# NARANDAS KARSONDAS v. S. A. KAMTAM & ANR

- **Citation:** [1977] 2 S.C.R. 341
- **Court:** Supreme Court of India
- **Decided:** 1976-12-07
- **Case number:** Civil Appeal No. 1020 of 1975
- **Bench:** A. N. Ray, M. H. Beg, Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/narandas-karsondas-v-s-a-kamtam-anr-7042
- **Pages:** 9

## Headnote

Trans/el' of Property Act 1882-Sec. 5, 54 and 69-Meaning of transfcrSale-Power of sale without intervention of Court-Whether extinguishes the
right of redemption-India'< Registration Act 1908-Sec. 17-Whether equity of
redemption can be lost without execution of a registered document-Indian Contract Act 1872-Sec. 202-Power coupled with interest,--Whether can be revoked-After power i;f acted upon-Law of Property Act 1925-Sec. 100(1)(i)-
Distinction between legal ·and equitable estate unde:r English Law-Position under
Indian law:
In 1964, respondent No. 1 Society was registered as a Housing Society. The
Society wanted 12 plots to be constructed for its 12 members.
The Society,
therdore, purchased a plot of land. In 1966, the Society mortgaged the land
and the incomplete structure in favour of respondent No. 2.
In March, 1971,
A
B
c
the Special Liqqidator of the Society was appointed under s. 102 of the Maharashtra Co-operative Societies Act, 1960. The mortgagee after demanding the
D
dues from the mortgagor advertised the public auction for the sale of the pro·
perty. In the auction sale the appellant was declared as the highest bidder. The
auction purchaser took the possession of the land and the incomplete structure.
Society filed a dispute before the Officer on Special Duty under the Maharashtra Co-operative Societies Act against the auction purchaser and (he mortgagee praying for an injunction against the completion of the sale. The Society
in the meanwhile paid the mortgage money to the mortgagc;e. The Officer on
Special Duty delivered his judgment in January 1975 and held that the Society
E
was entitled to redeem the property because the conveyance was not complete.
The appellant filed an appeal before the Maharashtra State Cooprative Appellate
Court. In the appeal, plaint was allowed to be amended and a pryaer tor redemption was allowed to be introduced.
The appellate Court held that there
was no complete sale within the ·meaning of section 69(3) of the Transfer of
·'
Property Act 1882 and the equity of redemption was, thmfore, not lost and that
the auction price was grossly inadequate and that the sale was not after a fair
~
competition.
One of the conditions of auction sale was that if the mortgagor '
F
-
deposited the mortgage money in court between the date of the sale and completion thereof and if as a result thereof the mortgagee was to reconvey the
property to the mortgagor the auction purchaser would be entitled to the refund
of the amount paid without any interest and/ or cost.
I
In an appeal by Special Leave . the appellant contended :
(1) When under s. 69 of the Transfer of Property Act a mortga.[or confers
on the mortgagee a power of sale through court or without intervention of court,
G
the power of sale extends to the entire legal estate of th.e mortgagor.
(2) When such a power is conferred it is agency coupled with interest under
s. 202 of the Indian Contract Act 1872. If the power is acted upon revocation
even on payment of mortgage money cannot nullify acts already done pursuant
to the said powers.
· (3) Knocking down at an auction sale by the mortgagee pursuant to the
power of sale extinguishes the mortgagor's right of redemption.
,
H
( 4) In a suit for specific performance by auction purchaser, the purchaser will
be entitled to specific performance because it is a sale by mortgagor.
Dismissing the appeal,
.A
B
.c
.E
342
~>UPREME COURT REPORTS
(1977] 2 S.C.R.
HELD: (1) Under section 69(1)(c) a mortgagee has power to sell without
intervention of the court where power is conferred by the mortgage deed and
the mortgaged property or any part thereof was on the date of the execution of
the mortgage deed situated in certain big towns. [347D-E]
(2) In India the word "transfer" is defined with reference
to the
word
"convey''.
The word "transfer" in English Jaw in its narrower and more usual
sense refers to the transfer of an estate in the land.
Section 205 of the Law
of Property Act in England defines "conveyance

## Text

341
NARANDAS KARSONDAS
v.
