IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. RSA No.: 314 of 1997 alongwith Cross Objections No.122 of 1998. Reserved on: 09.07.2008. Decided on: 18.08.2008. Shri Shiv Charan Verma. … … Appellant. Versus Shri Shiv Parshad. … … Respondent. Coram: The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting?1 Yes. For the Appellant: Mr. G.D. Verma, Senior Advocate with Mr. B.C. Verma, Advocate. For the Respondent: Mr. K.D. Sood, Advocate. Rajiv Sharma, Judge: R.S.A. No.314 of 1997: This regular second appeal has been preferred against the judgment and decree passed by the learned District Judge, Solan in Civil Appeal No.71-NL/13 of 1996 dated 31.10.1997. The brief facts necessary for the adjudication of this regular second appeal are that the respondents/plaintiffs (hereinafter referred to as the plaintiffs for convenience sake) filed a civil suit for possession by Whether reporters of local papers may be allowed to see the judgment? Yes. - 2 - way of redemption in the Court of Sub Judge Ist Class, Nalagarh. The appellants/defendants (hereinafter referred to as the defendants for convenience sake) contested the suit. The plaintiff filed replication to the written statements filed by the defendants. The learned Sub Judge Dismissed the suit on 23.9.1996. The plaintiff preferred an appeal against the judgment and decree dated 23.9.1996 before the learned District Judge, Solan. The learned District Judge, Solan allowed the appeal on 31.10.1997. This regular second appeal has been filed against the judgment and decree of the learned District Judge, dated 31.10.1997. The regular second appeal was admitted by this Court on 10.3.1998 on the following substantial questions of law:- 1. Whether the findings as recorded by the learned District Judge are devoid of legal force those being without proper appreciation, reading and discussion of oral and documentary evidence and pleadings? 2. Whether the mortgage deed Ex.PW1/A is constituting a sham transaction and the same could not be relied upon? 3. Whether the civil court had no jurisdiction to try the suit? 4. Whether the findings of the Ld. Sub Judge that the appellant is a tenant over the accommodation in question could not be up set in the absence of any just and legal claim? 5. Whether the transaction of alleged mortgage has not been established and decree for possession could not be passed? Mr. G.D. Verma, learned Sr. Advocate had strenuously argued that the judgment and decree dated 31.10.1997 passed by the learned District Judge is not sustainable in the eyes of law. He then contended that the mortgage deed dated 10.2.1982 Ex.PW-1/A was a sham transaction. - 3 - According to him, the premises were let out to his client. Mr. K.D. Sood had supported the judgment and decree dated 31.10.1997. I have heard the learned counsel for the parties and gone through the record of the case carefully. Since all the substantial questions of law are interconnected, they are taken up together for discussion to avoid repeatedly referring to the evidence. The mortgage deed was entered into between the plaintiff and the defendant on 10.2.1982, Ex.PW-1A which was registered before the Sub Registrar. The mortgage deed was scribed by PW-1 Haussan Chand and attested by Pohu Lal, PW-3 and the other witness has died. Ex.P-2 is the copy of mutation No.316, dated 8.11.87 attested by the Assistant Collector Grade-II on the basis of mortgage deed Ex.PW-1/A. This mutation had been given effect in the copy of Missal Hakiat, Ex.P-1 prepared during the settlement operation. Mr. G.D. Verma, learned senior counsel had strenuously argued that the suit premises were let out to his client by the plaintiff on monthly rent of Rs.500/- and his client had been paying rent to the plaintiff and as such, the relationship of landlord and tenant existed between the parties. According to him, since the premises were let out to his client, civil Court had no jurisdiction to try the suit. He further contended that in the month of December, 1988 the plaintiff had spent Rs.10,000/- and according to him the value of the property was more that Rs.1,00,000/- and the same could not be mortgaged for a paltry sum of Rs.500/-. The court has to consider whether the mortgage deed Ex.PW-1/A is a sham transaction to defeat the provisions of law. - 4 - The mortgage deed was executed on 10th February, 1982 and the mutation was attested on 8.11.1987. The defendant has conceded his status of a mortgagee at the time of attestation of the mutation. He could have argued before the competent authority at the time of attestation of the mortgage on 8.11.1987 that he was not mortgagee but a tenant. He has not chosen to do so. The defendant had tried to prove that he had been paying monthly rent on the basis of entries Ex.PW-4/A to Ex.PW-4/W from 9th March, 1988 to 11.6.1992. These entries were made after March, 1988 and no such entry existed from the commencement of mortgage, i.e. 10th February, 1982. The defendant had admitted his status of mortgagee on 8.11.1987 and the first