ivil Appeal No 1020 of 1975
Appeal by Special Leave from the Judgment and Order dated the 18 4 1975 of the Maharashtra State Co op
Appel late Court in Appeal No 54 of 1975 J L Nain U R Lalit and V N Ganpure for the appel lant
VM Tarkunde Sharad Manohar PH Parekh and Miss Manju Jetley for respondent No 1
MC Bhandare Mrs section Bhandare NS Narasimhan KC Sharma A K Mathur and 4
K Sharma for respondent No 2 343 The Judgment of the Court was delivered by RAY CJ
This appeal by special leave is from the judgment dated 18 April 1975 of the Maharashtra State Co operative Appellate Court
The question for consideration in this appeal is whether a mortgagor can exercise his right of redemption after a mortgagee under an English Mortgage with power to sell mortgaged property without the intervention of the court gives notice to the mortgagor to sell the mortgaged property by public auction and sells it by public auction
The appellant is the auction purchaser
The respondents are Flora Co operative Housing Society in liquidation the mortgagors hereinafter referred to as the Society and the Maharashtra Co operative Housing Finance Society Ltd the mortgagee hereinafter referred to as the mortgagee
In 1964 the Society was registered as a Housing Society with 12 members
The paid up capital of the Society was Rs21000 
The Society wanted 12 flats to be constructed in one structure of ground and two upper floors
The Society purchased plot No 153 in Santa Cruz at Bombay measuring 1002 sq yards
The price was Rs102000 
In 1966 the Society mortgaged the land and the incomplete structure in favour of the mortgagee
The mort gage was for the sum of Rs70000 
It was an English mortgage
In 1968 the mortgagee advanced a further sum of Rs42000 
In 1966 Fair Deal Builders entered into a contract with Society to build
The work was stopped
Thereafter in 1967 the Society entrusted the work to Maharaja Builders
In 1968 the contract with Maharaja Builders was terminated
The work was given in 1969 to Kamal Construction Company who abandoned it in incomplete stage
On diverse dates between 29 August 1967 and 29 November 1970 notice was given by the mortgagee to the Society for non payment to the mortgagor and to sell the property by public auction
On 9 March 1971 the Assistant Registrar of Co opera tive Societies Maharashtra appointed a Special Liquidator of the Society under section 102 of Maharashtra Co operative Societies Act 1960
The Assistant Registrar communicated the order of appointment liquidator to the mortgagee on 22 April 1971
The order of appointment of a liquidator was published in Maharashtra Government Gazette on 29 April 1971
The mortgagee advertised through Government auc tioner for public auction of the property
The public auction was held on 14 April 1971
The claim was for Rs12288822 paise
The appellant was declared the highest bidder for Rs131001 
The terms of sale inter alia were that 25 per cent was to be paid in advance and the balance in 30 days
The sum of Rs33000 was paid as 6 1546SCI76 344 25 per cent advance and the balance purchase price of Rs98001was paid to attorneys of the mortgagee
The auction purchaser took possession on 17 April 1971
On 13 August 1971 the Society filed a dispute before the Officer on Special Duty under the Maharashtra Co operative Societies Act against the auction purchaser and the mortga gee for injunction against completing sale
The Society obtained an ex parte injunction restraining transfer
On 29 September 1971 the interim injunction was vacated
Thereafter the Society filed an appeal against the said order before the Appellate Tribunal
In the meantime the appellant filed a writ petition in the Bombay High Court under Article 227 of the Constitution
On 16 June 1972 there was an interim order by the High Court in the writ petition
The Society undertook not to dispose of property until disposal of dispute
Both par ties were allowed to keep watchmen
The Society borrowed a sum of Rs131000 and paid the same to the mortgagee on 15 October 1972
On 16 January 1975 the Officer on Special Duty delivered judgment
He held that the dispute was maintain able under section 91 of the Maharashtra Co operative Socie ties Act
The Society was held not competent to challenge the auction sale held on 14 April 1971
It was also held that the validity of auction was not affected
The mortgagee was held entitled to exercise power of sale as a secured creditor without being affected by the winding up order against the Society
It was also held that the mortgagee did  not commit any breach of the statutory provisions of section 69 of the 
The sale was pot vitiated
It was found that there was no irregularity at the auction and there is no ground for setting aside the sale
The society was entitled to redeem the proper ty because the conveyance was not complete