S. A. KAMTAM & ANR.
December 7, 1976
[A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.]
Trans/el' of Property Act 1882-Sec. 5, 54 and 69-Meaning of transfcrSale-Power of sale without intervention of Court-Whether extinguishes the
right of redemption-India'< Registration Act 1908-Sec. 17-Whether equity of
redemption can be lost without execution of a registered document-Indian Contract Act 1872-Sec. 202-Power coupled with interest,--Whether can be revoked-After power i;f acted upon-Law of Property Act 1925-Sec. 100(1)(i)-
Distinction between legal ·and equitable estate unde:r English Law-Position under
Indian law:
In 1964, respondent No. 1 Society was registered as a Housing Society. The
Society wanted 12 plots to be constructed for its 12 members.
The Society,
therdore, purchased a plot of land. In 1966, the Society mortgaged the land
and the incomplete structure in favour of respondent No. 2.
In March, 1971,
A
B
c
the Special Liqqidator of the Society was appointed under s. 102 of the Maharashtra Co-operative Societies Act, 1960. The mortgagee after demanding the
D
dues from the mortgagor advertised the public auction for the sale of the pro·
perty. In the auction sale the appellant was declared as the highest bidder. The
auction purchaser took the possession of the land and the incomplete structure.
Society filed a dispute before the Officer on Special Duty under the Maharashtra Co-operative Societies Act against the auction purchaser and (he mortgagee praying for an injunction against the completion of the sale. The Society
in the meanwhile paid the mortgage money to the mortgagc;e. The Officer on
Special Duty delivered his judgment in January 1975 and held that the Society
E
was entitled to redeem the property because the conveyance was not complete.
The appellant filed an appeal before the Maharashtra State Cooprative Appellate
Court. In the appeal, plaint was allowed to be amended and a pryaer tor redemption was allowed to be introduced.
The appellate Court held that there
was no complete sale within the ·meaning of section 69(3) of the Transfer of
·'
Property Act 1882 and the equity of redemption was, thmfore, not lost and that
the auction price was grossly inadequate and that the sale was not after a fair
~
competition.
One of the conditions of auction sale was that if the mortgagor '
F
-
deposited the mortgage money in court between the date of the sale and completion thereof and if as a result thereof the mortgagee was to reconvey the
property to the mortgagor the auction purchaser would be entitled to the refund
of the amount paid without any interest and/ or cost.
I
In an appeal by Special Leave . the appellant contended :
(1) When under s. 69 of the Transfer of Property Act a mortga.[or confers
on the mortgagee a power of sale through court or without intervention of court,
G
the power of sale extends to the entire legal estate of th.e mortgagor.
(2) When such a power is conferred it is agency coupled with interest under
s. 202 of the Indian Contract Act 1872. If the power is acted upon revocation
even on payment of mortgage money cannot nullify acts already done pursuant
to the said powers.
· (3) Knocking down at an auction sale by the mortgagee pursuant to the
power of sale extinguishes the mortgagor's right of redemption.
,
H
( 4) In a suit for specific performance by auction purchaser, the purchaser will
be entitled to specific performance because it is a sale by mortgagor.
Dismissing the appeal,
.A
B
.c
.E
342
~>UPREME COURT REPORTS
(1977] 2 S.C.R.
HELD: (1) Under section 69(1)(c) a mortgagee has power to sell without
intervention of the court where power is conferred by the mortgage deed and
the mortgaged property or any part thereof was on the date of the execution of
the mortgage deed situated in certain big towns. [347D-E]
(2) In India the word "transfer" is defined with reference
to the
word
"convey''.
The word "transfer" in English Jaw in its narrower and more usual
sense refers to the transfer of an estate in the land.
Section 205 of the Law
of Property Act in England defines "conveyance" as including mortgage, charge,
lease, assent vesting declaration, vesting instrument".
The word "conveys" in
section 5 of the Transfer of Property Act and s. 17 of the Indian Registration
Act is that contract for sale in respect of immovable property of the value of
more than Rs. 100 without registration cannot extinguish the equity of redemption. In India it is only on execution of the conveyance and registration
of
transfer of the mortgagor's interest by registered instrument that mortgagor's
right of redemptiori will be extinguished. The conferment of power to sell without intervention of the Court in a mortgage deed by itself will not deprive the
mortgagor of his right to redemption.
