2006 (11) TMI 723 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the mortgage created by the petitioner.
2. Requirement of registration for the mortgage document.
3. Consideration for the mortgage agreement.
4. Jurisdiction of the High Court u/s 227 of the Constitution of India.

Summary:

1. Validity of the Mortgage Created by the Petitioner:
The petitioner filed a suit for permanent and mandatory injunctions seeking to restrain the respondent, Rajasthan State Industrial Development and Investment Corporation Limited, from dealing with the suit property. The petitioner claimed ownership of the property and contended that the mortgage was created by misrepresentation and without consideration. The court noted that the petitioner did not dispute his signatures on the mortgage documents but alleged that the contract was signed under misrepresentation.

2. Requirement of Registration for the Mortgage Document:
The appellate court held that the deposit of original title documents constituted a security for recovery of money and did not require registration u/s 59 of the Transfer of Property Act, 1882. The document dated 10.03.1997 was a memorandum of entry for the creation of an equitable mortgage and not a contract to create a mortgage, as the mortgage had already been created by the deposit of title deeds. Therefore, the document did not require registration.

3. Consideration for the Mortgage Agreement:
The petitioner argued that the mortgage was void for lack of consideration as it was created after the disbursement of the loan. The court referred to Section 127 of the Indian Contract Act, 1872, which states that anything done for the benefit of the principal debtor may be sufficient consideration for the surety. The court found that the mortgage was created as a result of forbearance to sue, which constituted valid consideration.

4. Jurisdiction of the High Court u/s 227 of the Constitution of India:
The court emphasized that its jurisdiction u/s 227 of the Constitution is limited to ensuring that an inferior court or tribunal functions within its authority and not to correct errors of law. The court noted that the petitioner had already had two rounds of litigation with adverse orders and that the matter in controversy related only to an interim order.

Conclusion:
The petition and the application were dismissed as being without merit. The court observed that the petitioner was trying to defeat the rights of the respondent Corporation conferred under the SFC Act, which was not permissible. The observations made were prima facie in nature and would not influence the decision in the main suit.