Case Brief: Sardar Govindrao Mahadik & Anr vs Devi Sahai & Ors

NAME OF THE CASE	Sardar Govindrao Mahadik & Anr vs Devi Sahai & Ors
CITATION	(1982) 1 SCC 237AIR 1982 SC 989
DATE OF JUDGMENT	December 15, 1981
APPELLANT	Sardar Govindrao Mahadik
RESPONDENT	Sahai
BENCH/JUDGES	D.A. Desai J. ; R.B. Misra J.
STATUTES INVOLVED	Transfer of Property Act, 1882Code of Civil Procedure, 1908Indian Evidence Act, 1872
IMPORTANT ARTICLES/SECTIONS	Section 53A of the Transfer of Property Act, 1882Section 60 of the Transfer of Property Act, 1882Section 91 of the Indian Evidence Act, 1872Section 92 of the Indian Evidence Act, 1872, Order 20, Rule 12 of the Code of Civil Procedure, 1908

Facts of the Case:

Govindrao Mahadik, the appellant in this case, owned a house in his name. He had mortgaged the said property to the respondent, Devi Sahai, for an amount of Rs. 10,000 only. Therefore, Devi Sahai was the mortgagee in this case. In this case, the given house was mortgaged, along with possession was given to him, for which he could possess and make use of the house. He could either adjust the income that could be incurred from the house against the interest made or could even pay rent in it. 

Later, the mortgager of the property, Govindrao Mahadik, sold away his right over the property to Gyarsilal. So, from then on, Gyarsilal was supposed to correct the amount that would be incurred from the property, in the authority of mortgager. So, Gyarsilal would from then on, got the right to redeem that property. Hence, he filed a suit of redemption over the property.

The case moved to the trial court. The trial court ruled in favour of him and held that the mortgagee should return the possession of the property to him once the leftover dues would get cleared.

This decision was challenged by the mortgagee, Devi Sahai. She filed an appeal before the High Court  stating that he had a contract of sale with Gyasilal. He held that, he had:-  i) already paid in advance an amount of Rs. 1,000 for the sale, in accordance with the sale agreement; (ii) already paid for the amounts required for stamp duty; (iii) continued to possess the said property in accordance with the contract of sale. This was stated by him before the High Court and on that basis, claimed to be protected by Section 53A of Transfer of Property Act, 1882 which deals with the doctrine of part performance. On that basis, the High Court allowed the appeal and ruled in favour of the respondent. The High Court held that he had rightly claimed protection under Section 53A of the Transfer of Property Act, 1882 and he was in possession based on the part performance of the sale deed. Therefore, the redemption suit court be resisted under the said section. 

This decision of the High Court was challenged and thereby, Mahadik and Gyarsilal together appealed before the Supreme Court against this decision. The appellants, Mahadik and Gyarsilal, held that there was no valid part performance on the part of the respondent and so their suit of redemption would stand valid by the law. The Supreme Court examined whether there was a valid and written sale agreement or not. They further examined whether the payment for stamp duties and the pre-payment of Rs. 1,000 would amount to being held under the doctrine of part performance. Finally, the apex court examined whether the possession of the property was done through a sale agreement or it was pre-existing due to a mortgage of the property. The Supreme Court held that there was no conclusive sale agreement, the payment made could not be considered under the doctrine of part performance, and finally, it was held that Devi Saha had possession of the property through a mortgage and not through the sale of the property. Therefore, section 53A would not apply in this case and the suit of redemption would be held valid. 

In conclusion, the supreme court overruled the decision of the High Court and upheld the decision presented by the trial case in the given case. 

Provisions Involved:

In the given case, various provisions were used to justify the case by both parties. The following provisions that were put up, are:

1. Doctrine of part performance- Under section 53A of the Transfer of Property Act, 1882, if a party to the contract had accomplished a part of their total performance and was willing to care out the rest in the later days, the doctrine of part performance could be pleaded as a defense before the court
2. Right of redemption- It is dealt under Section 60 of the Transfer of Property Act,1882, where it gives the mortgager the right to redeem or get back his property upon full repayment of the mortgage amount
3. Sections 91 and 92 of the Indian Evidence Act, 1872, which basically dealt with evidence in case of a written agreement. In the given case, no written agreement was made, but rather was based on an oral agreement of sale. 

