IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE :19.10.2010 CORAM THE HONOURABLE MR. JUSTICE M. VENUGOPAL A.S.No.105 of 1995 1.S.Sulochana (Died) 2.P.Mohan 3.P.Babu (Appellants 2 and 3 are brought on record as LRs of the deceased First Appellant as per order of Deputy Registrar in CMP No.17825 of 95, dated 21.12.1995) ... Appellants/LRs of the deceased 1st Defendant Vs 1.G.Abdul Kareem 2.Ameena Bi 3.Pappathi 4.Kannika (Respondents 3 and 4 brought on record as LRs of the deceased First Appellant vide order of Court dated 08.04.2008 made in CMP Nos.13212 to 13214 of 2004) ... Respondents/Plaintiffs 1 & 2 PRAYER: Appeal is filed under Section 96 of C.P.C as against the Judgement and Decree dated 31.10.1990 made in O.S.No.8539 of 1985 on the file of Learned II Assistant Judge, City Civil Court, Chennai. For Appellants : Mr.S.Udayakumar For Defendants : Mr.s.B.Fazluddin for R1 and R2 No appearance for R3 and R4. JUDGMENT The First Appellant/First Defendant during her life time has preferred the present Appeal before this Court as against the https://hcservices.ecourts.gov.in/hcservices/ Judgment and Decree dated 31.10.1990 in O.S.No.8539 of 1985 on the file of the Learned II Assistant Judge, City Civil Court, Chennai. 2.During the pendency of the Appeal, since the First Appellant/First Defendant died, her Legal Representatives, the second and third Appellants have been brought on record. 3.The trial Court viz., the Learned II Assistant Judge, City Civil Court, Chennai, on an appreciation of oral and documentary evidence on record, while passing the Judgement in the main suit filed by the Respondents/Plaintiffs has among other things observed that 'the First Appellant/First Defendant has not utilised her right of redeeming the suit property though she possessed the same and since the suit mortgage amount has not been paid she is not entitled to redeem the Mortgage property from the date of Auction sale of the suit property bided by the Plaintiffs and further, the trial Court has come to the conclusion that the Respondents/Plaintiffs have absolute right in the suit property and also that the damages claimed by the Respondents/ Plaintiffs in the suit are correct and resultantly, decreed the suit with costs and further directed the Defendants 1 to 4 to hand over the vacant possession of the suit property within four months from the date of their vacating. 4.Before the trial Court, 6 Issues have been framed for adjudication in the main case. On the side of the Respondents/ Plaintiffs witness PW1 has been examined and Ex.A.1 to Ex.A.15 have been marked. On the side of the Defendants, DW1 (First Appellant/ First Defendant since deceased) has been examined and Ex.B.1 and Ex.B.2 have been marked. 5.The point that arise for consideration in this Appeal are: 1.Whether the First Appellant/First Defendant (since deceased) has resided in the suit property in her own right? 2.Whether the Respondents/Plaintiffs have acquired right in the suit property by means of their purchase in Auction sale? 3.Whether the Respondents/Plaintiffs are entitled to claim a sum of Rs.2,000/-, Rs.1,500/-, Rs.2,500/- and Rs.2,000/- as damages from the Defendants 1 to 4 for the use and occupation of the respective portion of the suit premises for the period between 16.11.1984 and 15.09.1985? 4.Whether the Respondents/Plaintiffs are entitled to claim damages at Rs.200/-, Rs.150/-, Rs.250/- and Rs.200/- per month from the defendants 1 to 4 from 16.09.1985 onwards?. https://hcservices.ecourts.gov.in/hcservices/ 6. The contentions, discussions and findings on Point Nos.1 and 2: According to the Learned Counsel for the Appellants, the trial Court has committed an error in decreeing the suit because the fact that the Respondents/Plaintiffs have not established prima facie case in respect of their rights in regard to the suit property and as a matter of fact, the suit ought to have been dismissed by the trial Court for non-joinder of parties. 7.The Learned Counsel for the Appellants urges before this Court that the trial Court has not adverted to the aspects of compliance of Section 69 of the Transfer of Property Act, 1882 by Pushpavathi Ammal before bringing the property to sale and in fact issuance of notice to the Legal Heirs of Rajammal is mandatory and moreover, other Legal Heirs have not been arrayed as Parties to the suit. 8.The Learned Counsel for the Appellants submits that the Mortgagee has not disclosed the details in regard to the disbursement of the sale price and further, it has committed an error in determining the damages without any basis and added further, the trial Court has not given any findings in respect of the conduct of the sale and the execution of Sale Deed in a suspicious circumstances and in a hurried manner. 