Open Access Research Article
A CRITICAL ANALYSIS ON HARISH CHANDRA V. CHANDRA SHEKHAR (AIR 1977 ALL 44) (By- Ravindranath Chowdary Namburu)
Published Paper
Article Details
Authored By- Ravindranath Chowdary
Namburu
3rd Year Law Student At
Symbiosis Law School, Hyderabad.
Introduction
And Scope
Importance
and relevance of property is irrefutable in today’s India. Property related
disputes dominate the courts and have a higher level of interest in public.
Property is regarded as an important aspect in socio-economic life of an
individual.[1]
There are
different ways to transfer or convey the property. Various legislations govern
the transfer of title depending upon the mode of conveyance. The Transfer of
Property Act, 1882 is the basic legislation which governs the transfer of title
between living persons only. The provisions of the act also include transfer of
immovable property and some of movable property barring few exceptions.
Mortgages, Lease, Gift and many more are included in the act where we would be
discussing certain provisions and rights of mortgagor and mortgagee with
respect to the case of Harish Chandra v. Chandra Shekhar.[2]
Where the
main issue was raised on disputed house owned by Smt. LaxmiBahu. The house was
mortgaged in favour of Ram Sumer for some amount. When LaxmiBahu expired, the
property which was in dispute was given to her daughter Smt. Kalawati as “stridhan.” As she has no interest on the
property she relinquished her rights in favour of her three brothers by
executing a deed of release. Two of three brothers who were not interested in
the above property, relinquished their rights in favour of the only remaining
brother who in turn became the sole mortgagor of the property.
The dispute
here was whether the sole mortgager is entitled to redeem the mortgaged
property from the mortgagee. There were a lot of allegations from mortgagee’s
side alleging that the sole mortgagor had relinquished his rights in favour of
mortgagee and it was a mere sale and took a shape of usufructuary mortgage. It
is therefore the defendant’s second appeal against the
decree of
the trial court. Detailed facts of the case are to be discussed together with
the concepts pertaining to it. As the trial court judgment was unavailable in
online court records, the case study was done on the basis of the judgment of
Supreme Court.
The scope
of study is confined to the concepts pertaining to the above case and the
rights of the mortgagor and the mortgagee of usufructuary mortgages, deeds of
release and relinquishment, execute to redeem property under mortgage,
principles of mortgage suits. All the concepts with respect to section 5 of The
Transfer of Property Act, 1882 and analysis of various cases mentioned in the
above case. Literature reviews on the relevant topics have been reviewed in
order to create a better picture of the case study.
Research
Objectives
1.
To analyse the judgment of the court
2.
To understand the concept of deed of relinquishment
3.
To comprehend the brief facts of the case
4.
To understand the right of the sole mortgagor to
redeem the property
5.
To know the findings of different cases mentioned in
the above case
Research
Questions
1.
What were the rulings of the Supreme Court in the
above case?
2.
What is a Usufructuary mortgage and its types?
3.
Whether the relinquishment entitles plaintiff to
redeem the disputed property?
4.
Whether the deed of release is in the nature of deed
of conveyance?
5.
Who is the ‘mortgagor’ and the ‘mortgagee’ in this
case?
6.
What is the concept of pre-emption with respect to the
usufructuary mortgages?
7.
Whether the sole owner i.e. stridhancan transfer the property to her brothers by the deed of
release?
Research
Methodology
In order to
meaningfully get answers to the research questions and accomplish the
objective, the researcher has combined doctrinal, analytical and empirical
research methodology to get a complete and confirmed result. The methodology of
the research differs according to the subject. The study is doctrinal in
nature. For the present work, doctrinal method is found to be suitable because
it involves theoretical analysis of various concepts. Since the area is exclusively
related to
the
property law, all standard tools of doctrinal research are applied and adopted
the techniques of research according to the contextual requirements. The researcher
has gone through various books, articles and legal databases which have helped
in acquiring lot of information and knowledge about the present research topic.
