D.A.DESAI - (1.) WHAT constitutes part performance within the meaning of the expression in S. 53-A of the Transfer of Property Act ('Act' for short) so as to clothe a mortgagee in possession with the title of ownership which would defeat the suit of die erstwhile mortgagor for redemption, is the question canvassed in these two appeals by common certificate.
(2.) FACTS first. Sardar Govindrao Mahadik original plaintiff I (now deceased prosecuting These appeals through his legal representatives) and Gyarsilal original plaintiff 2 (appellant 2) filed Civil Suit No. 14/51 in the Court of the District Judge, Indore, for redemption of a mortgage in respect of house No. 41 more particularly described in plaint paragraph 1, dated Feb. 22, 1951. A loan of Rs. 10,000.00 was secured by the mortgage. The mortgage was mortgage with possession. Plaintiff 1 was the mortgagor and the sole defendant Devi Sahai was the mortgages. Plaintiff 2 is a purchaser of the mortgaged Property from plaintiff I under a registered sale deed Ex. P-1, dated Oct 14, 1950. Plaintiff 1 will be referred to as mortgagor, defendant Devi Sahai as a. mortgagee and plaintiff 2 Gyarsilal as subsequent purchaser in this judgment. Even though the mortgage was mortgage with possession, it was not a usufructuory mortgage but an anomalous mortgage in that the mortgagor had agreed to pay interest at the rate of 12 Per Cent and the mortgagee was liable to account for the income of the property earned as rent and if the mortgagee himself occupied the same he was bound to account for the rent at the rate of Rs. 515.00 per annum. Mortgagor served notice dated Oct. S. 1945. calling upon The mortgagee to render true and full account of the mortgage transaction. The mortgagee failed to comply with the notice. Subsequently it appears that there were sonic negotiations between the mortgagor and the mortgagee which according to the mortgagee, culminated In a sale of the mortgaged property in favour of mortgagee for Rs. 50,000.00. Account of the mortgage transaction was made and the consideration of Rs. 50,000.00 for the sale of the house which would mean sale of equity of redemption was worked out as under: JUDGEMENT_237_1_1982Html1.htm Requisite stamps were purchased and the draft sale dead was drawn up on Oct. 10, 1950, but it was never registered. On Oct. 14, 1950, 1st plaintiff mortgagor sold the suit house by a registered sale deed to plaintiff 2 Gyarsilal for Rs. 50,000.00 with an agreement for resale. Thereafter the mortgages and the subsequent purchaser as plaintiffs 1 and 2 respectively filed a suit on Feb. 22, 1951 against mortgagee defendant Devi Sahai for taking accounts of the mortgage transaction and for a decree for redemption. The mortgagee Devi Sahi defended the suit on diverse grounds but the principal and the only defence canvassed was one under. S. 53-A of the Act, namely, that even though the sale deed purporting to sell equity of redemption having not been registered would not clothe the mortgagee with title of owner to the mortgaged property, yet he could defend his possession as transferee owner under the doctrine of part performance inasmuch as not only is the mortgagee is possession in part performance of the contract of sale but has continued in possession in part performance of the contract and has done several acts unequivocally referable or attributable to the contract and that the mortgagee as transferee has not only performed but is willing to perform his part of the contract and, therefore, the mortgagor is debarred from enforcing against the mortgagee any right in respect of the mortgaged property. As a necessary corollary, it was also contended that plaintiff 2 has acquired no right, title or interest in the mortgaged property under the alleged sale deed dated Oct. 14, 1950, in view of the fact that the transferor, viz., original mortgagor had no subsisting title to the property on the date of the sale which he could have transferred to the 2nd plaintiff. Arising from the pleadings of the parties, trial Court framed five issues. The trial Court held that plaintiff 1 executed a sale deed of the mortgaged property in favour of the defendant mortgagee but as the sale deed was not registered the transaction of ale is not complete. On the issue of protection of S. 53-A claimed by the defendant mortgagee, the trial Court held against him It was held that the mortgage being mortgage with possession, continued possession of the mortgagee after the date of the contract dated Oct. 10, 1950, would not be in part performance of the contract. The trial Court further held that no payment was made which could remotely be said to be in part performance of the contract. With regard to the payment of Rs. 1,000.00 for purchase of stamps and expenses of registration, it was held that the same was paid before the execution of the contract, and therefore, could not be said to be in furtherance of the contract. On these findings the trial Court held that S. 53-A of the Act was. not attracted and the mortgage was accordingly held to be subsisting and a preliminary decree for taking accounts was passed. A Commissioner was appointed for taking accounts.