The auction purchaser filed before the Maharashtra State Cooperative Appellate Court an appeal against the said order
In appeal the plaint was allowed to be amended and prayer for redemption was allowed to be introduced
On 18 April 1975 the Maharashtra State Cooperative Appellate Court dismissed the appeal and held that the dispute as initiated by the Society fell within the ambit of section 97 of the Maharashtra Cooperative Societies Act
The Appel late Court further held that there was no complete sale within the meaning of section 693 of the and the equity of redemption was therefore not lost
It was further held that the auction price was grossly inadequate
The auction sale was not a sale after a fair competition
The Mortgage Deed provided inter alia as follows  345 it is hereby agreed and declared that it shall be lawful for the mortgagees at any time without any further consent on the part of the mortgagors to sell the said mortgaged premises  
The aforesaid power shall be deemed to be a power to sell or concur in selling the said mortgaged premises in default of payment of the mortgage money without the intervention of the court within the meaning of section 69 of the 
 Clauses 7 8 and 33 in the Conditions of Sale may be referred to
Clause 7 provided as follows
Upon payment of the balance Of the purchase price the purchaser shall be enti tled to a conveyance from the vendors
The vendors shall in the conveyance of the property purchased by purchaser give the usual covenant required of a limited owner against encumbrances
The vendors shall give no other covenant required of an absolute of full owner
The vendors shall not be required to procure the consent of the mortgagors or of any other person in the conveyance
Clause 8 was as follows
After payment of the balance of the purchase money the purchaser shall be entitled to the rents and profits of the said property
The vendors as the mortgagees are not in possession of the property and will not do anything to deliver possession of the proper ty to the purchaser
The vendors as the mortgagees shall not be able to give vacant or symbolic possession of the property to the purchaser
On payment of the balance of the purchase price the purchaser shall at his own cost be at liberty to take such steps as the purchaser may deem neces sary for obtaining possession of the property from the mortgagors
Clause 33 provided as follows
If the mortgagors shall deposit all the amounts due to the vendors as mortga gees in court or pay the same to the vendors or their attor neys between the date of sale and the completion thereof and if as a result thereof the vendors have to reconvey the property to them or if the vendors cannot thus proceed with the sale and the sale is not completed on that account the vendors shall return the said deposit to the purchaser without any interest andor costs and the vendors as such mortgagees shall not be held liable for any damage
Counsel for the appellant advanced these contentions
First under section 69 of the a mortgagor confers on the mortgagee a power of sale through Court Or without intervention of court
The power of sale is of the entire legal estate of the mortgagor
Second when such a power is conferred it is agency coupled with interest under section 202 of the  the agency cannot be revoked without payment to mortgagee
Thirdif the power is acted upon revocation even on payment cannot nullify acts pursuant to powers
Reliance was placed on sections 203 and 204 of the 
Fourth if the act done pursuant to power is that the property is put up for sale and it is knocked down it is an act done by the mortgagee for mortgagor In 346 other words it is as if an act done by the mortgagor
The sale pursuant to the power is a subsequent act within the meaning and this subsequent act will extinguish the mortgagor s right of redemption
Fifth in a suit for specific performance by auction pur chaser the purchaser will be entitled to specific perform ance because it is a sale by mortgagor
Counsel for the appellant relied on two English deci sions
These are Waring Lord vs London and Manchester Assurance Co 1 and Property  Bloodstock Ltd vs Emer ton2 in support of the propositions that the mortgagor s right to redemption would be extinguished when the mortgagee exercised the power of sale and the third party entered into a binding contract to purchase the property
The English decisions are based on the provisions of the English Law of Property Act
The provisions create a statu tory power of sale which gives to a mortgagee power to sell the mortgaged property and it means that the mortgagee has power to sell out and out by private contract or by auction and subsequently to complete the conveyance