Literature
Review
Abhisek Agarwal,[3]in his
article on lessor’s transferee, mentioned that if a property is mortgaged by
the mortgagor If the landlord used a usufructuary mortgage to secure the
property, the usufructuary mortgagee would be entitled to rent and income
earned in his own right and on his own account. In the absence of any negation
of such rights under the rant act, a mortgagee in possession will have the same
right as the owner to pursue recovery of possession of the leased premises from
a tenant for his own bona fide requirements of use. Accordingly, the plaintiff
and his co-sharers are entitled to rents and income earned by mortgaged
property which was in dispute.
In the official website of notaries of France,[4]
it was mentioned about the concept of Donation (Gift with respect to Indian
perspective) having the right of usufruct the property. The privileged rights
of the owner are divided into two components. One is to usufruct i.e. to
receive the rents and income made out of the property and bear the ownership
i.e. to dispose of the property. This heritage technology allows the donor, not
only to maintain the right to use and rent, but also to restrict the tax
payable. The donor also has the right to pay the land. Bare property refers,
depending on the beneficiary’s age, to a percentage of the value of the whole
property as defined by statute. The usufruct shall be extinguished on the death
of the donor, to the advantage of donors who are therefore fully owned without
taxes or any further formalities.In the same way the owner of disputed land
Smt. LaxmiBahu passed away leaving the property to her daughter i.e. Smt.
Kalawati to enjoy the rents and income arising out of the house.
Sneha Sharon Mammen,[5] in her
article explained about the procedure for surrender of property to another
legal heir by one legal heir. According to her a co-owner of the property can
relinquish his rights by executing a deed of relinquishment for smooth and
clarity transfer of parental or ancestral property in favour of other co-owner
or legal heir. She states that the person who is relinquishing
the deed must
be compensated otherwise it turns irrevocable. The relinquishment deed must be
registered in order to consider it as a legal proof of relinquishment. It is
observed that stamp duty will be applicable to the part of property that is
being relinquished. Accordingly, in the above case, the defendants 4, 5 and 6
have relinquished their rights in favour of plaintiff by a release deed as
mentioned in the facts of the case. It was further alleged by the mortgagees
that the transfer of property rights was notadmissible by law.
Hathika v.
P. Padmanabhan[6]arose from
a suit for redemption of mortgage. The defence by the mortgagee was that the
document in question was a lease and not a mortgage and therefore the suit was
not maintainable.It was pointed out that the nomenclature of the document was
conclusive. In the instant case though it was styled as a usufructuary
mortgage, the transaction was held to be an anomalous mortgage in view of the
right conferred on the mortgagee to bring the mortgaged property to sale for
realisation of the amount borrowed. The document is not a usufructuary mortgage
simpliciter whereas it partakes the character of a simple mortgage also. Such a
mortgage was, therefore, one coming under the category of anomalous mortgage.
The rights and liabilities of the parties to an anomalous mortgage are to be
determined by the contract as evidenced in the mortgage deed by virtue of
section 98 of the Act. In the light of this the plea that the defendant
mortgagee is a lessee of the building was unsustainable. The mortgagor was held
entitled to enforce his right to get the mortgage redeemed. Accordingly, in the
same case it can be observed that the mortgagees further alleged that the
transaction between LaxmiBahu and Ram Sumer is merely a sale and was given a
shape of usufructuary mortgage.
Y. Srinivas Rao,[7]in his
article relating to mortgaged suits he has explained about who are necessary
and properties in a mortgaged suit. The question of who are all the necessary
parties to be impleaded as party defendants in a mortgage suit is one of
misjoinder or non-joinder of parties, not of jurisdiction.Both persons involved
in the equity of redemption and all those who assert right and interest through
the mortgagee should normally be necessary parties in a suit for redemption,
foreclosure, or sale of mortgaged property brought by the respective parties to
the mortgage, and Persons who claim adverse title dominant in any or all of the
mortgaged properties but not from the mortgagor or mortgage are not required to
be named as parties in a suit like this.However, the above rule is not rigid or
absolute, and the court must consider whether such a course would cause
inconvenience or uncertainty in each case, exercising its discretion
judiciously and properly.In such circumstances, if the Court considers it
reasonable, appropriate and sufficient in the interests of all
the parties
to decide on matters pertaining to the overriding title, the implication of
such parties and the avoidance of multiplicity of disputes is not only right
but even desirable. Accordingly, in this case it was alleged that after the
death of Devi Charan i.e. respondent 1, all his heirs should have been
impleaded and further questioned by the court whether the suit is bad for
non-joinder of all the heirs.
