Mrs. Angammal vs Union of India

K. Raviraja Pandian, J.—The prayer in all these writ petitions is to declare Section 69 of the Transfer of Property Act, 1892 as unconstitutional and ultra vires on the premise that Section 69 of the Transfer of Property Act is very drastic in nature and places the bonafide mortgagors having real defence in a very disadvantageous and helpless position and gives wide power to the mortgagee. There is no restriction or remedy provided for abuse or misuse of the provision. The said provision is inconsistent with part III of the Constitution of India as it violates the fundamental and basic right of mortgagor to question the validity of improper and illegal sale of the mortgaged property. There is no safeguard or remedy provided in the Act against the misuse and abuse. There are no rules or procedure prescribed u/s 69 of the Transfer of Property Act and there is vested unchecked and unlimited power on the mortgagee against the principles of natural justice. The issue involved in these writ petitions is no more a res Integra. Exactly the very same grounds of attack now advanced have been considered by this Court as early as half a century before in the case of V. Narasimhachariar Vs. Egmore Benefit Society, 3rd Branch Ltd., and upheld the validity of Section 69 of the Transfer of Property Act. While rejecting the contentions, this Court has taken into consideration almost all the earlier judgments of this Court as well as the other High Courts, United States and other Courts and held thus:

".... The power of the mortgagee to sell under S. 69, T.P. Act, coming from England, got extended to this country because it is absolutely necessary for promoting quick credit. In restricting this right only to Presidency Towns the legislature acted upon a reasonable classification. The right was not deliberately extended to the mofussil where the procedure might lend itself to abuse. ''This power conferred on the mortgagees stands hedged in with various restrictions to prevent the abuse of the same. The aggrieved mortgagor can have recourse to courts both before the sale and after the sale. In certain respects his position is even better than that of a mortgagor in the mofussil. The power of sale is the subject-matter of a freely negotiated contract between the mortgagor and the mortgagee. ''The State only provides a particular procedure in the case of mortgagees in Presidency Towns and when the freely negotiated contract is not kept up what happens is the mortgagees who are citizens of the Union of India like the mortgagors, only come to enforce their rights under the contract entered into between them. Article 14 can obviously have no application. There is no discrimination looked at from any point of view between the persons similarly situated or circumstanced and there is no denial of equal protection and hence S.69 does not offend Art. 14 of the Constitution. W.P. 308 of 1953, Dt.24-4-1953 (Mad) Rel. on. ...

.... The power of the mortgagee to sell under S. 69, T.P. Act does not in any way interfere with the freedom of the mortgagor to acquire property or dispose of property or hold property. On the other hand, this is a case of the mortgagor under the freedom guaranteed under Art. 14, holding property and subject to a freely negotiated contract by him, acquiring funds thereon providing for the disposal of the property in the event of his not being able to discharge the mortgage in the manner agreed to by him."

The Division Bench of this Court by order dated 17.7.2006 made in Writ Appeal No.907 of 2006 has categorically stated that "as far as the challenge to the constitutional validity of Section 69 of the Transfer of Property Act is concerned, the validity of the said Section has been upheld by this Court in V. Narasimhachariar Vs. Egmore Benefit Society, 3rd Branch Ltd., The appellant is not the mortgagor and has no locus stand to file the present appeal especially when the stay petition filed by the mortgagor was already dismissed" and thus dismissed the writ appeal.

In Mardia Chemicals Ltd. Vs. Union of India (UOI) and Others Etc. Etc., , the Supreme Court approved the decision of this Court reported in V. Narasimhachariar Vs. Egmore Benefit Society, 3rd Branch Ltd., by observing as follows:

"51. However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages. We find such a scope having been recognized in the two decisions of the Madras High Court which have been relied upon heavily by the learned Attorney General as well appearing for the V. Narasimhachariar Vs. Egmore Benefit Society, 3rd Branch Ltd., AIR 141, 144, a judgment of the learned Single Judge where it is observed as follows in para 22: (AIR p. 143)

"22. The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the court before sale with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of which relief is sought: Adams v, Scott ((1859) 7 WR 213,249). I need not point out that this restraint on the exercise of the power of sale will be exercised by courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Ghose, Rashbehary: Law of Mortgages, Vol. II, 4th Edn., p. 784.)"

The other decision on which reliance has been placed is A. Batcha Saheb Vs. Nariman K. Irani and Another, more particularly on para 8."

Therefore, in the light of the law laid down by this Court as well as the Supreme Court upholding Section 69 of the Transfer of Property Act, the writ petitions have to be dismissed and accordingly the same are dismissed. However, there is no order as to costs.