9.In short, it is the contention of the Learned Counsel for the Appellants that the trial Court has not taken into account all the material aspects of the matter in a proper and real perspective and this has resulted in miscarriage of justice and therefore prays for allowing the Appeal in the interest of Justice. 10.Per contra, it is the contention of the Learned Counsel for the Respondents that the trial Court has taken note of all the facts and circumstances in a cumulative fashion and on an appreciation of oral and documentary evidence available on record has resultantly decreed the suit with costs and directed the Defendants to hand over the vacant possession of the suit property within four months from the date of Judgment and the same need not be interfered with by this Court sitting in Appeal. 11.It is the evidence of PW1 (First Respondent/First Plaintiff) that he has purchased the suit property in Auction and Ex.A.1 is the Auction Notice and Ex.A.2 Sale Deed, dated 01.05.1964, is the prior Title Deed and Ex.A.3 and Ex.A.4 are the Mortgage Deeds, dated 16.09.1972 and 29.10.1974 in favour of Pushpavathi Ammal and since the money has not been repaid the property has been brought in an Auction sale and that he has taken the property in Auction and that he has paid 1/4th Auction amount and later paid the balance Auction amount and Ex.A.5 is the Sale Deed, dated 16.05.1974, executed by Pushpavathi Ammal in favour of the Respondents/ Plaintiffs and he has https://hcservices.ecourts.gov.in/hcservices/ issued notice requiring the defendants to vacate and Ex.A.6 to Ex.A.10 are the Notice copies and the acknowledgment and the First Defendant is the daughter of Rajammal and the Defendants 1 and 3 are the Tenants and for Rx.A.6 Plaintiffs Lawyer's notice, dated 07.10.1985, the First Defendant has issued a reply Lawyer's Notice Ex.A.14, dated 15.10.1985 and that the Defendants are not vacated from the suit property and they are paying the rent to the First Defendant and that the First Appellant/First Defendant (Since deceased) has not vacated and therefore, the suit has been filed for vacating the Defendants from the suit property and also by directing them to hand over the vacant possession. 12.It is the evidence of PW1 that Rajammal expired and he does not know that Rajammal has two daughters and in Ex.A.1 Auction Notice Rajammal and First Appellant/First Defendant names are found and he does not know that Rajammal has another daughter by name Nagarathinammal and further, he does not know whether Auction notice has been given to the said Nagarathinammal and that he does not know Pushpavathi Ammal and that he is not in a possession of the copy of the notice issued to the First Defendant and that he has paid the Auction amount of Rs.75,000/- and that registration has taken place after 8 months later and the signature in Ex.A.1 notice is his signature and after receipt of Ex.B.2 First Defendants' Lawyer's Reply notice he has paid the balance amount and it is incorrect to state that he has joined with Pushpavathi Ammal and has taken the suit property in Auction. 13.It is the evidence of DW1 (First Appellant/First Defendant since deceased) that the suit property belongs to Rajammal and she does not know her mother as Mortgagee of property to Pushpavathi Ammal and that Pushpavathi Ammal has not issued any notice and she does not know that the Plaintiffs have brought the suit property in Auction on 08.03.1984 and she has not received any notice calling upon her to Pushpavathi Ammal to hand over the vacant possession and that she has issued Ex.B.1. She has issued notice to the Plaintiffs and Pushpavathi Ammal and no reply has been received and as on date, the value of the suit property is Rs.3,00,000/-. 14.It is the further evidence of DW1 that she is not paying the rent and the Defendants 2 and 3 are residing in the suit property and she is receiving the rent from them and the third Defendant/Lorry Service has paid Rs.150/- as rent and the fourth defendant has paid a rent of Rs.50/- and even after the property has been brought in Auction sale she has been receiving the rent and she has not handed over the vacant possession of the suit property. 