Detailed
Facts Of The Case
Going into
the facts of the case, it is nothing but about allegations surrounding around
the mortgaged property. The owner of the property (house) was Smt. LaxmiBahu
who had executed a deed of mortgage with respect to the said property to Ram
Sumer for mortgage amount of Rs. 2,500. Soon after executing the deed of
mortgage, owner of the property Smt. LaxmiBahu passed away leaving behind 3
sons including the plaintiff and a daughter Smt. Kalavati, defendant no. 4.
Defendant 1 and 2 are the successors of Ram Sumer and the suit which gave rise
to this appeal had been filed by respondent no. 1. Following her mother’s
death, being the co-owner of the property, defendant 4, having no interest in
the property, executed a deed of relinquishment in favour of plaintiff and her
two brothers, defendants 5 and 6. Later, due to some unnoticed circumstances,
defendants 5 and 6 relinquished their property rights by a deed of
relinquishment in favour of plaintiff, making the plaintiff the sole mortgagor
of the aforesaid property.
When the suit was instituted against
family of LaxmiBahu, they did not contest the suit resulting the case to
proceed towards ex parte against them. Later, defendants 1 and 2 died during
the pendency of suit leaving behind a written statement, stating that after the
death of Smt. LaxmiBahu, the property has been devolved upon defendant 4 i.e.
her daughter Smt. Kalawati alone. It was also stated that relinquishment of
rights in favour of her brothers including the plaintiff by Kalawati does not
feed any title and the defendants 1 and 2 denied the relinquishment deed
executed in the favour of her brothers including plaintiff. Further the
defendants 1 and 2 called the deed of mortgage as merely a sale in the nature
of usufructuary mortgage and claimed that they have done improvements in the
property and are entitled to expenses. And further pleaded that after the death
of Devi Charan, all his heirs should have been impleaded.
The court framed the issues which
are as follows:
1.
Whether defendants 1 and 2 have done any improvements
and are entitled to receive any expenses?
2.
Whether plaintiff is entitled to receive any expenses?
3.
Whether the deed is in the nature of usufructuary
mortgage?
4.
Whether the facts presented by defendants 1 and 2 are
true and admissible?
5.
Whether the sole mortgagor is entitled to redeem the
mortgaged property?
6.
Whether Smt. Kalawati had executed deed of
relinquishment in favour of her brothers?
Following
the detailed facts and important issues framed in the case, the decision taken
by the Supreme Court will be discussed in the next part.
Ruling Of
Supreme Court
The Supreme Court in this case of
mortgage, after investigating all the issues and going through evidence
submitted by the parties, came to the decision that the aforesaid transaction
of disputed house was a usufructuary mortgage and not a sale and the evidence
and the allegations made by the appellant were false. The trial court further
held that a deed of relinquishment was executed by Smt. Kalawati, defendant No.
4 in favour of her three brothers and by that the plaintiff became one of the
mortgagors andentitled to sue and after the deed of relinquishment executed by
defendants Nos. 5and 6 in his favour he became the sole mortgagor. It also held
thatthe original mortgagee or the appellants had not made any improvement and
they arenot entitled to any amount on that account. It rejected the plaintiff's
plea that plaintiffhas relinquished his rights in favour of defendant. On the
above findings, the trialcourt decreed the plaintiff's suit for redemption on
payment of Rs. 2,500.
The court
found out that plaintiff and his co-sharer did not relinquish the right
infavour of the defendants and is also a concurrent finding of fact which
cannot bechallenged in second appeal.It was, however, contended on behalf of
the appellants that according to the case set up by the plaintiff himself in
the plaint, Smt. Kalawati alone was entitled tosucceed to the property in
dispute which was the Stridhan of
Smt. LaxmiBahu. Theplaintiff or his two brothers Chandrabhal and Chandra Shish
did not inherit theproperty at all. It was argued that Smt. Kalawati being the
sole owner of the propertyin dispute could certainly transfer this property to
the plaintiff and his other twobrothers.Following the decision of the court,
the concepts referred to in the case will be
discussed
overall.
