Allotment letter is title deed for EM.

Punjab-Haryana High CourtSmt. Inderjit Kaur vs State Bank Of India on 11 August, 2009

**** This appeal, is directed, against the judgement and decree, dated 12.06.95, rendered by the Court of Additional Senior Sub Judge Kharar, vide which, it decreed the suit of the plaintiff, and the judgement and decree dated 15.06.07, rendered by the Court of Additional District Judge, Rupnagar, vide which, it dismissed the appeal.

2. The facts, in brief, are that on 02.02.1990, the plaintiff bank, on the request of Narinder Singh, defendant No. 2, sole proprietor of M/s R.S. Industries, granted three facilities i.e. cash credit (factory type), to the extent of Rs. 4,50,000/-, cash credit (bills), to the extent of Rs. 4,50,000/-, and medium term loan, to the tune of Rs. 1.89 lacs, total amounting to Rs. 10,89,000/- to him. Manjit Singh, defendant No. 3 and Inderjit Kaur, defendant No. 4, stood guarantors to ensure repayment of the aforesaid loan alongwith interest to the plaintiff bank. Inderjit Kaur, appellant, equitably mortgaged house No. HE 1007, Phase-I, SAS Nagar (Mohali) by depositing the title deeds thereof, with the plaintiff bank. The rate of interest was agreed @ 19.75% per annum, with quarterly rests, regarding the cash credit limit and the rate of interest for the medium term loan was agreed @ 16% per annum with quarterly rests. The defendants, committed default in repayment of the loan amount. They were requested many a time, to repay the aforesaid loan amount, but to no avail. Ultimately, a suit for recovery, was filed.

3. The defendants, put in appearance, and filed written statement, wherein, they took up various objections, and contested the suit. It was stated by Inderjit Kaur, defendant No. 4, that Manjit Singh, defendant No. 3, her son-in-law, took the papers of the house, in question, from her, on the ground that he was going to get the cancellation thereof, revoked, as a result whereof, her signatures, were obtained, on the pretext that the same were required for the aforesaid purpose. It was denied that she was the guarantor of the transaction, with regard to the loan amount, in question. The remaining averments, were denied, being wrong.

4. On the pleadings of the parties, the following issues were struck:-

(i) Whether the plaintiff is entitled to recover a sum of Rs. 7,59,866.55/-, from the defendants alongwith interest and if so at what rate and for what period? OPP

(ii) Whether suit against defendant No. 3, is not maintainable? OPD

(iii) Whether suit has not been properly valued for the purpose of Court fee and jurisdiction? OPD

(iv) Whether any contract of guarantee was entered into between the plaintiff and defendant No. 3? If so, its effect to parties (iv-a)Whether the mortgage done in respect of the H. No. HE 1007, Ground Floor, Phase) I, SAS Nagar, Mohali, is the result of fraud as alleged? OPD

(v) Relief.

5. After hearing the Counsel for the parties, and, on going through the record of the case, the trial Court, decreed the suit of the plaintiff.

6. Feeling aggrieved, an appeal was preferred, by Inderjit Kaur defendant/appellant, which was dismissed, by the Court of Additional District Judge, Rupnagar, vide judgement and decree dated 15.06.07.

7. Still feeling dissatisfied, the instant Regular Second Appeal, has been filed by the defendant/appellant.

8. I have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully.

9. The following substantial questions of law, arise in this appeal, for the determination of this Court:-

(i) Whether the Courts below recorded perverse finding, on misreading and misappreciation of evidence that the allotment letter submitted by Inderjit Kaur, for creating equitable mortgage, by way of collateral security, for the repayment of loan, was a title deed?

(ii) Whether the Courts below, recorded a perverse finding, on account of misreading and misappreciation of evidence that Inderjit Kaur, was liable to pay the amount, due to the bank?

10. The Counsel for the appellant, submitted that the allotment letter of the house, which was submitted by Inderjit Kaur, before the bank authorities for creation of equitable mortgage, by way of collateral security, did not fall within the purview of title deed. He further submitted that, as such, no equitable mortgage, was created by Inderjit Kaur, in favour of the bank. He further submitted that, even this allotment, had already been cancelled. He further submitted that the Courts below, recorded perverse findings, in holding that the allotment letter, submitted by Inderjit Kaur, constituted a title deed, and was sufficient to create equitable mortgage, by way of collateral security, for the repayment of loan, granted by the bank, in favour of Narinder Singh, proprietor of M/s R.S. Industries. He further submitted that the Courts below, also recorded perverse findings, on account of misreading and misappreciation of evidence that Inderjit Kaur, was liable to repay the amount, due to the bank, on the basis of collateral security. He further submitted that the judgements and decrees of the Courts below, being illegal, were liable to be set aside.

11. The Counsel for respondent No. 1, however, submitted that the allotment letter exhibit P22, issued by the Housing Commissioner, Punjab Housing Development Board, in respect of H. No. 1007, Ground Floor, Phase-I, Mohali, in favour of Mohinder Singh, C/o M/s Madhukar Motor, submitted by Inderjit Kaur, on the basis of power of attorney, which was given to her for sale, mortgage etc. of the property, in question, for creating equitable mortgage, constituted the title deed. He further submitted that even affidavit copy whereof is P25, was sworn by Inderjit Kaur, that the property, in dispute, was free from encumbrances. He further submitted that even affidavit, copy whereof is P30, was sworn by Narinder Singh, that he made payment of the sale consideration and the property was without encumbrances. He further submitted that since the allotment letter was deposited with an intention to create mortgage, the appellant, was estopped from denying the same. He further submitted that the judgements and decrees of the Courts below, being legal and valid, were liable to be upheld.