The extinction of the right of redemption has to be subsequent to the deed conferring such power.
The right
of
redemption is not extinguished at the expiry of the period. The equity of redemption is not extinguished by mere contract for sale. [348B, D-E]
Abraham Ezra Issac Mansoor v. Abdul Latif Usman
I.LR.
1944
Bombay
549, approved.
Meenakshi Vein & Ors. v. Kasturi SakuntlzaJa & Ors. I.LR. (1967) 3 Mad.
161, overruled.
Ellappa Naiker a_nd Ors. v. Sivasubramania Manisaran (1936) 71 Madras
Law Journal 607, approved.
(3) Under the English doctrine, a contract of sale transfers an equitable
estate to the purchaser. In India there is no equity or right in property accrued
is favour of the purchaser by the contract between the mortgagee and the proposed purchaser. In India there is no distinction between \j:gal and equitable
estates. In India there can be but one owner i.e. legal owner. [347G-H]
Rani Chhatra Kumari v. Mohan Bikram (1931) 5$ I.A. 279 and Rambaran
Prasad v. Ram Mohit Hazra & Ors. (1967) I SCR 293, followed.
( 4) Under s. 100(1 )(i) of the Law of Property Ac;t, 192~, if a mort~.ageo
exercises power to sell the mortgaged property by publtc auct10n or by pnvate
contract it is binding on the mortgagor before completion of the sale unle!S it
is proved that the power was ·exercised in bad faith. The English decisions are
\
based on the said proTision of the Eaglish Law of Property Act and, therefore,
p they are not applicable to India.
[346 B-D]
lo
Warin~ (Lord) "· London and Manchester Assurance Co. (1935) Chancery 1
310 and Property & Bloodstock Ltd. T. Emerton (1968) L.• R. Cha11cery 94,
di~tinguished.
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1020 of
1975.
(Anneal by Special Leave from the Judgment and Order dated the
18-4-1975 nf the Maharashtra State Co-op. Appellate Court in Appeal
No. 54 of 1975.)
J. L. Nain, U. R. Lalit, and V. N. Ganpule, for the appellant.
V. M. TarkundP, Shnrad Manohar, P. H. Parekh and Miss Mm1ju
H
Jetley, for respondent No. 1.
M. C. Bhrmrlnre,
Mrs. S. Bhandare,
N. S. Narasimhan,
K. C.
Sharma, A. K. Mathur and A. K. Sharma, for respondent No. 2.
NARANDAS KARSONDAS v. S. A. KAMTAM (Ray, C.J.)
343
The Judgment of the Court was delivered by
RAY, C. J.
This appeal by special .leave is from the judgment
dated 18 April 1975 of the Maharashtra State Co-operative Appellate
Court.
A
The question for consideration in this appeal is whether a mortgagor can exercise his right of redemption after a mortgagee under an
English Mortgage with power to sell mortgaged property without the
B
intervention of the court gives notice to the mortgagor . to sel! the
mortgaged property by public auction and sells it by publrc auctwn.
The appellant is the auCtion purchaser. The respondents
are
Flora Co-operative Housing Society in liquidation the
mortgagors
(hereinafter ref~rred to as the Society) and the Maharashtr_a Cooperative Housing Finance Society Ltd., the mortgagee (heremafter
referred to as the mortgagee) .
In 1964 the Society was registered as a Housing Society with 12
members. The paid up capital of the Society was
Rs.
21,000/-.
The Society wanted 12 fiats to be constructed in one
structure of
ground and two upper floors.
The Society purchased plot No. 153 in
Sarita Cruz at Bombay, measuring 1002 sq. yards. The price was
Rs. 1,02,000/-.
In 1966 the Society mortgaged the land and . the incomplete
structure in favour of the mortgagee.
The mortgage was for the sum
of Rs. 70,000/-. It was an English mortgage.
In 1968 the mortgagee advanced a further sum of Rs. 42,000/-.
c
D
In 1966 Fair Deal Builders entered into a contract with Society
E
to build.
The work was stopped.