15.In the Plaint, the Respondents/Plaintiffs have averred that the suit property belonged to Rajammal, Wife of the deceased Madalamuthu, the deceased mother of the First Appellant/First Defendant (since deceased) and that the said Rajammal purchased the https://hcservices.ecourts.gov.in/hcservices/ Plaint schedule property by means of Ex.A.2 Sale Deed, dated 01.05.1964 and she raised loans of Rs.10,000/- each on two occasions from Pushpavathi Ammal on 16.09.1972 and 29.10.1974 and for the due repayment of the said debts, executed two Mortgage Deeds dated 16.09.1972 and 29.10.1974 each for Rs.10,000/- in favour of Pushpavathi Ammal by offering the schedule mentioned property as security for the due repayment of the debts and Rajammal has given powers of sale to Pushpavathi Ammal in respect of schedule mentioned property for the recovery of money due of the two Mortgages if she commiited default in the payment of the amount due in the said mortgages. 16.It is the case of the Respondents/Plaintiffs that Rajammal expired without wiping out the mortgages and the First Appellant/First Defendant (Since deceased) is the only Heir of Rajammal and she failed to discharge the said mortgage debts during her life time and since the First Appellant/First Defendant (since deceased) failed to discharge the mortgage amount credited by her mother Rajammal, the suit property has been brought for sale by Pushpavathi Ammal. 17.As per Section 69 of the Transfer of Property Act after due notice and in the public Auction held on 08.03.1984 conducted by M/s.Murray and Co., the Respondents/Plaintiffs have been the successful bidder and the highest bid for Rs.75,000/- has been accepted by the Auctioneers and the Respondents/Plaintiffs paid a sum of Rs.18,750/- to the Auctioneers on the date of action as per sale rules and they paid the remaining amount of Rs.56,250/- on 22.03.1984. 18.According to the Learned Counsel for the Respondents/ Plaintiffs, since the First Appellant/First Defendant (during her life time) has failed to execute the Sale Deed, the Mortgagee Pushpavathi Ammal executed the Sale Deed in respect of the suit property in favour of the Respondents/Plaintiffs as per Sale Deed dated 16.11.1984, but the Mortgagee/Vendor has not delivered the possession of the suit property. 19.It is the contention of the Learned Counsel for the Respondents/ Plaintiffs that since the Respondents/Plaintiffs have become the absolute owners of the suit property by means of purchase in the Auction sale, they have filed the present suit for recovery of the vacant possession of the suit property and the second and third Defendants are the Tenants/First Appellant/First Defendant (since deceased) they have been shown as parties. 20.The First Appellant/First Deceased in the Written Statement filed before the trial Court has taken a specific plea that Rajammal's elder daughter Nagarathinammal, who is also a Heir, is a proper and necessary party and no notice has been issued to her and hence, the non-joinder of Nagarathinammal (being the elder daughter) https://hcservices.ecourts.gov.in/hcservices/ is fatal to the filing of the suit and as a matter of fact, the First Appellant/First Defendant (since Deceased) Sulochana is not a only Heir to the said Rajammal. 21.Added further, in the Written Statement of the First Appellant/First Defendant, it is also mentioned that late Rajammal has come under the influence of one Kanniappan in the year 1973 and he has been carrying on vegetable business at Kothawal Chavadi at the Stall next to the business of late Rajammal and because of his undue influence and by reason of the fraud played upon Rajammal, Kanniappan prevailed upon her and made her to execute two simple Mortgage Deeds, dated 16.09.1972 and 21.10.1974 in favour of Pushpavathi Ammal and Rajammal has been an illiterate person and there was no necessity for her to borrow any money from any one nor execute any Deed of Mortgage and also, the said Kanniappan kept secret of the mortgages and by colluding with Pushpavathi Ammal and bringing in Auction sale and immediately Rajammal passed away. 22.It is the case of the First Appellant/First Defendant that Pushpavathi Ammal issued a notice to her on 15.11.1980 through M/s.Murray and Co. calling upon her to discharge the said mortgage for which she has replied through her Advocate calling upon Pushpavathi Ammal and her agent Murray and Co. to disclose the particulars regarding the sum secured and regarding the actual sum due as Principal, the sum paid by Rajammal and also the arrears of interest if any and the rate at which the same is calculated. 