Concepts
Referred To The Above Case
Usufructuary Mortgage
It is
defined under section 58(d) of Transfer of Property Act, 1882. In this form of
mortgage, the mortgagor gives the mortgagee express or implied possession of
the mortgaged property and authorises him to keep it until the mortgage is paid
off. He also authorises the mortgagee to receive the rent and income generated
by the mortgaged property in lieu of interest, partially or entirely, or in
payment of the mortgaged money, partially or entirely.
Rights Of Mortgagor And Mortgagee In Usufructuary
Mortgage
In a
usufructuary mortgage, the mortgagor has a right to redeem the mortgaged
property, transfer the property and mortgagor rights to a third party, right to
improve the mortgaged property, right to receive the rents and expenses arising
out of the property, right to grant a lease, right to inspect and produce
documents. It is to be noted that only few rights are transferred to the
mortgagee.In the above case, Plaintiff being the sole mortgagor has a right to
redeem the property and entitled to receive the costs and expenses out of
mortgaged property. Coming to the rights of mortgagee, he has a right to
transfer the property if the mortgaged money is not paid in time, has a right
to claim any charges or taxes paid by the mortgagee.
Procedure Of Deed Of Relinquishment (By Deed Of
Release)
Relinquishment
deeds are legal documents that allow a person to give up their legal rights to
a property to another person with their permission. A deed of release, also
known as a deed of re-conveyance, on the other hand, is a legal document that
is used to release one's claims against a specific property. A deed of release
is a legal document that relieves the parties of all prior obligations. There
isn't much of a difference between the two. While the sense in which the terms
are used can differ at times, the basic definition of the two terms
(relinquishment deed and release deed) is the same.
A release
deed, on the other hand, can be enforced against someone who previously had a
vested interest in the land, whether or not they were coparceners. When an
individual applies for a mortgage loan, the bank takes full ownership of a
property that the homebuyer already owns as
collateral.
The mortgage is returned to the owner along with a release deed until the loan
is paid in full. Via the mortgage release deed, the bank relinquishes temporary
ownership of the mortgage to its owner. It is not mandatory for the parties
involved in a mortgage release deed to be relatives or coparceners.
Right of Redemption
The right
to redemption, as established by section 60 T.P. Act, is a powerful tool for protecting
a mortgagor's interests. Under Indian law, the mortgagor is the owner who has
relinquished any ownership rights, and the right of redemption is the right
that he exercises as a result of his residuary ownership to reclaim what he has
relinquished. However, in India, this right to salvation is a contractual one.
A right of redemption is a function of an existing mortgage that lasts as long
as the mortgage does.According to
recent judicial precedents, dismissal of an earlier suit for redemption, whether
abated, withdrawn, or in default, does not preclude the mortgagor from bringing
a second suit for redemption as long as the mortgage remains in force. This
privilege can only be terminated by the parties themselves or by a court order.
Cases
Referred To In The Judgment
Studying
the above judgment, it was comprehended that 1. KuppuswamyChettiar vs. A.S.P.A. ArumugamChettiar and Ors.[8]
and HutchiGowder v. BheemaGounder[9]
were the cases referred to in the following judgment. While the apex court in
this case found that the first referred case supports the contention of the
plaintiff while second case supports the contention of appellants. In the case
of KuppuswamyChettiar vs. A.S.P.A.
ArumugamChettiar and Ors., The registered release deed was executed in presence
of more than two witnesses without consideration. The case questioned whether
the deed had effectively passed the title or transfer title to one having no
title. Further, it questioned whether deed could enlarge interest of release. The
Court ruled that the release deed clearly showed an intention to transfer
title. Further, the deed was in favour of a person having no interest in the
property and it could not take effect as an enlargement of an existing estate. Moreover,
a deed of release could transfer title to one having no title before the
transfer. Accordingly, as we take role of Smt. Kalawati, she has left no
interest in the disputed property and hence relinquished her rights in favour
of her brothers who have no title before the
transfer.
Though Supreme Court had referred to
HutchiGowder v. BheemaGounder, it was
Kuppuswami v. Arumugamwhich the court decided to support the arguments of
the plaintiff as the madras case quoted on behalf of appellant which cannot be
regarded as good law. In view of the above cases, the court held that a deed of
release can confer the title to one having no title before the transfer.
