Sansar Singh vs Thootha and Others

S.M. Fazl Ali, J.—This is a second appeal by Col. Sansar Singh against the judgment of the Additional District Judge, Jammu, granting an

application of the applicant Respondent under the provisions of the Jammu and Kashmir Restitution of Mortgaged Properties Act.

The Respondent had filed an application before the Sub-Judge, Jammu, under the Restitution of Mortgaged Properties Act for restoration of

possession of 16 Kanals and 1 Marla of land comprising Khasra Nos. 2053 and 2054 situate in village Jandial, Tehsil Jammu. The case of the

applicant was that the said land was originally mortgaged for a sum of Rs. 300/- to Narsing Das and others who remained in possession of the

land. Subsequently the said mortgagees assigned their mortgagee right in favour of Col. Sansar Singh and he was, therefore, entitled to the

restoration of the property as the mortgagees had by remaining in possession for a long time enjoyed benefits equal to the amount of the mortgage

loan.

The suit was contested by the non-applicant who denied that there was any assignment to him by the previous mortgagees and he alleged that he

himself was a mortgagee for a sum of Rs. 300/- and that the mortgage being oral it was not covered by the Restitution of Mortgaged Properties

Act.

The learned Sub-Judge accepted the plea of the Appellant and dismissed the application of the Respondent.

On appeal, however, the learned Additional District Judge has held that the provisions of the Restitution of Mortgaged Properties Act applied to

the present case and on this finding he has granted a decree for restoration of possession on payment of Rs. 150/- to the Appellant.

5a. We have gone through the record and perused the judgments of the Courts below.

6.In our opinion the only point for consideration in this case is as to whether the provisions of the Restitution of Mortgaged Properties Act can

apply to an oral mortgage. Mr. Suraj Prakash appearing for the Appellant has contended that the Act has not made any departure with respect to

the nature and legal character of a mortgage from the one stipulated under the Transfer of Property Act. He has submitted that the Act has only

substituted a new procedure for redemption or restitution of mortgaged properties. I have carefully considered the contention raised by the learned

Counsel and for the reasons that I will give hereafter this contention must prevail.

To begin with, the object of the Act is to provide for a summary procedure for the restitution of certain mortgaged properties. It is clear from the

preamble of the Act which runs as under:

Whereas in order to grant relief to the poor and destitute debtors it is expedient to provide for a summary procedure for restitution of certain

mortgaged properties in the Jammu and Kashmir State in the manner hereinafter appearing;

Now, therefore, in exercise of the powers reserved u/s 5 of the Jammu and Kashmir Constitution Act, 1996 read with the proclamation issued by

His Highness and published in the Government Gazette dated 7th Har, 2006 Yuvaraj Shree Karan Singh Ji Bahadur is pleased to enact as follows

that the Act has made changes only in the procedure for redeeming mortgaged properties and has made, no fundamental change in the legal

character or nature of a mortgage.

u/s 2, Clause (vii) of the Act the expressions ""Mortgagee"" and ""Mortgagor"" shall have the same meanings as are assigned to them under the

Jammu and Kashmir Transfer of Property Act, 1977. Clause (viii) of Section 2 provides that the words and expressions used in this Act but not

defined shall have the same meanings which are assigned to them under the Transfer of Property Act. From these provisions it is absolutely clear

that the intention of the Legislature is to put this Act pari passu the Transfer of Property Act so far as the legal character of a mortgage is

concerned.

It has been contended by counsel appearing for the Appellant that u/s 59 of the Transfer of Property Act a mortgage could be effected only by

a registered instrument signed by the mortgagor and attested by two witnesses. Section 59 of the Transfer of Property Act runs as follows:

A mortgage can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.

x x x x

It may be noticed here that the provisions of Section 59 of the State Transfer of Property Act are practically the same as those of the Transfer of

Property Act applicable to India with this difference that whereas under the latter Act registration is so necessary where the valuation of the subject

matter is Rs. 100/ - or more under the State Act every mortgage, irrespective of valuation, must be registered and signed by the mortgagor.

It is well settled that if a law requires a transaction to be entered in a particular mode, the transaction can be effective only if the mode

prescribed has been adhered to. Thus if a mortgage is neither registered nor signed by the mortgagor nor duly attested as required by Section 59

the mortgage will not be a mortgage in the eye of law, at all,and will not be enforceable. In cases where the mortgage has been executed without

the provisions of Section 59 having been complied with, the mortgage cannot be validated even by the admission of the mortgagee because in such

cases the principle once a mortgage always a mortgage cannot apply. In this connection. I might refer to the decision of the Privy Council in the

case AIR 1941 90 (Privy Council) where their. Lordships of the Privy Council held that the mortgage security being unregistered was invalid for all

purposes and not merely as between the Plaintiff and the subsequent, mortgagee. To the same effect is the decision of the Patna High Court

reported in Bishun Singh and Others Vs. Sheodhari Das and Others, where his Lordship Mr. Justice Agarwala made the following observations:

The suit is in effect one to redeem the oral mortgage. It is necessary, therefore, for the Plaintiffs to establish that they are mortgagors and that they

are entitled to redeem. The only proof that the Plaintiffs are mortgagors is the Defendants' admission and an entry in the record of rights that the

Defendants were in possession as mortgagee. As to the entry in the record of rights, that is merely an entry of what the survey authorities regarded

as the legal status of the Defendants. If the facts show that they do not possess that legal status,the entry in the record of rights will not confer it. So

far as the admission relied upon by the Plaintiffs is concerned, it amounts only to this that the Defendants were put in possession as mortgagees

under an oral mortgage for a consideration of Rs. 600/ -. If an admission is sufficient to create a mortgage, then this admission must have that

result. But since the decision of the Privy Council in Ariff's case that the requirements of a statute cannot be got over by application of the doctrine

of part performance, it is idle to contend that the requirements of Section 59, T.P. Act, can be evaded in this way. Section 59 declares that a

mortgage for a consideration of Rs. 100/- or more must be by a registered instrument. Admittedly in this case, there was no instrument either

registered or otherwise. There could, therefore, be no mortgage and the Defendants' admission is insufficient to create what the statute prevents.