Thereafter in 1967 the Society
entrusted the work to Maharaja Builders. In 1968 the contract with
Maharaja Builders was terminated. · The work was given in 1969 to
Kamal Construction Company, who abandoned it in incomplete stage.
On diverse dates between 29 Au.gust 1967 and 29 November ·1970,
notice was given by the mortgagee to the Society for non-payment to
the mortgagor and to sell the property by public auction.
On 9 March 1971 the Assistant
Registrar
of ·Co-operative
Societies, Maharashtra, appointed a Special Liquidator of the Society
under section 102 of Maharashtra Co-operative Societies Act, 1960.
The Assistant Registrar co=unicated the order of appointment of
liquidator te the mortgagee on 22 April 1971. The order of appointment of a liquidator was
published in Maharashtra Government
Gazette on 29 April 1971.
The mortgagee
advertised
through
Government
imctioner
for public auction of the property.
The public auction was held on
14 April 1971. The claim was for Rs.
1,22,888.22 paise.
The
appellant was declared the highest bidder for Rs. 1,31,001/-. The
terms of sale inter alia were that 25 per cent was to be paid in advance
and the balance in 30 days. The sum of Rs. 33,000/- was paid as
6-1546 SCI/76
G
H
344
SUPREME COUlU REPORTS
(1977] 2 S.C.R.
25 per cent advance and the balance purchase price of Rs. 98,00lt'-
A
was paid to attorneys of the mortgagee.
The auction purchaser took
possession on 17 April 1971.
On 13 August 1971 the Society filed a dispute before the Officer
on Special Duty under the Maharashtra Co-cperative Societies Act
against the auction purchaser and the mortgagee for injunction agains:
completing sale.
The Society obtained an ex-parte
injunction resB
training transfer.
On 29 September 1971, the interim injunction was
vacated.
c
Thereafter the Society filed an appeal against the said order before
the Appellate Tribunal.
In the meantime the appellant filed a writ petition in the Bombay
High Court under Article 227 of the Constitution.
On 16 June 1972 there was an interim order by the High Court
in the writ petition.
The Society undertook
not
to
dispese
of
property until disposal of dispute.
Both parties were
allowed
to
keep watchmen.
The Society borrowed a sum of Rs. 1,31,000/- and paid
the
D
same to the mortgagee on 15 October 1972.
E
F
G
On 16 January 1975 the Officer on Special Duty delivered
judgment.
He held that the dispute was maintainable under section
91 of the Maharashtra Co-operative Societies Act.
The Society was
held not competent to challenge the auotion sale held on 14 April
1971. It was also held that tli.e validity of auction was not affected.
The mortgagee was held entitled to exercise power of sale as a secured
creditor without being affected by the winding up order against the
Society. It was also held that the mortgagee did not commit any
breach of the statutory provisions of section 69 of the Transfer of
Property Act.
The sale was not vitiated. It was found that there
was no irregularity at the auction and there is no ground for settin:
aside the sale.
The socie.ty was entitled to
redeem
the property
because the conveyance was not complete.
The auction purchaser filed before the Maharashtra State Cooperative Appellate Court an appeal a~ainst the said order. In appeal
the plaint was allowed to be amended and prayer for
redemption
was allowed to be introduced.
On 18 April 1975 the Maharashtra
State Cooperative Appellate Court dismissed the appeal and held that
the dispute as initiated bv the Society fell within the ambit of section
97 of the Maharashtra Cooperative Societies
Act.
The
Appellate
Court further held that there was no complete sale within the me11nin3
of section 69(3) of the Transfer of Property Act and the equity of
redemption was therefore not lost. It was further held that the
auction price was gros<lv inadequate.
The auction sale was not a
sale after a fair competition.
ff
The Mort2age Deed provided inter alia as follow11 :-
NARANDAS KARSONDAS V. S. A. KAMTAM (Ray, C.J.)
345
;'It is hereby agreed and declared that it shall be lawful
A
for the mortgagees at any time without any further consent
on the part of the mortgagors to sell the said mortgaged
premises ........ The aforesaid power shall be deemed te
be a power to sell or concur in selling the said mortga~ed
premises in default of payment of the mortgage money without the intervention of the court within the meaning of sec- ·
tion 69 of the Transfer of Property Act."