Findings
And Discussions
In this case, as the judgement is
challenging to comprehend, the researcher decided to discuss the timeline of
the transactions and parties involving in the case with help of table.
Firstly,
moving towards to the parties,
|
Smt.
LaxmiBahu (owner)
|
Ram Sumer
|
|
Defendant no. 3 (husband deceased)
|
Devi
Charan (Def. no. 1)Son of Ram
Sumer
|
|
Smt.
Kalawati (Def. no. 4)
|
Devi
Prasad (Def. no. 2)Son of Ram
Sumer
|
|
Chandra
Shekhar (Plaintiff)
|
|
|
Chandrabhal
(Def. no. 5)
|
|
|
Chandra
Shish (Def. no. 6)
|
|
Therefore,
it was found that suit gave rise from Devi Charan and followed by his death it
was followed by his son, Harish Chandra.
Secondly,
the timeline of the transactions are as follows,
1.
10-1-1930 = Smt. LaxmiBahu mortgaged a house to Ram
Sumer
2.
30-1-1930 = Smt. LaxmiBahu passed away
3.
10-12-1947 = Smt. Kalawati relinquished her rights in
favour of three brothers
4.
16-1-1950 = Def. 5 and 6 relinquished their rights in
favour of plaintiff
5.
7-8-1971 = Judgment given by trial court
6.
27-1-1976 = Judgment given by appellate court
Therefore,
by the timeline of the case, it can be observed that the case was under trial
for almost 25 years from the date of last transaction of relinquishment.
Though it was found that that the
defendants 5, 6 and plaintiff have a pre-existing title after the death the
LaxmiBahu, Smt. Kalawati can still transfer her rights to her brothers because
she left
with no
interest in the property and regarded the plaintiff to be the owner or
mortgagor of the property.
Conclusion
As a result
of present case analysis, all the questions and objectives have been met and
carefully presented in the paper. After 25 years of constituting the suit of
mortgage, it was decided by the apex court that the plaintiff is the soul
mortgagor and has a right to receive compensation if any. The release deeds
executed in favour of the plaintiff lawful as considered in the case of Kuppuswami v. Arumugam. The court
further held that the mortgage was a usufructuary mortgage by denying the
allegations made by the appellants. Various aspects pertaining to the case have
been discussed and presented in proper manner. As the judgment of the court was
difficult to comprehend, the researcher has given his best in analysing and
presenting it in easy way. Therefore, it is stated that all the matter
presented in this paper is subjected to the scope and all above facts are true
to the knowledge of the researcher.
Sources
1.
Athulya, Are
Relinquismnent Deeds Different from Release Deeds?, Vakil Search (7th, Jan. 2020), https://vakilsearch.com/advice/relinquishment-deeds-different-release-deeds/
2. Monika, Procedure for getting a decree in Redemption
Suit, Ipleaders (12th
Jun. 2019), https://blog.ipleaders.in/decree-in-redemption-suit/
3. Srinivas Rao Y, Principles Relating to Mortgage Suits, Word Press (26 Apr. 2018), https://articlesonlaw.wordpress.com/2018/04/26/principles-relating-to-mortgage-suits/
4. Sneha Sharon Mammen, What happens if a co-owner wants to give up
his ownership rights?Proptiger (2nd Dec. 2020), https://www.proptiger.com/guide/post/what-happens-if-a-co-owner-wants-to-give-up-his-ownership-rights
5. HeinOnline
6. Manupatra
7. Succession: What is a Donation with Right of Usufruct? Notaires.fr (20th Feb.
2020),
https://www.notaires.fr/en/donation-estate/donation/succession-what-donation-right-usufruct.
Article Information
A CRITICAL ANALYSIS ON HARISH CHANDRA V. CHANDRA SHEKHAR (AIR 1977 ALL 44) (By- Ravindranath Chowdary Namburu)
Author Name: Ravindranath Chowdary Namburu
Title: BANK GUARANTEES: A CRITICAL ANALYSIS ON HARISH CHANDRA V. CHANDRA SHEKHAR (AIR 1977 ALL 44)
Email Id: chravindranath28@gmail.com
- Journal IJLRA
- ISSN 2582-6433
- Published 2022/05/17
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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