Dwarka Prasad borrowed Rs. 1,700 from Madho Ram, father of the defendants, and executed a possessory mortgage deed of a house.
The mortgage terms included paying interest and adjusting rent towards it, with a provision for redemption within twenty years.
Dwarka Prasad failed to pay, so possession was given to Madho Ram who rented out the house.
Eventually, Dwarka Prasad and Mst. Kunta, his maternal grandmother (the other mortgagor), passed away.
Mst. Radha Bai, Dwarka Prasad’s heir, sold the house to the plaintiff.
Plaintiff sought redemption of the mortgage, but defendants claimed the original deed was a sale, not a mortgage.
Trial court deemed it a mortgage, allowing redemption by the plaintiff for Rs. 1,709/14/.
Defendants appealed, and the District Judge dismissed the suit.
Upon further appeal, the High Court remanded the case to the lower appellate court to determine if the defendant’s acquired ownership through adverse possession and the admissibility of certain documents.
Lower appellate court reaffirmed it was a mortgage and defendants hadn’t acquired ownership through adverse possession.
High Court allowed plaintiff’s appeal, reinstating the trial court’s judgment and directing defendants to render accounts before claiming payment during redemption.
Present SLP is filed against judgment of HC:
ISSUE:
Whether the deed (i.e., Ex.4) executed between Dwarka Prasad and Madho Ram was a mortgage or a sale.
RULE:
The Registration Act stipulates that unregistered documents affecting immovable property are inadmissible as evidence of any transaction involving such property.
HELD:
By the enactment of Act 21 of 1929, amending s.49 of the Act, the documents of which registration is necessary under the Transfer of Property Act but not under the Registration Act fall within the scope of Section 49 of the Registration Act and if not registered are not admissible as evidence of any transaction affecting any immovable property comprised therein, and do not affect any such immovable property.
Ex. A-26, a subsequent unregistered deed, cannot be considered as evidence to interpret Ex. 4.
Ex. 4 clearly outlines terms typical of a mortgage, including repayment of principal and interest, possession by the mortgagee, and redemption provisions.
The High Court’s direction to the defendants to render accounts before claiming payment during redemption was overturned and the rest of the High Court’s decision, reinstating the trial court’s judgment, was affirmed with this modification.