23.A specific plea has been taken by the First Appellant/First Defendant in a Written Statement in Paragraph 10 to the effect that the property has been sold in an Auction on 08.03.1984 before the right of redemption existing in her favour extinguished and hence, the Respondents/Plaintiff have not become the absolute owners of the suit property and resultantly, they have no manner of right or title of interest over the same. 24.Besides above it is the plea of the First Appellant/First Defendant (since deceased) that the Respondents/Plaintiffs have not satisfied the requirements of Section 69 of the Transfer of Property Act and by fraud and collusion and have obtained a Sale Deed dated 16.11.1984 which is nothing but illegal and sham and nominal document. 25.At this juncture, the Learned Counsel for the Respondents/Plaintiffs cites the decision of the Honourable Supreme Court Narandas Karsondas V. S.A.Kamtam and another, AIR 1977 Supreme Court 774, wherein it is held as follows: https://hcservices.ecourts.gov.in/hcservices/ "A contract of sale in view of Section 54 of T.P. Act does not of itself create any interest in, or charge on, the property. The personal obligation created by a contract of sale (as recognised in Sec.3 of the Specific Relief Act and Sec. 91 of the Trusts Act) is described in Section 40 of the T.P. Act as an obligation arising out of contract and annexed to the ownership of property, but not amounting to an interest or easement therein. In India, the word "transfer" defined with referenced to the word "convey". The word "convey" in Section 5 of the T.P. Act is used in the wider sense of conveying ownership. AIR 1967 SC 744, Followed. The combined effect of Sec. 54 of the T.P. Act and Section 17 of the 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 instrument that the mortgagor's right of redemption will be extinguished. The conferment of power on mortgagee to sell without intervention of the Court in a mortgagee deed by itself will not deprive the mortgagor or 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. Therefore, until the sale is complete by registration the mortgagor does not lose right of redemption. 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 the mortgagor's. 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 mortgagor'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 conveyance, ownership passes from one party to another it cannot be said 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. AIR 1937 Mad 293 and AIR 1944 Bom 156 Approved. ILR (1967) 3 Mad 161. Overruled." https://hcservices.ecourts.gov.in/hcservices/ 26.He also relies on the decision of this court Purasawalkam Hindu Janopakara Saswatha Nidhi, Ltd. V. Kuddus Sahib and others, AIR 1926 Madras 841, wherein it is held that 'Notice is necessary whether the sale is for the amount due for principal or interest.' Also in the aforesaid decision, it is held as follows: "Where a principal appoints an agent with knowledge of his qualifications and so far as the agent is concerned he does what he thinks to be the best, there can be no question of negligence unless he has done anything which any reasonable man with his qualifications would have omitted to do." 27.This Court aptly points out the decision P.L.Chakrapani Naidu v. T.Gopal Mudaliar and others, T.K.Rajeswari Ammal and another v.T.Gopal Mudaliar and others, 1972 (II) MLJ 390, wherein this Court has held as follows: "It is settled law that a mortgagee is not a trustee for the mortgagor as regards the exercise of the power of sale. Power of sale is given to the mortgagee for his own benefit to enable him to realise his debt. The Court will not interfere merely to prevent its exercise contrary to the wishes or interests of the mortgagor or even if the mortgagee is seeking some collateral object and not merely the payment of his debt. The Court will not inquire into his motives for exercising it, so long as he acts bonafide. Mere use of the words fraud and collusion means nothing and there must be positive proof of the same. The burden of proving that a sale is invalid by reason of any infirmity or fraud or collusion is on the mortgagors. In the case of an Auction sale, there is no question of the mortgagee taking any particular care or taking special efforts to secure a good price, because so long as he does not interfere with the Auction and entrusts the sale of the property to an Auctioneer, the mortgagor must take the risk of whatever price the property fetches in the Auction. It is not the law that the mortgagee and the Auctioneer should adjourn the sale merely because the property does not fetch a price, fair according to the mortgagor and there are not large number