Issues involved:

There were valid issues that were raised before the court by the parties. The issues dealt by the court included:

1.  Whether the suit of redemption, as brought by the appellant, would apply in the given case
2. Whether the agreement of sale between the mortgager's successor, Gyarsilal and mortgagee, Devi Sahai was valid and enforceable by law
3. Whether the doctrine of part performance could be claimed as a defense by the mortgagee
4. Whether the decision of High Court was correct in allowing the possession of the property by the respondent in furtherance of the alleged sale agreement

Arguments from the Appellant’s side:

The learned counsel representing the case on behalf of the appellants' side put forward arguments to state that the appellant side's suit of redemption was valid by law under section 60 of Transfer of Property Act, 1882. Since the sale deed was unregistered therefore it would remain unenforceable by law. 

The counsel further held that the doctrine of part performance would not apply in the given case. The transaction of money was not included under part performance. Those actions were ambiguous and couldn’t be clearly linked to as an action under the agreement to sale. No oral or informal agreement could be used to counter the right of redemption by the mortgager. Further, defendant’s possession over the property was as a mortgagee and not as a purchaser. The mortgagee continued to be in possession as a mortgagee and lacked any valid evidence of transfer of property which could aid him in validly considering the purchaser of the property. Therefore, the rights of the purchaser would not apply in this case. 

The counsel further argued that the equitable doctrine (doctrine of part performance) could not be used to override the statutory rights. 

Arguments from the respondent's side:

The respondent side was represented by his learned counsel to defend the case. He rejected the claims held by the appellant side and instead provided his arguments to validate the case. The respondent side held that they could be shielded by the doctrine of part performance under section 53A of Transfer of Property Act  1882. He held that there was a clear, oral agreement to sale the mortgaged property to him and for which he paid a amount of Rs. 1,000 in advance and paid for the stamped duties as well. Those were held as actions proving part performance on his part and his readiness and willingness to fulfil his part of the contract. He had made investments in that property as he continued to stay there for years. He possessed it not in the capacity of the mortgagee but on the capacity of a prospective buyer of the property. On these basis, he held that the successor of mortgagee couldn’t make claims over the property. 

Further, it was argued by his counsel that he had been possessing the property for a long period of time which was not objected by the appellant parties. This was considered by him as a form of implied consent, or what is termed as acquiescence. He pleaded before the court that the court should not strictly interpret the law, thereby stating that the absence of written or registered contract should not bar him from claiming defense under doctrine of redemption. 

On the above arguments, he held that the suit of redemption would be barred by law, as was filed by the appellant. He was the rightful possessor of the property and would become the buyer of the property based on the complete performance of agreement to sale. 

Judgment:

The apex court examined the case and heard the arguments of both the party. Upon deciding the case on merits, the court ruled in favor of the appellant. The court held that the doctrine of part performance would not apply as a defense for the appellant. Merely, showing some evidence of transaction would not amount to part performance. 

Further, the appellant was not competent to claim the property as his possession was in the form of a mere possessor and didn’t occupy the capacity of a buyer of the property. Therefore the suit of redemption would survive under section 60 of the Transfer of Property Act, 1882. The court further held that equitable doctrine would not be able to override the statutory principles of law, upon non fulfilment of the conditions mentioned in law. 

There was absence of valid contract of sale between them as it unregistered and oral. Redemption, being a legal right, required strong evidence to reject someone’s right to redeem a property. 

So, on this basis, the court allowed the appeal. 

Conclusion:

The respondent was directed to deliver the possession to the mortgagee's successor, setting an example that valid requirement of documents are the essence to decide a case on redemption of property. 

This case had set precedent for later judgments related to property dispute, in the later years.