The observations of Mr. Justice Agarwala are amply supported by a Division Bench decision of the Patna High Court reported in Sheikh Bhukhan

Mian Vs. Srimati Radhika Kumari Debi and Another, . There is also a Single Judge decision of this Court reported in Thaker Ganpat v. Sukhram

AIR 1955 J&K 20 where Mr. Justice Kilam has observed as follows:

There can be no denial to the Fact that according to the provisions of the Transfer of Property Act a mortgage which has not been effected by a

registered document is not enforceable at law, and as such the Defendant cannot retain as of right the possession of the suit land on the basis of a

transaction which is euphemistically styled by the parties as an oral mortgage

It is, therefore, clear from the authorities mentioned above that a mortgage which does not comply with the conditions laid down in Section 59,

T.P. Act, is not a mortgage in law and can not be enforced. The question for our consideration, however, is whether such a mortgage can be

enforced under the Restitution of Mortgaged Properties Act. In my opinion as the intention of the Legislature in passing this Act (Restitution of

Mortgaged Properties Act) was merely to make a change in procedure of restitution of mortgaged properties and since all the definitions and

indicia of the Transfer of Property Act have been retained in this Act, it cannot be meant to apply to mortgages which are invalid or which are not

enforceable under the Transfer of Property Act.

The learned Counsel appearing for the Respondent submitted that the Act merely retains the definition of the mortgage as mentioned in Section

58, T.P. Act and does not adopt the mode in which the mortgage is to be effected. I am not in a position to accept this contention because the Act

is really a procedural Act and if there was no intention to override the provisions of an effective mortgage as contained in Section 59, T.P. Act, the

Act must have said so specifically. The Act being a special Act cannot be deemed to override the provisions of the general Act unless there is a

specific provision in it to that effect. On the other hand, on examining the various provisions of the Restitution of Mortgaged Properties Act we find

that it adopts all the characteristics. of a mortgage as mentioned in the Transfer of Property Act. Another significant factor which lends support to

my view are the provisions of Sections 5 and 10 of the Restitution of Mortgaged Properties Act quoted below:

5(1) The provisions of this Act shall apply to all suits for redemption or foreclosure in respect of the mortgages specified in Section 2 and such suits

shall be triable as petitions u/s 4 of this Act.

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If the Court finds that any sum is due to the mortgagee u/s 9, it shall require the mortgagor to deposit the amount in such manner as shall be

prescribed and on deposit of the amount it shall declare the rights of mortgagee extinguished and require the mortgagee to deliver the possession of

the mortgaged property to the mortgagor together with all documents of title relating to the mortgaged property.

From the provisions of Section 5 it is quite clear that these provisions shall apply to all suits for redemption. It is, therefore, clear that that section is

meant to apply to those cases which are covered by the provisions of the Transfer of Property Act. Under the Transfer of Property Act there can

be no question of redemption of the mortgage which has not been executed in the manner provided by Section 59. Similarly, the words ""and

require the mortgagee to deliver the possession of the mortgaged property to the mortgagor together with all documents of title relating to the

mortgaged property"" clearly indicate that this Act contemplates only such mortgages which are created by the documents of title. In other words,

Section 10 would become nugatory if we accept the contention of the Respondent that the Act applies also to oral mortgages.

The Advocate for the Respondent drew our attention to Clause (1)(b) of Section 9 of the Restitution of Mortgaged Properties Act which runs

as follows:

(b) Where the mortgagee is still in possession that the mortgagor be put into possession of the mortgaged property as against the mortgagee and

that the title deeds, if any, be restored to the mortgagor.

The learned Counsel laid stress on the words ""title deed, if any"" and argued that these words indicate that the mortgage may even be oral in which

there will be no title deed. In my opinion the argument is not sound. The words 'if any' have been used in order to include cases where title deed

may not be available or may have been lost for some reason or the other.

On a complete analysis of the various provisions of the Restitution of Mortgaged Properties Act we have come to the conclusion that this Act

does not apply to oral mortgages or mortgages that have not been executed in accordance with the procedure prescribed in Section 59, T.P. Act.

In this view of the matter, the view taken by the learned Additional District Judge is legally erroneous and must be overruled.

Counsel for the Respondent tried his best to base his case on the question of assignment on which both the courts below have recorded a

finding against the Respondent and that finding being a finding of fact cannot be reopened now in second appeal.

As, however, in this case it appears that the Appellant has admitted the mortgage and has not disputed title of the non-applicant the

Respondent may file a suit for possession on the basis of title, if so advised.

18 For the reasons given above we allow this appeal, set aside the judgment of the Additional District Judge and restore that of the Sub-Judge,

Jammu. There will be no order as to costs.

J.N. Wazir, C.J.

I agree.