of bidders participating in the Auction. The price a house would fetch at a public Auction would depend on various factors. In the instant case the price fetched cannot be said to be so inadequate as to raise any inference of fraud and collusion. If a sufficient number of bidders or better offers were not forthcoming, it was all https://hcservices.ecourts.gov.in/hcservices/ because of the obstructive tactics pursued by the mortgagors. It is true that a mortgagee exercising the power of sale cannot himself purchase the property. But fraud and collusion cannot be proved by mere suspicion and there must be convincing, acceptable evidence that the mortgagee maneuvered to have the property purchased in the name of the property purchased in the name of another benami for the former and that the former furnished the entire consideration." 28.Also, this Court recalls the decision Clara Mookerjea alias Smt.Mathuri devi and another v. Surendra Manilal Mehta and others, AIR 1963 Madras 208, wherein it is held here under: "The right of sale of the hypotheca, without the intervention of the process of Court with a mortgage has under Section 69 of the Transfer of Property Act, is a statutory right. It is as much and as full a right as the right of redemption of the mortgagor. The mortgagee is in no sense a trustee for the mortgagor in holding the power of sale, as he holds it for protection of his interests and for his benefit. So long as the mortgage money is not paid or validly tendered, the mortgage with full knowledge of a pending suit for redemption and perhaps to defeat the suit, can enforce his power of sale under S.69. But a purchaser at such a sale cannot avoid its setting aside by a Court on the ground of fraud. AIR 1941 Bom 339 and 1989-1 Ch. 762 and (1882) 20 Ch.D.220 and 1911 A.C. 722 and AIR 1933 Mad 736, Ref." 29.It is to be noted that the power of sale can be exercised by the mortgage in two cases which are mentioned in Section 69 (2) of the Transfer of Property Act. In the first case, the notice is required only where the mortgagee has become entitled to call for the principal money. It is necessary that the notice must state the payment of the principal money and default ought to have been made in payment for three months after service. The said three months must be from the date of receipt or service of the notice upon the mortgagor and not from the time the notice is dated. After the principal sum has become due, the notice may be given at any time and it is not restricted by the interest dates determined in the Mortgage Deed. In spite of irregularity in the notice in the absence of fraud the Court will not set aside a purchase, when the purchaser has entered and spent the money as per decision Metters v.Brown, (1863) 9 Jur.N.S.958. https://hcservices.ecourts.gov.in/hcservices/ 30.Similarly, by virtue of Section (4), it is mentioned that the purchaser's title shall not be impeached on the basis that due notice has not been given as per decision Metters v.Brown, (1863) 9 Jur.N.S.958. 31.A Court of equity will not restrain a sale at the instance of a mortgagee who has failed to issue the required notice, if there be a Clause in the Mortgage Deed for the protection both of the purchaser and of the mortgagor, to the effect that the purchaser should not be affected by the absence of such notice and that the remedy of the mortgagor ought to be by an action for damages as per Prichard v.Willson, (1864) 10 Jur.N.S.330. 32.If the mortgage is entitled to exercise the power, a Court of law cannot look into his motives for so doing as per decision Nash v. Eads, (1880) 25 So.Jo. 95 nor will it restrain completion of sale on the ground of undervalue and surprise as per decision Ferrand v.Clay, (1837) 1 Jur. 165. 33.By Sub-Section (3) of Section 69 of the Transfer of Property Act, the tile of a purchaser is not to be impeached on the ground of improper or irregular exercise of the power of sale, because of the fact that the remedy of a person damnified shall be in damages against the person exercising the power of sale. 34.It is quite evident that as per Ex.A.2 Sale Deed, dated 01.05.1964, the First Appellant/First Defendant's mother has purchased the suit property for a valuable consideration out of her own self acquisition. The First Appellant/First Defendant's mother Rajammal as per Ex.A.3 and Ex.A.4 has mortgaged the property in favour of Pushpavathi Ammal for a sum of Rs.10,000/- each. The said Pushpavathi Ammal has been given any powers as per Ex.A.3 and Ex.A.4 to bring the property in Auction as per Section