The English decisions are that if a mortgagee exercises power under section 1001i of the Law of Property Act 1925 to sell the mortgaged property by public auction or by private contract it is binding on the mortgagor before completion unless it is proved that he exercised it in bad faith
It was said in the Property  Bloodstock case supra that the contract for sale by the mortgagees to the pur chaser precludes the mortgagor from his right of redemp tion pending completion even if the property is sold subject to one or more conditions
The English decision naturally notices distinction between condition precedent and the terms of contracts of sale namely conditions dealing with matters of title for carrying out the contract
The mere fact that the label condition happens to be attached to conditions does not preclude its being in the latter catego ry of condition or matter of title
The condition that the sale is subject to the reversioner s licence being obtained where necessary is held in the English decision to be commonly regarded as no more than a term of the contract relating to title
The provisions in the relevant to the purpose of present appeal are sections 54 60 and 69
Under section 54 of the  sale is a transfer of ownership in exchange for a price paid or promised or part paid and partpromised
Such transfer in the case of tangible immovable property of the value of one hundred rupees and upwards or in the case of a rever sion or other intangible thing can be made only by a regis tered instrument
A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties
An English Mortgage is defined in section 58e of the 
Where the mortgagor binds himself to repay the mortgage money on a certain date and transfers the mortgaged pro 1 1935 Chancery 310
2 1968 LR Chancery 94
347 perty absolutely to the mortgagee but subject to a proviso that he will retransfer it to the mortgagor upon payment of the mortgagemoney as agreed the transaction is called an English mortgage
The Rights and Liabilities of Mortgagor are dealt with in section 60 of the 
It is that at any time after the principal money has become due the mortgagor has a right on payment or tender at a proper time and place of the mortgagemoney to require the mortgagee a to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee b where the mortgagee is in possession of the mortgaged property to deliver possession thereof to the mortgagor and c at the cost of the mortgagor either to re transfer the mortgaged property to him or to such third person as he may direct or to execute and to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished
There is a proviso that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court
The right conferred by section 60 of the Trans fer of Property Act is called a right to redeem
Therefore the said section 60 provides for a right of redemption provided that the right has not been extinguished by the act of parties
Section 69 of the deals with mortgagees  power of sale
Under the said section 691c a mortgagee has power of sale without the intervention of the Court where power is conferred by the mortgage deed and the mortgaged property or any part thereof was on the date of the execution of the mortgage deed situate within the towns of Calcutta Madras Bombay or in any other town or area which the State Government may by notification in the official Gazette specify
The principal question in this appeal is whether the right to redemption has been extinguished by any act of the parties
The English decisions are based on the provisions of the Law of Property Act 1925
In England sale is ef fected by the contract of sale and in India an agreement for sale is not a sale or transfer of interest
In England a mortgagee gets an equitable interest in the property
Under the English doctrine a contract of sale transfers an equitable estate to the purchaser
The Court does not assist the mortgagor by granting him a remedy unless there is collusion on the part of the mortgagee
In India there is no equity or right in property created in favour of the purchaser by the contract between the mortgagee and the proposed purchaser
In India there is no distinction between legal and equitable estates
The law of India knows nothing of that distinction between legal and equitable property in the sense in which it was under stood when equity was administered by the Court of Chan cery in England
Under the Indian law there can be but one owner that is the legal owner
See Rani Chhatra Kumari vs Mohan Bikram 1 1 1931 58 IA 279
348 A contract of sale does not of itself create any inter est in or charge on the property
This is expressly declared in section 54 of the 
See Rambaran Prasad vs Ram Mohit Hazra1  Ors
C The fidu ciary character of the personal obligation created by a contract for sale is recognised in section 3 of the and in section 91 of the Trusts Act
