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TMI Blog2024 (8) TMI 1393X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Order has to be set aside. In order to do justice, quashing of the First Impugned Order would necessarily mean that the effect of the Second Impugned Order would get nullified, for all practical purposes, despite this Court being of the view that on its own merits, the Second Impugned Order cannot be faulted. However, for such legal misadventure resulting in wastage of precious judicial time of the High Court, which could have been better spent answering the call of justice raised by the teeming millions, we impose costs of Rs.1,20,000/- on the appellant. Such cost shall be deposited within 6 weeks with the Registry of the High Court, to be utilised as follows: i. Rs.40,000 for juvenile welfare in a manner to be decided by the Juvenile Justice Monitoring Committee; ii. Rs.40,000 for welfare of the Advocate-Clerks in a manner to be decided by Hon ble the Acting Chief Justice, and; iii. Rs.40,000 for legal aid in a manner to be decided by the High Court Legal Services Committee. Appeal allowed. - HIMA KOHLI And AHSANUDDIN AMANULLAH , JJ. JUDGMENT AHSANUDDIN AMANULLAH, J. Heard Mr. Narendra Kumar, learned counsel for the appellant and Mr. V. Prabhakar, learned Senior counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under the four promissory notes. The respondent thereupon, in various panchayats, promised to repay the amounts. Ultimately, in the panchayat dated 24.06.2000, the respondent produced title document of his property as security towards debt under the four promissory notes, which has been noted in the Agreement dated 24.06.2000 (hereinafter referred to as the Agreement ). This Agreement, in essence, is the root of the instant lis. 7. The Agreement notes that the respondent owed a total amount of Rs.11,00,000/- (Rupees Eleven Lakhs) to the appellant and in settlement thereof, the respondent handed over the title deeds pertaining to the property situated at No.33, Avvai Thirunagar, Chennai - 600111, admeasuring 1300 square feet of land together with 700 square feet building (hereinafter referred to as the schedule property ), which was valued at Rs.9,00,000/- (Rupees Nine Lakhs). Per the Agreement, the respondent agreed to register the Sale Deed as and when demanded. Further, for re-paying the balance sum of Rs.2,00,000/- (Rupees Two Lakhs), it was agreed that the respondent will redeem the mortgaged property from the appellant and re-mortgage it elsewhere. 8. After the Agreement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Division Bench of the High Court gravely erred in holding that the plaint averments were not sufficient to conclude that there was a valid mortgage entitling him to sue for a mortgage decree. It was submitted that the plaint, read as a whole, alongwith the Agreement, the Proof Affidavits and evidence of PW-1/appellant and DW1/respondent clearly evince the fact that a loan was secured by the respondent by mortgaging the schedule property. The amount in the Agreement pertains to loan transactions for which the mortgage was created by the Respondent. It was submitted that in such circumstances, the findings in the First Impugned Order are highly erroneous. 12. It was submitted by learned counsel that the Single Judge has rightly arrived at the conclusion that the present case is one where the respondent agreed to create a mortgage by depositing the title deed. There was an actionable debt and the respondent had fully intended that the deed ought to be the security for the debt. The Single Judge had also noted that the respondent in his evidence as DW1, had agreed to deposit the title deed to create an equitable mortgage for the loan amount obtained by him from the appellant. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel contended that the appellant s advocate Mr. Sukumar, who was appearing for the appellant in the Court at Tiruvannamalai, called the appellant and informed him that a judgment showing the appellant s name was published in one of the law reports under the citation 2017 (3) MLJ 521 and it also showed that he went unrepresented therein. The appellant categorically submits that it was only then that the appellant came to know that the OSA arising from the suit had been decided against him ex-parte. Prayer was made to allow the appeals. SUBMISSIONS BY THE RESPONDENT-DEFENDANT: 17. Per contra, learned senior counsel for the respondent submitted that there is no merit in the present appeals and the impugned orders do not call for any interference by this Court under Article 136 of the Constitution of India (hereinafter referred to as the Constitution ). It was submitted that the Agreement does not refer to any mortgage having been created, since the recitals therein make it clear that the Agreement was to sell the schedule property to the appellant, and for the said purpose alone, the title deed of the property was handed over to the appellant. It was submitted that when the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property which was the subject-matter of the two mortgages dated 16.03.1995 and 17.04.1995. 20. It was further submitted that in the criminal case filed by the appellant against the respondent under Section 138 of the Negotiable Instruments Act, 1881, this Court dismissed Special Leave Petition (Criminal) No.994 of 2019 Order dated 28.08.2023 reads as below: Heard learned counsel for the petitioner. After having perused the evidence of the petitioner- complainant, we are satisfied that the acquittal of the respondent is a possible conclusion, which could have been recorded by the High Court. Though, something can be said about the manner in which the findings have been recorded by the High Court, we are recording our findings after having perused the evidence of the complainant. Hence, we concur with the ultimate order of the High Court and accordingly, the special leave petition stands dismissed. Pending application(s), if any, shall stand disposed of. , confirming the acquittal of the respondent. As regards the Second Impugned Order, it was submitted that the facts recorded therein speak for themselves and the appellant did not deserve any indulgence. Based on the above pleas, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal hearing of the appeal, as it did. However, what seems to have transpired is that in the absence of the appellant, what was averred by the respondent in the appeal was accepted as correct by the Division Bench. Fact remained that the respondent admitted to having executed Exhibit P-1 (the Agreement) and that the signature(s) thereon were his, in the Proof Affidavit dated 01.03.2010 as also cross14 examination dated 08.03.2010. No doubt, he (respondent) has denied its voluntary execution and contended that it was under coercion and threat, but no evidence was brought or led by him to support this plea. The Division Bench opined, correctly, that It is true that there was no supporting evidence adduced by him to show as to how he was threatened and forced to execute Ex.P1. Pausing here, we may emphasise that for every fact which is pleaded, there has to be evidence, either oral or documentary, to substantiate the same. A bald averment or mere statement by a defendant bereft of evidentiary material to back up such averment/statement takes such defendant s case nowhere. While deciding a statutory appeal under Section 116A of the Representation of the People Act, 1951 against an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney and mortgage-deed defined. (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any), by which the transfer is effected is called a mortgage-deed. (b) Simple mortgage. Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee. (c) Mortgage by conditional sale. Where the mortgagor ostensibly sells the mortgaged property on condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itle deeds; and (iii) an intention that the deeds shall be security for the debt. The existence of the first and third ingredients of the said requisites is not in dispute. The territorial restrictions contained in the said provision also does not stand as a bar in creating such a mortgage. The principal question, which, therefore, requires consideration is as to whether for satisfying the requirements of Section 58(f) of the Transfer of Property Act, it was necessary to deposit documents showing complete title or good title and whether all the documents of title to the property were required to be deposited. A fortiori the question which would arise for consideration is as to whether in all such cases, the property should have been acquired by reason of a registered document. xxx 38. In K.J. Nathan v . S.V. Maruty Reddy [AIR 1965 SC 430: (1964) 6 SCR 727] this Court held: (AIR pp. 435- 36, para 10) 10. The foregoing discussion may be summarised thus: Under the Transfer of Property Act a mortgage by deposit of title deeds is one of the forms of mortgages whereunder there is a transfer of interest in specific immovable property for the purpose of securing payment of money advanced o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of mortgage or a part thereof. ( emphasis supplied ) 28. In the interest of completeness, we may note that the Bench of 2 learned Judges in Syndicate Bank (supra) had referred to a larger Bench, the question as to whether a property could be equitably mortgaged by deposit of documents other than the title deeds or registered title document. However, the 3-Judges Bench in Syndicate Bank v Estate Officer and Manager (Recoveries), Andhra Pradesh Industrial Infrastructure Corporation Limited, (2021) 3 SCC 736 was of the opinion that the reference need not be answered in the peculiar facts and circumstances of the case since in our opinion the State of Andhra Pradesh and its successor viz. APIIC and Telangana Industrial Infrastructure Ltd., are estopped from challenging the validity of the mortgage. In State of Haryana v Narvir Singh, (2014) 1 SCC 105, this Court observed: 11. A mortgage inter alia means transfer of interest in the specific immovable property for the purpose of securing the money advanced by way of loan. Section 17(1)(c) of the Registration Act provides that a nontestamentary instrument which acknowledges the receipt or payment of any consideration on account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and no registered instrument is required under Section 59 as in other forms of mortgage. But if the parties choose to reduce the contract to writing, the implication is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage. As the deposit alone is not intended to create the charge and the document, which constitutes the bargain regarding the security, is also necessary and operates to create the charge in conjunction with the deposit, it requires registration under Section 17 of the Registration Act, 1908, as a nontestamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees and upwards. The time factor is not decisive. The document may be handed over to the creditor along with the title deeds and yet may not be registrable. 13. This Court while relying on the aforesaid judgment in United Bank of India Ltd. v . Lekharam Sonaram Co. [AIR 1965 SC 1591] reiterated as follows: (AIR p. 1593, para 7) 7. It is essential to bear in mind that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny right or liability. In the case in hand, the original deeds have just been deposited with the Bank. In the face of it, we are of the opinion that the charge of mortgage can be entered into revenue record in respect of mortgage by deposit of the title deeds and for that, an instrument of mortgage is not necessary. A mortgage by deposit of the title deeds further does not require registration. Hence, the question of payment of registration fee and stamp duty does not arise. xxx 14.5. By way of abundant caution and at the cost of repetition we may, however, observe that when the borrower and the creditor choose to reduce the contract into writing and if such a document is the sole evidence of the terms between them, the document shall form an integral part of the transaction and the same shall require registration under Section 17 of the Registration Act. ( emphasis supplied ) 29. We are of the opinion that the Single Judge has appreciated the law correctly as far as the Agreement is concerned to hold it to be a mortgage in view of Section 58(f) of the Act. We have read and re-read the Agreement. We have also minutely considered the exposition of law made in Narvir Singh (supra). W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order would necessarily mean that the effect of the Second Impugned Order would get nullified, for all practical purposes, despite this Court being of the view that on its own merits, the Second Impugned Order cannot be faulted. However, for such legal misadventure resulting in wastage of precious judicial time of the High Court, which could have been better spent answering the call of justice raised by the teeming millions, we impose costs of Rs.1,20,000/- (Rupees One Lakh Twenty Thousand) on the appellant. Such cost shall be deposited within 6 weeks with the Registry of the High Court, to be utilised as follows: i. Rs.40,000 for juvenile welfare in a manner to be decided by the Juvenile Justice Monitoring Committee; ii. Rs.40,000 for welfare of the Advocate-Clerks in a manner to be decided by Hon ble the Acting Chief Justice, and; iii. Rs.40,000 for legal aid in a manner to be decided by the High Court Legal Services Committee. Receipt of deposit be filed in the Registry of this Court soon thereafter. In case of non-compliance, the matter will be placed before us with appropriate Office Report. 33. Accordingly, both Impugned Orders stand set aside. The Judgment dated 01.04.2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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