12. After giving my thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, in my considered opinion, the appeal deserves to be dismissed, for the reasons to be recorded, hereinafter. It it settled principle of law, that the scope for interference, in Regular Second Appeal is very limited. This Court, can interfere into the concurrent findings of fact of the Courts below, only, if it comes to the conclusion, that the same were perverse, on account of misreading or misappreciation of evidence. Even if, the concurrent findings of fact, recorded by the Courts below, are grossly erroneous, this Court, cannot interfere into the same, in the Regular Second Appeal. P22 is the copy of the allotment letter of H. No. 1007, Ground Floor, Phase-I, Mohali, in favour of Mohinder Singh, C/o M/s Madhukar Motor, SCF No. 39, Sector 21-C, Chandigarh. Mohinder Singh, executed power of attorney, copy whereof is P23, in favour of Inderjit Kaur, appellant. Vide this power of attorney, Inderjit Kaur, was given full authority by Mohinder Singh, the allottee of the house, to sell, mortgage, gift, or transfer the same. P25 is copy of the affidavit, which was sworn by Inderjit Kaur. According to this affidavit, the house, in question, was originally allotted to one Mohinder Singh, by the Punjab Housing Development Board, vide its letter dated 22.02.75, and he executed the power of attorney, in her favour, which was registered in the office of Sub-Registrar, U.T. Chandigarh, vide which, she was competent to gift, mortgage, or transfer the suit property. It was further stated, in this affidavit, that the deponent with the intention of creating equitable mortgage, as collateral security, was depositing the original title deeds of the said property, in favour of State Bank of India, SAS Nagar, Mohali. When all these documents, were presented, before the bank, with an intention to create equitable mortgage by Inderjit Kaur, she was estopped from taking the plea, that the allotment letter, copy whereof is P22, did not constitute the title deed. It was, on the basis of this allotment letter, that Mohinder Singh, became the owner/allottee of the house, in dispute. It was, on the basis of the power of attorney, referred to above, executed in favour of Inderjit Kaur, by Mohinder Singh, that she became entitled to mortgage, sell, or dispose of the house, in dispute, in any manner. When there was an intention, on the part of Inderjit Kaur, to create equitable mortgage, on the basis of the allotment letter, which according to her was the title deed, and was, in fact, the title deed, it could not be said that equitable mortgage, could not be created, on the basis of the said document. The first Appellate Court, was, thus, right in coming to the conclusion that, in these circumstances, the provisions of Section 115 of the Indian Evidence Act, 1872, came into play and estopped the appellant, from claiming that the allotment letter could not be deemed to be the document of title.

13. No doubt, the Counsel for the appellant, placed reliance, on case titled as Punjab & Sind Bank Limited, Lyallpur Vs. Gurdit Singh and others, AIR 1935, Lahore, 957, to contend that the allotment letter, did not constitute the title deed and no equitable mortgage could be created on the basis thereof. In that case, one of the documents, deposited with the bank was a certificate that certain sums of money were paid, on two occasions, in the Imperial Bank by Gurdit Singh, as purchase price of a site in Lyallpur. There was no description of the site, and it was observed that though the appellants called these documents as a receipt, it was not really a receipt, but a certificate issued by the Treasury Officer, apparently at the request of Gurdit Singh on a subsequent date, certifying the fact of previous payments of money by him in the Imperial Bank. The other documents, for the purpose of creation of equitable mortgage, produced by the appellants, were jamabandi entries and the copy of the mutation entry. It was held by the Lahore High Court, that neither these documents individually nor collectively, could be described to be the documents of title, and, consequently, no equitable mortgage could be created, on the strength thereof. It is settled principle of law, that jamabandi, is no substitute for title. The facts of the aforesaid case, being distinguishable, from the facts of the instant case, no help, can be drawn, by the Counsel for the appellant, therefrom. The submission of the Counsel for the appellant, in this regard, being without merit, must fail, and the same stands rejected.

14. Since the appellant, deposited the allotment letter with the bank, with an intention to create the equitable mortgage, and it was held that the said letter, was a title deed, she being a guarantor, was liable to pay the amount, which was due to the bank, against the respondents. The statement of account P2 in consolidated form pertaining to all the three loan facilities availed of by the defendants, was produced. The other documents, were also executed by the defendants. The Courts below, on the basis of the evidence produced by the plaintiff came to the conclusion that a sum of Rs. 7,59,866.55/-, with interest, was due to the plaintiff, against the defendants. All the defendant were jointly and severally liable to pay the amount. The appellant, therefore, was liable to pay the amount.

15. The concurrent findings of fact, recorded by the Courts below, on the aforesaid points, being based, on the correct appreciation of evidence, and law, on the point, do not suffer from any illegality or perversity, and warrant no interference, by this Court. The judgements and decrees of the Courts below, are, thus, liable to be upheld. The submission of the Counsel for the appellant, being without merit, must fail, and the same stands rejected. The substantial questions of law, depicted above, are, answered against the appellant.

16. For the reasons recorded above, the instant Regular Second Appeal, being devoid of merit, must fail, and the same is dismissed with costs.