The personal obligation created by a contract of sale is de scribed in section 40 of the as an obligation arising out of contract and annexed to the owner ship of property but not amounting to an interest or easement therein
In India the word transfer is defined with reference to the word convey
The word transfer in English law in its narrower and more usual sense refers to the transfer of an estate in land
Section 205 of the Law of Property Act in England defines Conveyance includes a mortgage charge lease assent vesting declaration vesting instru ment
The word conveys in section 5 of the transfer of Property Act is used in the wider sense of conveying owner ship
The right of redemption which is embodied in section 60 of the is available to the Mortga gor unless it has been extinguished by the Act of parties
The combined effect of section 54 of the Transfer of Proper ty Act and section 17 of the Indian Registration Act is that a contract for sale in respect of immovable property of the value of more than one hundred rupees without registration cannot extinguish the equity of redemption
In India it is only on execution of the conveyance and registration of transfer of the mortgagor s interest by registered instru ment that the mortgagor s right of redemption will be extin guished
The conferment of power to sell without interven tion of the Court in a Mortgage Deed by itself will not deprive the mortgagor of his right to redemption
The extinction of the right of redemption has to be subsequent to the deed conferring such power
The right of redemption is not extinguished at the expiry of the period
The equity of redemption is not extinguished by mere contract for sale
The mortgagor s right to redeem will survive until there has been completion of sale by the mortagee by a registered deed
In England a sale of property takes place by agreement but it is not so in our country
The power to sell shall not be exercised unless and until notice in writing requir ing payment of the principal money has been served on the mortgagor
Further section 693 of the Transfer of Proper ty Act shows that when a sale has been made in professed exercise of such a power the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale
Therefore until the sale is complete by registration the mortgagor does not lose right of redemp tion
It is erroneous to suggest that the mortgagee is acting as the agent of the mortgagor in selling the property
The mortgagor exercises his right under a different claim
The mortgagee s right is different from 1  349 the mortgagor section The mortgagee exercises his right under a totally superior claim which is not under the mortgagor but against him
In other words the sale is against the mort gagor s wishes
Rights and interests of the mortgagor and the mortgagee in regard to sale are conflicting
In view of the fact that only on execution of convey ance ownership passes from one party to another it cannot be held that the mortgagor lost the right of redemption just because the property was put to auction
The mortgagor has a right to redeem unless the sale of the property was complete by registration in accordance with the provisions of the Registration Act
The decision in Abraham Ezra Issac Mansoor vs Abdul Latiff Usman1 is correct law that the right to redeem a mortgage given to a mortgagor under section 60 of the  is not extinguished by a contract of sale of the mortgaged property entered into by a mortga gee in exercise of the power of sale given to him under the mortgage deed
Until the
sale is completed by a registered instrument the mortgagor can redeem the mortgage on payment of the requisite amount
The Madras decision reported in Meenakshi Velu  Ors
vs Kasturi Sakunthala  Ors2 on which counsel for the appellant relied is contrary to the view expressed in Ellappa Naiker and others vs Sivasubramania Maniagaran3 and the aforesaid Bombay decision
We are entirely in agreement with the Bombay decision
The Madras decision Meenakshi Velu  Ors
vs Kasturi Sakun thala  Ors
2 which holds a contrary view on which coun sel for the appellant relied is wrong
For the foregoing reasons the appeal is dismissed with costs to respondent no 1
PHP Appeal dismissed
1ILR 2 11 R 1967 3 Madras 161
3 1936 71 Madras Iaw Journal 607


Summary:
In 1964 respondent No 1 Society was registered as a Housing Society
The Society wanted 12 plots to be con structed for its 12 members
The Society therefore pur chased a plot of land
In 1966 the Society mortgaged the land and the incomplete structure in favour of respondent No 2
In March 1971 the Special Liquidator of the Socie ty was appointed under section 102 of the Maharashtra Co operative Societies Act 1960
The mortgagee after demand ing the dues from the mortgagor advertised the public auc tion for the sale of the property
In the auction sale the appellant was declared as the highest bidder
