TUKARAM RAMEHANDRA MANE Vs. RAJARAM BAPU LAKULE

JUDGEMENT

(1.) INTRODUCTORY paragraph - The above two Writ Petitions arise out of cognate proceedings between the same parties. Decision on Writ Petition No. 3438 of 1980 will obviate the decision on Special Civil Application No. 1284 of 1978 more or less completely. However, we are stating facts relating to both the Writ Petitions which are, more or less, common.

(2.) FACTS relating to both the petitions - Petitioner No. 1 in Special Civil Application No. 1284 of 1978 (who will be referred to hereinafter as "the mortgagor") is, admittedly, the original owner of the suit property which is C. T. S. No. 926, Peth Bhag, Sangli. On 22nd January 1962, he executed a document purporting to be a mortgage by conditional sale (Exhibit 41) of the suit property in favour of the petitioner in Writ Petition No. 3438 of 1980. (He will be referred to hereinafter as "the mortgagee" ). The mortgage was for a sum of Rs. 7,500/- and it was to be repaid within 5 years after which repayment the property was to be reconveyed to the mortgagor. The document contains a recital that the possession was handed over by the mortgagor to the mortgagee; but, as will be presently pointed out, it is more or less common ground that it is the mortgagor who is in possession of the suit property even as on this date. On 8th January 1963, the mortgagor executed another document, this one purporting to be a sale deed (Ex. 42) in respect of the same property for the total sum of Rs. 8,000/ -. Consideration for this sale deed included the earlier amount of loan of Rs. 7,500/- which was to be adjusted towards the price of the property and the additional amount of Rs. 500/- was shown as paid in cash. It is, more or less, an undisputed fact that, at the time of these two transactions, the mortgagor was heavily indebted. As has been held by the Courts of competent jurisdiction later on, the above sale deed, Ex. 42, was a sham transaction entered into by the parties with a view to defraud the creditor. On 9th April 1963, therefore, the mortgagee's creditors filed Insolvency Application No. 5 of 1963 for getting the mortgagor adjudicated as an insolvent. Not only this, but even the mortgagor filed Insolvency Application No. 7 of 1964, the very next year, for himself being adjudicated as an insolvent. This was filed on 4th December 1964. As a result of these two proceedings, the mortgagor was adjudicated as an insolvent by the Court's order dated 8th January 1965 and one Shri K. R. Gandhi, Advocate, was appointed as the Receiver in respect of the property belonging to the insolvent. In 1965, the Receiver filed an application to the Insolvency Court for a declaration that the sale-deed, Ex. 42, dated 8th January 1963 in favour of the mortgagee was a sham document and, as such, was null and void. Evidence was led by parties, and the Insolvency Court did give such declaration in favour of the Receiver (in a sense, in favour of the body of creditors) holding that the sale deed, Ex. 42, was a sham transaction; that it was not the result of passing of any valuable consideration to the insolvent at all; that it was the result of collusion between the mortgagor and the mortgagee; that possession of the property was never received by the mortgagee and that the entire document and transaction were null and void. A plea was sought to be agitated before the Court that petitioner No. 2 in Special Civil Application No. 1284 of 1978 who is the brother-in-law of the mortgagor, petitioner No. 1 in that petition, was the tenant of the mortgagee and was in possession in that character. That plea was also rejected by the Court. This order was passed on 26th August 1968. The Appeal against the said order, Misc. Civil Appeal No. 50 of 1968, was dismissed by the learned Extra Assistant Judge, Sangli. The finding recorded by the trial Court, therefore, stood confirmed.

(3.) STATEMENT of facts contd.- This takes us to the statement of facts in relation to the other Special Civil Application, viz. , Special Civil Application No. 1284 of 1978. On 18th November 1968, the mortgagee sent a notice to the brother-in-law of the mortgagor Padmakar Daulatrao Chivate (petitioner No. 2 in Special Civil Application No. 1284 of 1978) alleging that - (a) he was the tenant of the mortgagee and (b) he was in arrears of rent for a period exceeding 6 months. The addressee of the notice was called upon to pay the arrears of rent within one month. It has been the consistent contention of both the mortgagor as well as his brother-in-law Chivate that Chivate was never the tenant of the mortgagee and that the possession of the property was never handed over by the mortgagor to the mortgagee or by the mortgagee to Chivate. Naturally, therefore, Chivate did not pay any rent to the mortgagee. The mortgagee, therefore, filed Civil Suit No. 61 of 1969 in the Court of Joint Civil Judge, Senior Division, Sangli, on 2nd April 1969. Chivate, brother-in-law, of the mortgagor, was defendant No. 1 in that suit. The allegation made against him was that he had taken the suit property on rent from the mortgagee and that he was in arrears of rent for a period exceeding 6 months. Possession was, therefore, demanded from said Chivate. But, in the plaint, an averment was also made that the mortgagee (Sic) was in possession of the suit property; meaning thereby not Chivate, the alleged tenant of the mortgagee, but the mortgagor himself was in possession of the suit premises. Written statement was filed by both the defendants, the mortgagor-defendant No. 2 and his brother-in-lawdefendant No. 1. Their defence was common. Both of them denied the tenancy of Chivate. Both of them contended that the mortgagor himself was all along in possession of the suit property. In addition to the above, they raised two further contentions - (a) that the mortgage stood quashed and extinguished and the mortgagee's right had come to an end by virtue of the order dated 26th August 1968 passed by the Insolvency Court, and (b) that leave of the Insolvency Court was necessary in the present case because the property had vested in the Receiver and that, without the leave of the Insolvency Court, the suit was not maintainable. In pursuance of these pleadings in said Civil Suit No. 81 of 1969, the trial Court framed two preliminary issues, firstly on the question whether the suit was maintainable in the absence of leave from the Insolvency Court and, secondly, on the question as to whether the deed of mortgage stood extinguished resulting in disentitling the mortgagee from claiming possession. The findings were recorded on both the issues by the trial Court against the mortgagor. Against the findings on the two preliminary issues, Special Civil Application No. 2784 of 1980 was filed by the mortgagor and his brother-in-law; but these findings were confirmed by this Court (V. S. Deshpande, J. ). This Court held that what was set aside by the Insolvency Court was the sale-deed, Ex. 42, and not the document of mortgage, Ex. 41. This Court also held that the leave from the Insolvency Court was not necessary for a mortgagee in possession in a suit for possession from his own tenant. This order is dated 13th March 1975. In 1976, the mortgagor filed Civil Suit No. 626 of 1976 for redemption of the mortgage, Ex. 41. In that suit, it is specifically contended that the subsequent sale-deed, Ex. 42, was a sham and bogus document, implying thereby that it was never intended to be acted upon. We are informed that the redemption suit is still pending. It is mentioned above that this Court (V. S. Deshpande J.) had confirmed the finding of the trial Court on the two preliminary issues in the mortgagee's suit No. 81 of 1969. After the said decision, the trial Court proceeded with the said suit and passed the decree for possession of the same in favour of the mortgagee. Evidently, the decree was, in substance, against the mortgagor because, as per the uniform contention of all the three parties, it was the mortgagor who was, in possession of the suit property on the date of that suit as also on the date of decree in that suit.