IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD PRESENT HON'BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.1051 OF 1992 Between: P.Lakshmikantamma and others … Appellants And Regati Ramaraju. … Respondent This Court made the following: HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT No.1051 OF 1992 ORDER:- This appeal is filed by the 1st appellant/defendant against the judgment, dated 16.03.1992, in O.S.No.73 of 1984 passed by the I Additional Sub-ordinate Judge, Visakhapatnam, in decreeing the suit of the respondent/plaintiff. 2. The suit was filed for passing of a preliminary decree on the basis of a registered mortgage deed, dated 27.10.1971, whereunder the defendant is said to have borrowed a sum of Rs.20,000/- from one Regati Venkata Lakshminarayana Rao @ Narayana Rao and executed a simple mortgage with regard to the schedule house property agreeing to repay the same with interest at 12% per annum within three years. The original mortgagee executed a will conveying the schedule property to the plaintiff. The defendant did not make any payments during the life time of Lakshminarayana Rao or to the plaintiff and hence this suit. 3. Defendant filed a written statement admitting that a sum of Rs.20,000/- was borrowed by him from Lakshmi Narayanarao and that he also executed a simple mortgage deed. It was further pleaded that the plaintiff suppressed the fact that the defendant has purchased the property under registered sale deed, dated 27.10.1971, and a contemporaneous agreement of undertaking was executed by the plaintiff’s predecessor in title in favour of the defendant by way of warranty of title to the property. The above agreement was executed as an encumbrance certificate, which disclose some encumbrances on the house property. As per the agreement on the even date i.e., on 27.10.1971, it was undertaken by the vendor that the particulars of the encumbrances shown are not correct and in fact he has discharged the liabilities and in case, if any, further claim is made he will make good the loss of the defendant. Subsequently, one Smt.Dangeti Surya Kumari filed a suit O.S.No.166 of 1975 on the basis of two mortgage deeds over the suit schedule property purchased from Narayana Rao and obtained a decree and brought the properties to sale. The defendant has paid a sum of Rs.12,950/- towards the satisfaction of the debt and full satisfaction was recorded as on 14.03.1977. The defendant also paid a sum of Rs.6,500/- on 02.08.1965 to Boorla Venkata Jagadamba and also spent Rs.1,000/- towards legal expenses. Therefore, the entire mortgage amount was paid and in fact, an excess sum of Rs.550/- was also paid. The defendant is not aware of the Will relied on by the plaintiff. The suit is, therefore, not maintainable. 4. On the basis of the above pleadings, the following issues have been framed for trial:- 1. Whether Regati Narayana Rao, the predecessor in title of the suit property, executed a contemporaneous agreement of undertaking in favour of the defendant by way of warranty of title to the property sold to the defendant under a registered sale deed, dated 27.10.1971? 2. Whether the plaintiff is liable to reimburse the defendant a sum of Rs.550/- towards the counter claim? 3. Whether there is a valid and specific bequest of the suit debt in favour of the plaintiff under the Will, dated 27.10.1974? 4. Whether the Will, dated 27.10.1974, has been duly and validly executed and the same is binding on the defendant? 5. Whether the will, dated 27.10.1974, is genuine, valid and binding and enforceable? 6. Whether the suit is maintainable without a probate of succession certificate in favour of the plaintiff? 7. Whether the defendant is entitled to the benefits of Madras Act IV of 1938 and Act 7 of 1977? 8. To what relief? 5. On behalf of the plaintiff, P.Ws.1 to 3 were examined and Exs.A1 to A12 were marked. On behalf of the defendant, D.Ws.1 to 3 were examined and Exs.B1 to B8 were marked. Ex.X1 was also marked. 6. During the trial, learned counsel for the plaintiff agreed for the deduction of the amount paid by the defendant, which were due by the vendor of the plaintiff. For the balance amount the suit was decreed by the trial court. Aggrieved by the same, the present appeal is filed by the defendant. 7. The points that arise for consideration are: 1. Whether the appellant is not liable to pay any amount to the respondent and there is no liability to pay interest? 2. Whether the judgment and decree passed by the lower court is legal and sustainable? 3. To what relief? 8. Learned counsel for the appellant/defendant contends that she has purchased the property from her vendor believing the representations that there are no liabilities. But it was found that at the time of registration the encumbrance certificate showed certain liabilities and as such, the vendor has agreed to get the amounts, if any, payable to be adjusted from the mortgage debt and as such, the agreement Ex.B2 was entered into. The lower court has relied upon Ex.A1 Will and other evidence and accepted the truthfulness of it and held that the plaintiff is entitled for the mortgage debt. On this aspect, the defendant is a stranger and there is nobody disputing about the truthfulness of the Will and as such there can be no valid objection about the right of the plaintiff to institute the suit. 9. Before considering the contention of the learned counsel for the appellant, it has to be mentioned that the defendant specifically admitted in the written statement that under the mortgage transaction a consideration of Rs.20,000/- was received by her. Therefore, irrespective of the consideration under the sale deed, paid or payable by the defendant, the fact remains that the admission of the defendant clearly shows that the mortgage deed is supported by consideration. When once the money has been borrowed undertaking to pay the same with interest, the defendant cannot be heard to say that there is no liability to pay the interest. The strange argument has been developed by the learned counsel for the appellant that this money was not utilized and kept separately apprehending that in case of any future trouble it has to be paid to the Debtors of Narayana Rao. This argument is really unacceptable and no body would have borrowed the money and kept it idle for a future event. Therefore, the contention that there is no liability to pay interest cannot be accepted. The mortgage deed clearly contains an undertaking to pay the interest and apart from it having borrowed the money in 1974 for a period of 13 years the amount was not paid by the defendant nor he has given a notice about the non-liability for payment of the debts to the vendor. The interest runs from the date of the mortgage deed and subsequent payments can only be given credit. 10. In this case, the lower court has accepted all the contentions of the defendant about the payment of the money proved by the documents and also given credit of a sum of Rs.12,917/- paid towards the dereetal amount in O.S.No.166 of 1975 and also the payment of Rs.6,600/- under Ex.B8. In total a sum of Rs.13,850/- was given credit. In fact, the agreement Ex.B2 relied on by the defendant leaves no doubt about the fact that in case, if any, claim is there the amount has to be deducted from the mortgage debt. As per clause 3 of the agreement, it does not show that the liability of the defendant is exonerated by any such events. The contention of the learned counsel for the defendant that the plaintiff has not come to the court with clean hands and he is not entitled to interest, is forefeited. 11. The mortgaged property as on date is highly valuable, whereas the value of money payable to the mortgager is less and diminishing. There are absolutely no grounds to hold that the defendant is not bound by the mortgage deed in view of Ex.B2 as contended in the grounds of appeal before this Court. 12. In view of the reasons explained above, I find that the judgment and decree passed by the learned I Additional Sub-ordinate Judge, does not call for any interference in this appeal. 13. Accordingly, the Appeal Suit is dismissed with costs. _________________________ N.R.L.NAGESWARA RAO, J 10-12-2010 lmv