B
Clauses (7), (8) and (33) in the Conditions of Sale may be
referred to.
Clause (7) provided as follows.
Upon payment of the balance
of the purchase price, the purchaser shall be entitled to a conveyance
from the vendors.
The vendors shall in the conveyance
of
the
property purchased by purchaser give the usual covenant required of
a limited owner against encumbrances.
The vendors shall give no
other covenant required of an absolute of foll owner.
The vendors
shall not be required to procure the consent of the mortgagors or of
.any other person in the conveyance.
Clause (8) was as follows.
After payment of the balance of the
purchase money the purchaser shall be entitled to the rents and profits
-0f the said property.
The vendors as the mortgagees
are not
in
possession of the property and will not do anything to deliver
possession of the property to the purchaser.
The vendors as
the
mortgagees shall not be able to give vacant or symbolic possession of
the property to the purchaser.
On payment of the balance of
the
purchase price the purchaser shall at his own cost be at liberty to
take such steps as the purchaser may deem necessary for obtainin:
possession of the property from the mortgagors.
Clause (33) provided as
follows. If thi mortgagors
shall
·deposit all the amounts due to the vendors as mortgagees in court or
pay the same to the vendors or their attorneys between the date of
sale and the completion thereof and if ail a result thereof the vendors
have to reconvey the property to them or if the vendors cannot thus
proceed with the sale and the sale is not completed on that account
the vendors shall return the said deposit to the purchaser without
.any interest and/ or costs and the vendors as such mortgagees shall
.11.ot be held liable for any damage.
Counsel for the appellant advanced these contentions.
First,
'blllder section 69 of the Transfer of Property Act a mortgagor confers
on the mortgagee a power of sale through Court or without intervention of court.
The power of sale is of the entire legal estate of
the mortgagor.
Second, when such a power is conferred it is agency
coupled with interest under section 202 of the Indian Contract Act,
the agency cannot be
revoked
without
payment to
mortga~ee.
Third, if the power is acted upon revocation even on payment cannot
•ullify acts pursuant to powers. Reliance was placea on sections
203 and 204 of the Jnciian Contract Act.
Fourth, if the act done
j)Ursuant to power is that the property is put up for sale ancf it 11
1aiocked down it is an act done by the mortgagu for mertgagor
Ia
c
E
F
G
A
B
c
D
E
F
G
H
346
SUPREME COURT REPORTS
[1977] 2 S.C.R.
other words it is as if an act done by the mortgagor.
The. sale
pursuant to the power is a subsequent act within the meaning of
Transfer of Property Act and this subsequent act will extinguish the
mortgagor's right of redemption.
Fifth, in a suit for specific perfor·
mance by auction purchaser the purchaser will be entitled to specific
performance because it is a sale by mortgagor.
Counsel for the appellant relied on two English decisions.
These
are : Waring (Lord) v. London and Manchester Assurance Co.('),
and Property & Bloodstock Ltd. v. Emerton( 2 ) in support of the propositions that the mortgagor's right to redemption would be extinguished when the mortgagee exercised the power of sale and the third party
entered mto a binding contract to purchase the property.
The English decisions are based on the provisions of the English
Law of Property Act.
The provisions create a statutory power of sale,
which gives to a mortgagee power to sell the mortgaged property, and
it means that the mortgagee has power to sell out and out by private
contract or by auction, and subsequently to complete the conveyance.
The English decisions are that if a mortgagee exercises power under
section 100(1) (i) of the Law of Property Act, 1925, to sell
the
mortgaged property by public auction or by private contract it
is
binding on the mortgagor before completion unless it is proved that
he exercised it in bad faith.
It was said in the Property & Bloodstock case (supra)
that the
contract for sale by the mortgagees to the purchaser precludes the
mortgagor from his right of redemption pending completion even if
the property is sold subject to one or more conditions.
The English
decision naturally notices distinction between condition precedent and
the terms of contracts of sale, namely, conditions dealing with matters
of title for carrying out the contract.
The mere fact that the hibel
"condition" happens to be attached to conditions does not preclude
its being in the latter category of "condition" or matter of title.