entry is dated 9th March, 1988. This record always remained in possession of the defendant. There is no evidence that the record of the accounts was submitted to any public servant such as Income Tax Department or the Sales Tax Department. The Court has now to consider the submission of Mr. G.D. Verma, the learned Senior counsel that the value of the property was higher and the plaintiff could not have mortgaged the property for a sum of Rs.500/-. The plaintiff had appeared as PW-1. He has stated that in January, 1982 his parent became blind and he was in dire need of money. This fact has been admitted by the defendant while appearing as DW-1. The fact that the defendant had spent considerable money in improving the property will not make mortgage deed dated 10.2.1982 a sham transaction. The defendant has not produced any receipt to establish that he was paying rent of Rs.500/- per month. DW-4 in his cross-examination has conceded that the disputed premises were mortgaged by the plaintiff in favour of the defendant for a sum of Rs.500/-. The defendant had voluntarily entered - 5 - into the agreement on the basis of mortgage deed dated 10th February, 1982. The same was attested on 8.11.1987 and the entry was made in the Misal Hakiat. The evidence brought on record conclusively proves that the suit premises were mortgaged by the plaintiff with the defendant for a sum of Rs.500/- by way of a valid mortgage deed Ex.PW-1/A. The mutation Ex.P-2 was sanctioned in accordance with law on 8.11.1987. The mortgage deed was not a sham transaction as argued by Mr. G.D. Verma. In the same or similar facts their Lordships of the Hon’ble Supreme Court have dealt with in detail Sections 34, 65 and 92(1) of the Evidence Act, 1872 in Ishwar Dass Jain (dead) through LRs. V. Sohan Lal (dead) by L.Rs., AIR 2000 SC 426. The facts of the case of Ishwar Dass Jain were that the plaintiff had mortgaged the entire shop and his 5/6th share therein and gave possession of the whole shop to the defendant for Rs.1,000/-. He filed a suit for redemption and recovery of possession from the defendant. The mortgage deed stated that on redemption possession had to be delivered back to the mortgagor. On 1.2.1981 the plaintiff demanded production of the deed and possession on redemption. The defendant did not comply. The defence put up by the defendant was that there was no relationship of mortgagor and mortgagee between the parties, but that the relationship was as landlord and tenant. It was also alleged by the defendant that plaintiff was a man of substance and very rich and there was indeed no occasion to mortgage the same for a petty sum. Their Lordships have framed the following points for consideration:- “(1) Whether the High Court can interfere under Section 100, CPC (as mentioned in 1976) with the findings of fact arrived at by the lower appellate Court if vital evidence which could have led to a different conclusion was omitted or if - 6 - inadmissible evidence was relied upon which if omitted, could have led to a different conclusion? (2) Whether on the facts of the case, the mortgage was proved by the plaintiff by production of a certified copy of the deed? (3) Whether Section 92(1) of the Evidence Act could be a bar for proving a document to be a sham document? (4) Whether the Exs. D2 to D5 were only extracts from accounts books and could not be treated as account books for purposes of Section 34 of the Evidence Act and were not admissible? (5) Whether the lower Courts had omitted vital evidence from consideration? (6) Whether the mortgagee who got possession of the entire property under the deed of mortgage could be permitted to deny the title of the mortgagor either wholly or partly? (7) What relief?” Their Lordships of the Hon’ble Supreme Court have held as under:- “The point here is whether oral evidence is admissible under Section 92(1) of the Evidence Act to prove that a document though executed was a sham document and whether that would amount to varying or contradicting the terms of the document. The plea of the defendant in the written statement was that mortgage deed though true was a sham document not intended to be acted upon and that it was executed only as a collateral security. It was pleaded that the plaintiff demanded that a mortgage deed be executed by defendant as "collateral security in order to guarantee that the shop will be vacated by the defendant whenever demanded by the plaintiff" and that this was done - 7 - to circumvent the rent control law. It was said that the alleged transaction of mortgage was a sham transaction, executed only with aforesaid object. The consideration of Rs. 1000/- "was only in the nature of a collateral security or 'pagri'." The plaintiff was and is a rich man and there was no occasion for him to mortgage his property. It was further pleaded: "The plaintiff thus demanded Rs. 1000/- from the defendant by way of security and asked the defendant to thumbmark some writing to arm the plaintiff with a right to get the shop vacated according to his