TMI Blog1976 (12) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Society Ltd., the mortgagee (hereinafter 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 ₹ 21,000/-. The Society wanted 12 flats to be constructed in one structure of ground and two upper floors. The Society purchased plot No. 153 in Santa Cruz at Bombay, measuring 1002 sq. yards. The price was ₹ 1,02,000/-. In 1966 the Society mortgaged the land and the incomplete structure in favour of the mortgagee. The mort- gage was for the sum of ₹ 70,000/-. It was an English mortgage. In 1968 the mortgagee advanced a further sum of ₹ 42,000/-. In 1966 Fair Deal Builders entered into a contract with Society 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 August 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 M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each of the statutory provisions of section 69 of the Transfer of Property Act. The sale was pot vitiated. It was found that there was no irregularity at the auction and there is no ground for setting aside the-sale. The society was entitled to redeem the proper- ty because the conveyance was not complete. The auction purchaser filed before the Maharashtra State Cooperative Appellate Court an appeal against 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 by the Society fell within the ambit of section 97 of the Maharashtra Cooperative Societies Act. The Appel- late Court further held that there was no complete sale within the meaning 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 grossly inadequate. The auction sale was not a sale after a fair competition. The Mortgage Deed provided inter alia as follows :-- it is hereby agreed and declared that it shall be lawful for the mortg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 mortgagee. Third,if the power is acted upon revocation even on payment cannot nullify acts pursuant to powers. Reliance was placed on sections 203 and 204 of the Indian Contract Act. Fourth, if the act done pursuant to power is that the property is put up for sale and it is knocked down it is an act done by the mortgagee for mortgagor In 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 Transfer of Property Act and this subsequent act will extinguish the mortgagor's right of redemption. Fifth, in a suit for specific performance by auction pur- chaser the purchaser will be entitled to specific perform- ance because it is a sale by mortgagor. Counsel for the appellant relied on two English deci- sions. These are: Waring (Lord) v. London and Manchester Assurance Co(1935) Chancery 310.), and Property Bloodstock Ltd. v. Emer- ton((1968) L.R. Chancery 94) in support of the propositions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property 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 right, 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 91 of the Trusts Act. The personal obligation created by a contract of sale is de- scribed in section 40 of the Transfer of Property Act as an obligation arising out of contract and annexed to the owner- ship of property, but not amounting to, an interest or easement 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 refers 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 instru- ment. The word conveys in section 5 of the transfer of Property Act is used in the wider sense of conveying owner- ship. The right of redemption which is embodied in section 60 of the Transfer of Property Act is available to the Mortga- gor unless it has been extinguished by the Act of parties. The combined effect of section 54 of the Transfer of Proper- ty Act and section 17 of the Indian Registration 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 equit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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