TMI Blog1991 (1) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... to execute by way of a collateral security a legal mortgage with or without possession at the option of the bank in favour of the bank of the immoveable property, namely, flat No. A/17, 9th floor, Ballard View, Tardev, Bombay, which belonged to her absolutely with no encumbrances or charges. She agreed to do so within 14 days of the issuance of written requisition by the bank calling upon her to execute such mortgage to secure all monies due or that may become due from M/s. Nitin Pharmaceuticals to the bank. By notice dated 17-11-1977, the appellant-plaintiff called upon the respondent-defendant to execute the mortgage as per the agreement Ex. 20. This notice is at Ex. 21 issued to her which is proved by Ex. 22. Ex. 25 is her reply refusing to execute such mortgage. The reply is dated 23-11-1977. Thereafter, Special Civil Suit No. 174 of 1978 is filed on 29-4-1978. The plaintiff examined an officer of the bank Ulhas D. Pundlik at Ex. 19 and was cross-examined by the defendant. The defendant has not led any evidence and has not examined herself. 3. The learned trial Judge dismissed the suit holding that the writing Ex. 20 is admittedly not disputed but it is without consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantor for her husband and if it is the case of the plaintiff that the flat is benami, then her husband is necessary party in the suit and the suit should be for declaration that the flat be held to be benami and the husband should be joined as a party and the husband should be directed to execute mortgage as a real owner. 6. In the present suit, there is a limited relief claimed against the defendant only of execution of the mortgage of the flat which stands in the name of the defendant and the defendant who has agreed to give that immoveable property as mortgage is sought to be sued for specific performance thereof wherein there is no relief claimed against the husband. The husband is neither necessary nor a proper party. Here, the suit is a suit simplichor for specific performance of the agreement. In such a suit, the husband or the principal debtor is neither necessary nor a proper party and the suit is not bad for non-joinder of party. The suit is also not for recovery of the dues from the husband. In fact, such suit was separately filed and that suit is referred to in the suit notice itself. The learned Counsel for the appellant states that the suit against the husband ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance monies on creation of such mortgage, there cannot be specific performance of the contract to lend money. But when the lender has advanced the money and the debtor has agreed to create a mortgage, that agreement is specifically enforceable. This proposition has been laid down in the case of Meenakshi Sundara v. Rathnaswami AIR 1919 Madras 322 and in the case of Hukamchand Kasliwal v. Radha Kishan . Privy Council held that the document in that case did not constitute a mortgage or a charge, but that agreement created a right to obtain another document, i.e., regular deed of mortgage. These are the observations of Privy Council although the question was not directly for consideration in that case. 8. Section 14(1) and (3) of the Specific Relief Act reads as under: Section 14: Contracts not specifically enforceable: (1) The following contracts cannot be specifically enforced, namely: (a) a contract for the non-performance of which compensation in money is an adequate relief; (b) a contract which runs into such minute or numerous details or which is so dependent on the personal qualifications or volition of the parties, or otherwise from its nature is auch, that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This guarantee is limited to the security offered by the promissor, namely, the mortgage and no further or personal liability is taken by the promisor. Thus, the promisor has became a surety and this would be an agreement to offer security for due performance of that promise and to that extent. Sections 126, 127 and 128 of the Contract Act read as follows: 126. A 'contract of guarantee' is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the 'surety', the person in respect of whose default the guarantee is given is called the 'principal debtor' and the person to whom the guarantee is given is called the 'creditor'. A guarantee may be either oral or written 127. Anything done, or any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee. 128. The liability of the surety is co-extensive with that of the principal debtor, unless it Is otherwise provided by the contract. The liability of the surety is co-extensive with that of the debtor. However, in the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is void. This kind of illustration would apply to a total stranger and volunteer who for no consideration whatsoever, agrees to pay in default of payment by the principal debtor. Obviously, in such cases, agreement would be void for being without consideration. 12. In the present case, the consideration that anything done for the benefit of the principal debtor is a sufficient consideration to the surety. Anything done in the present case is that the loans advanced to the principal debtor who is the husband of the present defendant. She has agreed to give collateral security to secure the dues in default of payment by her husband. Apart from the close relationship of husband and wife, there is substantial consideration by having advanced the loan. 13. The contention of the defendant seems to be that the loan was already advanced and at the time of giving promise of creating the mortgage, there was no consideration whatsoever and anything done in the past for the benefit of the principal debtor is no sufficient consideration to the surety for giving guarantee or promise of security at a later date. Apart from the fact that Section 127 itself provides that anything done fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty is or may be benefited. The promise to forbear may be made absolutely, or for a certain time or for no specified time at all. If no time is specified in the promise, the promise is construed as one to forbear for a reasonable time. 177. Actual forbearance: A creditor, who without making any express promise, simply forbears from enforcing a debt or other claim may be held to have impliedly promised to forbear. For example, the acceptance of a cheque in payment of a debt may be evidence of a promise not to sue the debtor so long as the cheque is not dishonoured, or at least for a reasonable time. An actual forbearance may, moreover constitute consideration even though the creditor has not made any express or implied promise to forbear. Thus, the plaintiff not enforcing the claim against the principal debtor or even the third person may be sufficient consideration by the debtor or third person to give security for the debt and the consideration for such promise is that by such forbearance, the creditor is delayed and the debtor or third party is benefited. It is also seen that even in absence of express promise to forbear, a simple forbearance from enforcing the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Ramesh Shah v. H.J. Joshi . In that case, the question was under Section 60 of the Civil Procedure Code as to whether such interest of a member could be attached and sold in execution against the allottee of a flat in a co-operative housing society. Bombay High Court held that the member did not have any attachable or transferable interest in such flat as an allottee member of the co-operative housing society. However, the Supreme Court reversed the judgment of the Bombay High Court and held that such flat is liable to attachment and sale in execution of a decree against a member in whose favour or for whose benefit the same has been allotted by the society. The Supreme Court observed that right to occupy a flat of this type assumes significant importance and acquires under the law, a stamp of transferability in furtherance of the interest of commerce and the Supreme Court held that there is no absolute ban on the sale ability or transferability of the flat. The Supreme Court went to the extent of holding that even the right or interest of the allottee to occupy the flat is the right which is attachable in execution and can be sold. The Court held that merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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