sweet will. The defendant who was in dire necessity of the shop, had to agree on the said condition put forward by the plaintiff". But the question is whether on the facts of this case, the reason given by the defendant in his evidence for treating the mortgage as a sham document, can be accepted. The reason given by the defendant appears to us rather curious. One can understand a debtor incurring a debt and executing a deed as collateral security. There is no such situation here. Further, if it is a deed of collateral security by defendant, then the defendant would have had to execute a deed in favour of the plaintiff and not vice- versa. Here the plaintiff-owner has mortgaged his shop to the defendant, as security. The plea and evidence of collateral security offered by the defendant appears to us not to fit into a situation where the plaintiff has executed the mortgage. Obviously, if the plaintiff wanted to secure something by way of an additional security from the defendant, the normal course would have been to ask the defendant to give such a security and to for the plaintiff to execute a mortgage. Thus the reason mentioned and - 8 - evidence given by the defendant as to why a sham document was executed falls to the ground. Now under Section 34 of the Evidence Act, entries in "account books" regularly kept in the course of business are admissible though they by themselves cannot create any liability. Section 34 reads as follows : "Section 34 : Entries in books of account when relevant - Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability". It will be noticed that sanctity is attached in the law of evidence to books of account if the books are indeed "account books i.e. in original and if they show, on their face, that they are kept in the "regular course of business". Such sanctity, in our opinion, cannot attach to private extracts of alleged account books where the original accounts are not filed into Court. This is because, from the extracts, it cannot be discovered whether accounts are kept in the regular course of business or if there are any interpolations or whether the interpolations are in a different ink or whether the accounts are in the form of a book with continuous page numbering. Hence, if the original books have not been produced, it is not possible to know whether the entries relating to payment of rent are entries made in the regular course of business. The judgments of all the three Courts therefore are set aside. The suit is decreed for redemption as follows. The appellants are entitled to redeem the usufructory mortgage and get possession of the suit shop from the defendant, if the appellants deposit in the trial Court, within three months from today, the sum of Rs. 1000/-. There is no need to deposit any interest inasmuch as according to the deed, the - 9 - defendant was to be in possession and interest was to be set-off against the occupation of the shop. We direct that on such deposit of Rs. 1000/-, the defendant will produce the mortgage deed into Court for cancellation. In case he does not produce the deed, within the said period, it will be deemed that the mortgage is cancelled. On such deposit of Rs. 1000/- as aforesaid, the defendant shall restore possession to the appellants. On such restoration of possession, defendant shall be entitled to withdraw the sum of Rs. 1000/-. In case the defendant does not surrender possession as aforesaid, it will be open to the appellants to seek possession by way of execution.” In view of the definitive law laid down by the Hon’ble Supreme Court in Ishwar Dass Jain’s case supra, there is no substantial question of law involved in this regular second appeal and the same is dismissed. CROSS OBJECTIONS NO.122 of 1998: Mr. K.D. Sood had strenuously argued that his client was entitled to mesne profits at the rate of Rs.2000/- per month instead of Rs.500/- per month alongwith interest at the rate of 18% per annum from 17.3.1993. He has further strenuously argued that no valid reasons have been assigned for reducing the mesne profits from Rs.2000/- to Rs.500/- per month. Mr. Sood has relied upon the statement of plaintiff (PW-4) who had stated that the shops have been rented at Nalagarh at the rate of Rs.1500/- to Rs.2000/- per month. DW-5 Dinesh Kumar, Clerk, Municipal Council, Nalagarh had stated that rent of municipal shops at Nalagarh is Rs.1400/- per month. He has further deposed about the existence of six feet wide verandah in front of such shops and also 50 feet x 50 feet open space. In the - 10 - present case no dimensions of the open space or verandah have been given. The plaintiff has not led any documentary evidence to establish that the premises could fetch rent at the rate of Rs.2000/- per month. The first appellate Court has come to just conclusion that a sum of Rs.500/- per month was a reasonable amount towards mesne profits w.e.f. 17.3.1993. Accordingly, there is no merit in the cross-objections and the same are dismissed. No costs. August 18, 2008. (Rajiv Sharma) (sck). Judge.