The
condition that the sale is subject to the reversioner's licence being
obtained where necessary is held in the
English
decision
to
be
commonly regarded as no more than a term of the contract relating
to title.
The provisions in the Transfer of Property Act relevant to the
purpose of present appeal are sections 54, 60 and 69.
Under section
54 of the Transfer of Property Act, sale is a transfer of ownership in
exchange for a price paid or promised or part-paid and part-promised.
Such transfer in the case of tangible immovable property
of the value of one hundred rupees and upwards, or in the case of a
reversion or other intangible thing can be made only by a registered
instrument.
A contract for the sale of immovable property is
a
contract that a sale of such property shall take place on terms settled
between the parties.
An English Mortgage is defined in section 58(e) of the Transfer
of Property Act.
Where the mortgagor binds himself to repay the
mort.t!age-money on a certain date, and transfers the mortgaged pro-
(l) (1935) Chancery 310.
(2) (1968) L.R. Chancery 94.
) .
NARANDAS KARSONDAS V. S. A. KAMTAM (Ray, C.J.)
347
perty absolutely to the mortgagee, but subject to a proviso that he
will retransfer it to the mortgagor upon payment of the mortgagemoney as agreed, the transaction is called an English mortgage.
The Rights and Liabilities of Mortgagor are dealt with in section
60 of the Transfer of Property Act. It is that at any time .after the
principal money has become due, the mortgagor has a nght, on
payment or tender, at a proper time and place, of the mortgagemoney, to require the mortgagee (a) to deliver to the mortgagor the
mortgage-deed and all documents relating to the mortgaged property
which are in the possession or power of the mortgagee, (b) where
the mortgagee is in possession of the mortgaged property to deliver
possession thereof to the mortgagor and ( c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such
third person as he may direct, or to execute and to have registered
an acknowledgement in writing that any right in derogation of his
interest transferred to the mortgagee has been extinguished. There
is a proviso that the right conferred by this · section has not been
·extinguished by the act of the parties-or by decree of a Court. The
right conferred by section 60 of the Transfer of Property Act is called
a right to redeem.
Therefore, the said section 60 prov~des for
a
right of redemption provided that the right has not been extinguished
by the act of parties.
A
B
c
D
Section 69 of the Transfer of Property Act deals with mortgagees'
power of sale.
Under the said section 69 (1) ( c), a mortgagee has
power of sale without the intervention of the Court where power is
conferred by the mortgage deed and the mortgaged property or any
part thereof was on the date of the execution of the mortgage deed,
situate within the towns of Calcutta, Madras, Bombay or in any other
E
town or area which the State Government, may, by notification in the
·official Gazette, specify.
The principal question in this appeal is whether the
right
to
redemption has been extinguished by any act of the parties.
The
English decisions are based on the provisions of the Law of Property
Act, 1925. In England sale is effected by the contract of sale, and
F
in India an agreement for sale is not a sale or transfer of interest.
In
England, a mortgagee gets an equitable interest in the
property.
Under the English doctrine a contract of sale transfers an equitable
estat~ to t~e purchaser. The Court does not assist the mortgagor by
granting !um a remedy unless there is collusion on the part of the
mortgagee.
In b.dia there is no equity or right in property created in favour
G
of the purchaser by the contract between the mortgagee
and
the
proposed purchaser.
In India, there is no distinction between legal
and equitable estates. The law of India knows
nothing of that
distinction between legal and equitable property in the sense in which
it was understood when equity was administered by the Court
of
Chancery in England. Under the Indian law, there can be but one
owner that is, the legal owner.
See Rani Chhatra Kumari v. Mohan
H
Bikram(').
·
(1) (1931) 5~ T.A. 279.
.A
B
c
D
E
F
G
H
348
SUl'REME COURT REPORTS
[1977] 2 S.C.R.
A contract of sale does not of itself create any interest in, or chargs
'1n, the property.
This is expressly declared in s. 54 of the Transfer
o( Property Act.
See Rambaran Prasad v. Ram Mohit Hazra(') &:
Ors.(')
The fiduciary character of the personal obligation createa
by a contract for sale is r~ognised in section 3 of the Specific Relief
Act, 1963 and in section 91 of the Trusts Act.