The auction purchaser took the possession of the land and the incomplete structure
Society filed a dispute before the Officer on Special Duty under the Maharashtra Co operative Societies Act against the auction purchaser and the mortgagee praying for an injunction against the completion of the sale
The Society in the meanwhile paid the mortgage money to the mortgagee
The Officer on Special Duty delivered his judg ment in January 1975 and held that the Society was entitled to redeem the property because the conveyance was not com plete
The appellant filed an appeal before the Maharashtra State Co operative Appellate Court
In the appeal plaint was allowed to be amended and a prayer for redemption was allowed to be introduced
The appellate Court held that there was no complete sale within the meaning of section 693 of the and the equity of redemption was therefore not lost and that the auction price was grossly inadequate and that the sale was not after a fair competition
One of the conditions of auction sale was that if the mortgagor deposited the mortgage money in court between the date of the sale and completion thereof and if as a result thereof the mortgagee was to reconvey the property to the mortgagor the auction purchaser Would be entitled to the refund of the amount paid without any inter est andor cost
In an appeal by Special Leave the appellant contended 1 When under section 69 of the a mortgagor confers on the mortgagee a power of sale through court or without intervention of court the power of sale extends to the entire legal estate of the mortgagor
2 When such a power is conferred it is agency coupled with interest under section 202 of the 
If the power is acted upon revocation even on payment of mortgage money cannot nullify acts already done pursuant to the said powers
3 Knocking down at an auction sale by the mortgagee pursuant
to the power of sale extinguishes the mortgagor s right of redemption
4 In a suit for specific performance by auction pur chaser the purchaser will be entitled to specific perform ance because it is a sale by mortgagor
Dismissing the appeal 342 HELD 1 Under section 691c a mortgagee has power to sell without intervention of the court where power is con ferred by the mortgage deed and the mortgaged property or any part thereof was on the date of the execution of the mortgage deed situated in certain big towns
347D E 2 In India the word transfer is defined with refer ence to the word convey
The word transfer in English law in its narrower and more usual sense refers to the transfer of an estate in theland
Section 205 of the Law of Property Act in England defines conveyance as including mortgage charge lease assent vesting declara tion vesting instrument
The word conveys in section 5 of the and section 17 of the Indian Registration Act is that contract for sale in respect of immovable property of the value of more than Rs100 without registration cannot extinguish the equity of redemption
In India it is only on execution of the conveyance and regis tration of transfer of the mortgagor s interest by regis tered instrument that mortgagors right of redemption will be extinguished
The conferment of power to sell without intervention of the Court in a mortgage deed by itself will not derrive the mortgagor of his right to redemption
The extinction of the right of redemption has to be subsequent to the deed conferring such power
The right of redemp tion is not extinguished at the expiry of the period
The equity of redemption is not extinguished by mere contract for sale
348B D E Abraham Ezra Issac Mansoor vs Abdul Latif Usman ILR 1944 Bombay 549 approved
Meenakshi Velu  Ors
vs Kasturi Sakunthala  Ors
ILR  overruled
Ellappa Naiker and Ors
vs Sivasubramania Manisaran  approved
3 Under the English doctrine a contract of sale transfers an equitable estate to the purchaser
In India there is no equity or right in property accrued is favour of the purchaser by the contract between the mortgagee and the proposed purchaser
In India there is no distinction be tween legal and equitable estates
In India there can be but one owner ie legal owner
347G H Rani Chhotra Kumari vs Mohan Bikram 1931 58 IA 279 and Rambaran Prasad vs Ram Mohit Hazra  Ors
1967 I SCR 293 followed
4 Under section 1001i of the Law of Property Act 1925 if a mortgagee exercises power to sell the mortgaged proper ty by public auction or by private contract it is binding on the mortgagor before completion of the sale unless it is proved that the power was exercised in bad faith
The English decisions are based on the said provision of the English Law of Property Act and therefore they are not applicable to India
346 B D Waring Lord vs London and Manchester Assurance Co 1935 Chancery 310 and Property  Bloodstock Ltd vs Emer ton 1968 LR Chancery 94 distinguished