S ARUNACHALAM ASARI Vs. SIVAN PERUMAL ASARI

JUDGEMENT

(1.) THE plaintiff is the appellant in this second appeal which arises out of a suit filed by him to enforce the mortgage, Ex. A-4, executed by the first defendant in favour of the plaintiff for a sum of Rs. 700 on 5-12-1953. The second defendant claimed rights under a sale deed, Ex. B-4, executed by the first defendant on 28-12-1953, for a sum of Rs. 1000. The plaintiff's mortgage was registered on 3-7-1954. The first defendant remained ex parte and the second defendant alone resisted the suit on the ground that the mortgage in favour or the plaintiff is a sham and nominal document fraudulently brought into existence antedating it after the sale deed Ex. B-4, in favour of the second defendant. He further contended that when he purchased the property from the first defendant, he purchased it in good faith for valuable consideration and without knowledge that the first defendant had already executed a mortgage deed, Ex. A-4, which was registered on 3-7-1954. The trial court dismissed the plaintiff's suit holding that the mortgage, Ex. A-4, in favour of the plaintiff was a sham and nominal document and that it was brought into existence ante-dating the same with a view to defeat the rights of the second defendant. It also held that the second defendant purchased the property without any knowledge of the rights of the plaintiff under the alleged mortgage, Ex. A-4. But on appeal, by the plaintiff, the lower appellate Court came to a contrary conclusion and held that the mortgage, Ex. A-4, was not an ante-dated transaction, but it was a perfectly bona fide and genuine transaction. But, on the other point, it concurred with the view of the trial Court that the second defendant purchased the property without the knowledge of the mortgage in favour of the plaintiff and therefore the mortgage would not be enforceable against the property purchased by the second defendant. Hence this appeal by the defeated plaintiff.

(2.) MR. Shanmugham, learned counsel for the second defendant, drew my attention to several suspicious features in the case and the discrepancies in the evidence adverted to by the trial Court in support of its conclusion that the mortgage, Ex. A4, is not a genuine document transaction, but that it was ante-dated and brought into existence as a result of collusion between the plaintiff and the first defendant who are near relations, having married sisters. Learned counsel also relied upon the notices which passed between the parties and laid considerable stress that when the first defendant in his reply notice. Ex. A-5, stated that sufficient money was reserved with the second defendant to discharge the mortgage debt due to the plaintiff, the plaintiff did not pursue the second defendant and waited for nearly eight years to demand payment of the amount. While I see some force in the points raised by Mr. Shanmugham, the findings of fact, reached by the lower appellate Court have to be accepted as final in view of the provisions of Section 100, C. P. C. The lower appellate Court did have adequate materials and evidence to reach the conclusion it did, and even assuming that this Court may take a different view on the evidence, it is not a ground for interference in second appeal. The result is that the mortgage in favour of the plaintiff is a perfectly true and bona fide transaction and the mortgage deed, Ex. A-4, was executed on 5-12-1953, 23 days prior to the sale deed in favour of the second defendant.

(3.) EVEN so, it is urged on behalf of the second defendant that on the concurrent findings of the courts below that the second defendant is a bona fide purchaser without knowledge of the mortgage. Ex. A-4, (at that time it was not registered), the mortgage though registered subsequently, would not be enforceable against the property purchased by the second defendant. I am unable to agree with the view of the courts below that the second defendant had no knowledge of the mortgage, Ex. A-4. The title deeds are now produced by the plaintiff, his case being that as soon as the mortgage deed. Ex. A-4, was executed, the title deeds were handed over by the first defendant to the plaintiff. On the finding, that the mortgage deed, Ex. A-4, is a perfectly genuine and bona fide transaction, it has to be accepted that the title deeds too were handed over to the main-tiff on the date of Ex. A-4. The second defendant is guilty of gross negligence in not having insisted upon the handing over of the title deeds to her at the lime of the sale deed, Ex. B-4, The fact that she applied for an encumbrance certificate and obtained one which did not disclose the mortgage, Ex. A-4 (as it had not been registered at that time), is not sufficient to hold that the second defendant is a bona fide transferee in good faith and without knowledge of the prior mortgage, ex. A-4, A person who purchases the property ought to insist upon the handing over of the title deeds by the vendor and should not lightly accept any explanation given by the vendor for his not immediately handing over the title deeds, or his oral promise that the title deeds would be handed over later on. The fact that the title deeds were not handed over to the second defendant is a powerful circumstance which should have excited the suspicion of the second defendant and if she had pursued the matter, she would have certainly come to know that the title deeds were handed over to the plaintiff, when Ex, A-4 mortgage was executed by the first defendant. I am clearly of the view that on the facts of the instant case, the second defendant cannot claim to be a bona fide transferee and in good faith as he is guilty of gross negligence in not having insisted upon the handing over of the title deeds to her at the time of her sale deed, Ex. B-4.