibility of Oral Evidence to Contradict Written Documents:
The court held that oral evidence could be admitted to show that the documents, though executed as sale deeds, were intended to operate as mortgage deeds. The court relied on precedents that allowed oral evidence to prove the real nature of the transaction.

7. Necessary Parties in a Mortgage Suit:
The court addressed the issue of necessary parties in a mortgage suit. It held that non-joinder of all mortgagors does not defeat the suit if an effective decree can be passed and the rights of the absent parties can be safeguarded. The court found that the plaintiffs had the right to file the suit for redemption of the mortgage.

8. Jurisdiction and Court Fees:
The court found that the suit was correctly valued for jurisdiction purposes and the court fees were appropriately paid. The court rejected the defendants' contention that the suit should have been filed in a lower court based on the valuation for court fees alone.

9. Doctrine of Damdupt and Interest Calculation:
The court applied the doctrine of Damdupt, which limits the interest amount to not exceed the principal amount. The plaintiffs had agreed to pay an interest amount that exceeded the principal, but the court held that the interest should not be restricted to the principal amount.

10. Relief for Excess Amount After Mortgage Redemption:
The court held that the plaintiffs were not entitled to claim any excess amount found after adjusting the loan amount and interest from the usufruct of the mortgaged property. However, the court allowed for the equities to be worked out due to the stay in appeal.

Conclusion:
The appeals AS 2702/89 and AS 2703/89 were dismissed, and the decree of dismissal of the suit No. OS 11/84 was maintained. The court modified the decree for redemption of the mortgaged property (Amba Bhavan), allowing the plaintiffs to redeem the mortgage by paying the mortgage amount with interest. The court ordered an assessment of the net income of Amba Bhavan from the date of mortgage until the date of the decree and directed the appellants to deliver vacant possession upon payment of the amount found due. The court maintained that the 2nd appellant was the owner of the suit land in OS No. 5/89 but dismissed the suit. Each party was ordered to bear their own costs of the appeals.