(3.) DEFENDANT-mortgagee Devi Sahai preferred Civil First Appeal No. 14/66 to the Indore Bench of the Madhya Pradesh High Court. When this appeal was pending, appellant Motilal in cognate Civil Appeal No. 1145/69 applied under O. 22, R. 10, Code of Civil Procedure , for being joined as a party to the appeal claiming that under the sale certificate dated Mar. 25, 1953, issued by the Additional City Civil Judge First Class, Indore, he had purchased the equity of redemption in respect of the mortgaged property and that he has a subsisting interest in the property involved in the dispute and, therefore, he would contest the rights of the plaintiffs as well as of the mortgagee-defendant to claim any right, title or interest in the property. In his application Motilal alleged that he had filed Civil Suit No. 243/ 47 dated Nov. 3, 1947 for recovering a certain amount against the 1st plaintiff-mortgagor and had secured attachment before judgment of the mortgaged property on Nov. 6, 1947. His suit was decreed to the extent of Rs. 2,500.00 by the trial Court. He filed execution application No. 216/51 and in this proceeding the mortgaged property was sold subject to mortgage and he purchased the same for Rs. 300.00 The auctionsale was confirmed on Sept. 25, 1953. It may also be mentioned that the mortgagor-1st plaintiff had preferred appeal against the decree of the trial Court and the appellate Court by its judgment dated 27/03/1953, allowed the appeal and dismissed the suit of Motilal in entirety. Against the appellate decree Motilal filed Second Appeal No. 78/53 in the High Court and by its judgment dated Sept. 4, 1958, Motilal's claim to the tune of Re. 500/- against the 1st plaintiff-mortgagor along with proportionate interest and costs was decreed. The application of Motilal for being impleaded as a party was contested by the let and the 2nd plaintiffs as well as by the defendant-mortgagee. The High Court allowed the application of Motilal for being joined as party to the appeal and examined the contentions advanced on his behalf on merits. The only contention canvassed by the mortgagee in hip appeal in the High Court was that he is entitled to the protection conferred by S. 53-A of the Act. In order to attract S. 53-A it was urged that Rs. 1,000.00 advanced to mortgagor for purchase of stamps etc. was in furtherance of the contract. The only such act pleaded, was payment of Rs. 1,000.00 and no other act or circumstance was relied upon. The High Court was of the opinion that original mortgagee Devi Sahai was entitled to the benefit of the doctrine of part performance as against the 1st plaintiff-mortgagor Govindrao Mahadik and his subsequent transferee Gyarsilal because he was in possession and continued to be in possession and paid Rs. 1,000.00 in furtherance of the contract. While so holding the High Court imposed a, condition that, the mortgagee must pay or deposit in the Court an amount of Rs. 24,000.00 with interest at the rate of 4 Per Cent per annum from the date of delivery of possession to him as vendee till the date of payment. or deposit en the footing that that was the balance consideration promised but not paid by the mortgagee. The deposit was directed to be made in the trial Court within three months from the date of the judgment of the High Court for payment to the 2nd respondent which would enable the mortgagee to retain possession of the mortgaged property. The High Court gave a further direction that if the payment or deposit as directed in the judgment was not made, the appeal of the mortgagee would stand dismissed and if the amount directed in the judgment of the High Court was paid or deposited in the trial Court within the stipulated time the appeal of the mortgagee would stand allowed and in that event the suit of the mortgagor would stand dismissed. In respect of Motilal's claim the High Court directed that in either event he shall be entitled to recover the balance of his decretal amount and interest at the rate of 4 Per Cent per annum from the date of the auction sale till the date of realisation and to the extent of that amount there shall be a charge on the mortgaged property enforceable at the instance of. Motilal. In the circumstances of the case the High Court did not award costs to either side.;