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Redemption of Mortgage

One Mr Arun Rai had filed a suit OS No. 45 of 2002 for redemption of mortgage against Mr Kiran Kumar and Mr Satish Sharma and Mr Birender Das. It is the case of the plaintiff / Arun Rai, that he is the owner of the lands measuring 3 acres 10 guntas in Sy. No.99/1, situated at Channapatna Village, Nanjangud ( herein after referred to as suit schedule property) that for the legal necessity, he had mortgaged the suit schedule property in favour of the Mr Satish Sharma / 2nd defendant for Rs.3,000/- on 3/10/1980 and the period of mortgage was 5 years. By virtue of the mortgage, the 2nd defendant was put in possession of the suit schedule property and subsequently they came to know that on 19/6/1982, the 2nd defendant had assigned the mortgage in favour of the 3rd defendant/ Mr Birender Das vide assignment deed dated 19/6/1982 and put the 3rd defendant in possession of the suit schedule property.

On 26-04-1982, plaintiff had entered into an agreement of sale to sell the schedule property in favour of Kiran Kumar (Defendant No.1) for a sum of Rs. 6000/-

Mr Kiran Kumar had filed a suit 48 of 1983 on the file of the Civil Court and Additional Judicial Magistrate of First Class for a decree of specific performance against all the three persons i.e Vendor, Mortgagee No.1 and Mortgagee No.2. The vendor though served remained exparte. Mortgagee No. 1 and 2 did not file written statement. This suit came to be decreed. The Trial Court had directed the Arun Rai to execute the sale deed by receiving Rs.1000/- and the trial Court had directed the mortgagee to receive the mortgaged amount and to return the mortgage deed with the shara and to hand over the schedule property within one month and in default the plaintiff was entitled for future mesne profits as provided under Order 20 Rule 12 of the Code of Civil Procedure.

Mr Kiran Kumarin pursuant to the above decree has taken possession of the schedule property from the mortgagee. But MR Arun Rai had not executed the sale deed.On 20-06-1996, Kiran Kumar had filed a petition for Execution of the decree in Ex No. 64 of 1996 on the file of JMFC Nanjungud. But this execution was dismissed as not pressed on 28-06- 1997, as the petitioner in this execution case had not complied with the office objections to pay the deficit court fees and hence on advocate submission the execution petition was dismissed.

It is the case of the plaintiff that the Decree in O.S. 48 / 83 dated: 3-8-1984 came to an end by efflux of time as the Decree holder had not exhausted the remedy available under the said decree and hence the Judgement and decree is a nullity and un-enforceable by the efflux of time. Thus the Plaintiff had no obligations to give importance to the said Judgement and Decree and sought to redeem the mortgage and expressed their willingness to pay the mortgage amount of Rs. 3000/- to the first mortgagee i.e., MrSatish Sharma and that their claim was within statutory period. The further claim of the plaintiff was they were surprised to learn that the suit schedule property was in possession of the Kiran Kumar and the said possession was for all practical purpose was possession of a mortgagee only.

Defendant No.1/ Kiran Kumar filed written statement that the suit for mortgage was not maintainable and that he had paid Rs. 3000 to Mr satish Sharma/ Second Mortgagee who was in possession of land and he had taken possession of land from him as per the court decree and that he is in continuous possession of land without any interruption from 1986 till 2002

The trial court had decreed O.S.No.45 of 2002 holding that appellants have no title to the schedule lands and their occupation is that of a mortgagee and that, therefore, the plaintiff was entitled for a decree of redemption of mortgage. The Defendant No.1 / Krishna Kumar filed Regular Appeal in RaA No. 45 of 2004 and the Lower appellate court up held this findings. .
Defendant No.1/ Krishna Kumar filed Regular Second Appeal/ RSA before the High Court of Karnataka and contending that the suit for redemption of mortgage was not maintainable as the mortgage stood discharged by virtue of Judgement in OS No. 48 of 83 and relied upon Section 60 of the Transfer of Property Act .Mr Arun Rai cousel contended that there is no valid discharge of mortgage as there was no endorsement to this effect on the mortgage deed by the Mortgagees acknowledging the receipt of the money. Hence possession of Mr Krian Kumar was as a Mortgagee and therefore the mortgage was subsisting and the plaintiff/ Anil Rai has a right to seek redemption.
The High court upheld the contention of Defendant No.1/ kiran kumar and set aside the concurrent judgement of both the courts below and dismissed the suit for redemption.
Questions
  1. If you were appearing for the plaintiff MR arun Rai what would be your argument in support of the case ?
  1. If you were appearing for the defendant No.1/ Mr Kiran Kumar what would be your defense in this case?
  1. If you were appearing for the Mortgagee/s what is your defense
Common questions to above three counsels:
  • Is the suit possession of Mr Kiran Kumar legal or was he only a assignee mortgagee
  • Does the right of a mortgagee gets merged with the right to acquire absolute title in the property in question
  • Scope of Section 58 and 60 of Transfer of Property Act.
  • Are there further appeals/ remedy from the judgment of the High Court.