ROSHAN DINSHAW KARAI Vs. SANGITA L MANKANI

JUDGEMENT

(1.) THE plaintiffs have filed the present suit. It is the case of the plaintiffs that original defendant No. 1 since expired and defendant No. 2 approached them for a loan which the plaintiffs agreed to advance on the condition that as a security, the defendants should create a mortgage. Accordingly, the plaintiffs advanced a sum of Rs. 80,000/- by cheque in favour of defendant No. 3. The amount was to carry interest at 14% per annum compounded in the case of default of payment of interest which was to be payable monthly. The case of the plaintiffs is that on 23-2-1979 the defendants deposited with the plaintiffs the title deeds of the property with an intent to create an equitable mortgage. By an indenture of mortgage dated 23-2-1979, the property was mortgaged by the defendants in favour of the plaintiffs. The defendants agreed to pay a sum of Rs. 80,000/- on 22-2-1980. He further agreed to pay interest on the said sum of Rs. 80,000/- at the rate of 14% per annum free from income-tax by equal monthly payments on conditions stipulated therein. It was agreed that on failure to pay any instalment of interest, unpaid instalment of interest would be added to the mortgage debt. In other words, the interest could be compounded. The case of the plaintiffs is that interest was paid at the rate of 14% per annum upto 22-12-1979 (wrongly typed as 1970 ). By letter of 10-3-1980, the Advocate on behalf of the plaintiffs recorded that the defendants had committed default in payment of interest and that the due date for payment of the mortgage amount had expired on 22-2-1980. Under the circumstances, the case of the plaintiffs is that by their Advocates notice, they called upon the defendants to pay the said amount of Rs. 80,000/- with interest thereon at the rate of 14% per annum from 23-12-1979 till payment. It is the case of the plaintiffs that after receipt of the said letter, original defendant No. 1 approached the plaintiffs that due date for repayment of the mortgage amount be extended by a further period of one year i. e. upto 22-2-1981. It is contended on behalf of the plaintiffs that they informed original defendant No. 1 that they would be agreeable to extend the due date by a further period of one year i. e. upto 22-2-1981 provided the defendants agreed to pay interest at the rate of 15% per annum instead of 14%. The case of the plaintiffs is that the defendants agreed to the same and paid interest upto 22-2-1980 at the rate of 14% per annum and interest for the period 23-2-1980 to 22-5-1980 at the rate of 15% per annum. It is the further case of the plaintiffs that their Advocate prepared an agreement for extension of the due date and requested the plaintiffs to sign the same. The defendants failed to attend and sign the agreement. The extended due date for repayment of the mortgage expired on 22-2-1981. By the Advocates notice dated 2-4-1981, defendant Nos. 1 and 2 were informed that they had agreed to pay interest at the enhanced rate of 15% instead of 14% and a demand was made that the defendants pay the principal amount of Rs. 80,000/- together with interest thereon at the rate of 15% per annum from 23-5-1980, failing which they had instructions to proceed in the matter. Again by a subsequent notice of 1-10-1981 interest was demanded on the principal amount at the enhanced rate of 15% per annum. On failure, the present suit.

(2.) DURING the pendency of the suit, original defendant No. 1 expired and his legal heirs have been brought on record.

(3.) WRITTEN statement was filed on behalf of defendant Nos. 1 and 3. A preliminary objection was raised that the deed of mortgage is not registered as required under the provisions of the Indian Registration Act and on this count alone, the suit is liable to be dismissed. It is the case of the defendants that there was an agreement whereby defendant No. 1 had agreed to purchase two buildings from one Mrs. Goolbai Kavarana, mother of the 1st plaintiff and mother-in-law of the 2nd plaintiff. There are other averments which I need not advert to. For reasons disclosed in para 4 of the plaint, it is contended that a sum of Rs. 80,000/- could be retained by the defendants for fulfilment of the obligations by Goolbai. It is averred that for tax purposes, the plaintiffs suggested that the plaintiffs would pay Rs. 80,000/- to the defendants and the defendants will execute the purported mortgage deed in favour of the plaintiffs and when Goolbai complies with the requirements, the said sum of Rs. 80,000/- will be returned. There are some other averments which I need not advert to in view of what has transpired at the bar at the hearing of the suit.