The personal obli-
~ation created by a contract of sale is described in section 40 of the
Transfer of Property Act as an obligation arising out of contract and
annexed to the ownership of property, but not amounting to an interest
er casement therein.
In India, the word "transfer" is defined with reference to the word
"convey".
The word "transfer" in English law in its narrower
and
more usual sense reyers to the transfer: of an estate in land.
Section
205 of the Law of Property Act in England defines : "Conveyance"
includes a mortgage, charge, lease, assent, vesting declaration, vesting
instrument.
The word "conveys" in section 5 of the transfer of Prol"erty Act is used in the wider sense of conveying ownership.
The right of redemption which is embodied in section 60 of the
Transfer of Properly Act is available to the Mortgagor unless it has been
extinguished by the Act of parties.
The combined effect of section
54 of the Transfer of Property Act and section 17 of the Indian Registraiion Act is that a contract for sale in respect of immovable property
of the value of more than one hundred rupees without registration cannot
extinguish the equity of redemption.
In India it is only on execution
of the conveyance and registration of transfer of the mortgagor's interest
by registered instrument that the mortgagor's right of redemption will
be extinguished.
The conferment of power to sell without intervention
of the Court in a Mortgage Deed by itself will not deprive the mortgagor'
of his right to redemption.
The extinction of the right of redemption
has to be subsequent to the deed conferring such power. The right of
redemption is not extinguished at the expiry of the period.
The equity
of redemption is not extinguished by mere contract for sale.
The mortgagor's right to redeern will survive until there has been
completion of sale by the mortagee by a registered deed. In England
a sale of property takes place by agreement but it is not so in our
country.
The power to sell shall not be exercised unless and until
notice in writing requiring payment of the principal money has been
served on the mortgagor.
Further section 69(3) of the Transfer of
Property Act shows that when a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale. Therefore, until the sale is complete by registration the morgagor does not
losa right of redemption.
It is erroneous to suggest that the mortgagee is acting as the agent
of the mortgagor in selling the property.
The mortgagor exercises his
right unde:t'I a different claim.
The mortgagee's right is different from
(I) [1967] 1 S.C.R. 293.
\
>
NARANDAS KARSONDAS V. S. A. KAMTAM (Ray; C.J.)
349
the :mortgagor's.
The mortgagee exercises his right under a totally
superior claim which is not under the mortgagor, but against him.
In
ether words, the sale is against the mortgagor's wishes.
Rights and
interests of the mortgagor and the mortgagee in regard to sale are
i:onfiidini:.
In view of the fact that only on execution of conveyance, ownership
pas~e~ from one party to another it cannot be held that the mortgagor
lost the right of redemption just because the property was put to auction.
The mortgagor has a right to redeem unless the sale of the property was
complete by registration in accordance with the provisions of the Registration Act.
Tht decision in Abraham Ezra Issac Mansoor v. Abdul
Latiff
Usman(') is correct law that the right to redeem a mortgage given to
a mortgagor under section 60 of the Transfer of Property Act, is not
extinguished by a contract of sale of the mortgaged property entered
into by a mortgagee in exercise of the; power of sale given to him
under the mortgage deed. Until the, sale is completed by a registered
instrument, the mortgagor can redeem the mortgage on payment of the
requisit~ amount.
The Madras decision reported in Meenakshi Velu & Ors. v. Kasturi
Sakunthala & Ors. (2 ) on which counsel for the appellant relied is
contrary to the view expressed in Ellappa Naiker and others v. Sivasubramanio Maniagaran,( 3 ) and the aforesaid Bombay decision.
We arc entirely in agreement with the Bombay decision.
The
A
B
c
D
Madras decision Meenakshi Velu & Ors. v. Kasturi Sakunthala & Ors.(')
E
which holds a contrary view on which counsel for the appellant relied is
wrong.
Fo£ the foregoing reasons,
the appeal is dismissed with costs to
re,po1o1dent no 1.
P.H.P.
Appeal dismissed.
{I) l.L.R. (1944) Born. 549.
(2) LLR. (lC.67) 3 Mcdn.s 161.
(3) (1936) 71 Madras lr.w Journal 607.