Judgment:
1. Jito appellant and Dalip Singh respondent No. 4 were the owners of land measuring 58 kanals, detailed in para 1 of the plaint of each of the three civil suits. Jito appellant mortgaged with possession a part of the aforesaid land measuring 56 kanals with Hazara Singh and others for a consideration of Rs. 10,500/- vide mortgage deed dated 3-2-1958 Ex.P-4.
2. Jito appellant further mortgaged the land mentioned in para 1 of the plaint vide mortgage deed dated September 5, 1960, Ex. P-5, for a consideration of Rs. 13,000/- in favour of Amarjit Singh and others. Out of this sale consideration, a sum of Rs. 10,500/-was left with these mortgagees for payment to the mortgagees covered by mortgage deed Ex.P-4. Mortgage deed Ex.P-5 contained a stipulation to the effect that the mortgagor would be entitled to redeem the land after the expiry of ten years.
3. On 5-11-1964, Jito appellant again mortgaged three different parcels of land out of the land covered by mortgage deed Ex.P-4 In favour of Kripal Singh, Swaran Singh and Balwant Singh plaintiffs in suit No. 86, 87 and 84 of 1975 respectively, in the following manner:--
Mortgage deed
Mortgagee's name
Consideration
l. Ex.P-1 dated 12-11-1964
Kripal Singh
Rs. 5,500/-
2. Ex.P-2 dated 13-11-1964
Bat want Singh
Rs. 6,000/-
3. Ex.P-3 dalcd 12-11-1964
Swaran Singh
Rs. 6,000/-
4. Out of the amount of Rs. 5,500/-covered by mortgage deed Ex.P-1, an amount of Rs.4,800/- was kept with Kripal Singhplaintiff for payment to previous mortgagees while a sum of Rs. 100/- was adjusted towards stamp, and registration charges and a sum of Rs. 500/- was paid to Jito appellant by way of earnest money.
5. Out of the consideration covered by mortgage deeds Exs. P-2, and P-3, an amount of Rs. 5,900/- each was kept by Balwant Singh and Swaran Singh plaintiffs for payment to the previous mortgagees and a sum of Rs. 100/- each was adjusted towards stamp and registration charges.
6. There was a stipulation in all the three mortgage deeds, Exs. P-1, P-2 and P-3, that Jito appellant (mortgagor) would be entitled to redeem the land covered by these three mortgage deeds after the expiry of 15 years, which period would start after the expiry of ten years of the previous mortgage deed Ex. P-5 and when the plaintiffs would come in possession.
7. Jito appellant also created an additional charge of Rs. 14,500/- on the land already mortgaged with previous mortgagees Amarjit Singh and other, (under mortgage deed Ex.P-4), in the year 1968.
8. On December 21, 1972, Jito appellant sold 4/5th share of above land, measuring 14 Kanals 13 Marias vide sale deed Ex.P-6 to Ajit Singh son of Udham Singh (Vendee-appellant) for a sale consideration of Rs. 29,000/- Out of this sale consideration, Rs. 10,000/- were kept by vendee-appellant for payment to Hazara Singh and others, the previous mortgagees. Rs. 15,000/- were received by him as earnest money and Rs.4,000/- were paid to him in the presence of the Sub Registrar.
9. Ajit Singh vendee-appellant paid a sum of Rs. 10,000/- to Amarjit Singh and others, previous mortgagees and got the land measuring 14 Kanals 13 Marias forming part of suit land, redeemed on 2-6-1973 and thus, came in its possession.
10. Jito appellant came in possession of land forming a part of the suit land, which he got redeemed from Amarjit Singh and others on payment of Rs. 17,500/- on 28-1-1975.
11. The suits were contested by the appellants-Jito and Vendee-defendant Ajit Singh. They pleaded that the mortgage deeds Ex.P-1, P-2 and P-3 in favour of respective plaintiffs were unenforceable as no consideration had passed for the execution of these mortgage deeds in their favour and the mortgage deeds executed in favour of plaintiffs Balwant Singh and Swaran Singh were without consideration as nothing was paid to Jito appellant. So far as the mortgage deed Ex.P-1 in favour of Kripal Singh plaintiff is concerned, it was pleaded that the same was also without consideration as the alleged sum of Rs. 500/- was never paid to Jito appellant as earnest money.
12. The parties were put to trial on thefollowing issues:--
1. Whether defendant No. 1 had executed additional mortgage deed in favour of Amar-jit Singh, Ranjit Singh and Harjinder Singh as alleged in para No. 3 of the written statement, if so, its effect? OPD.
2. Whether the amount of Rs. 500/- paid as earnest money as mentioned in mortgage deed dated 5-11-1964 is fictitious? OPD.
3. Whether the costs of mortgage deed dated 5-11-1964 were incurred by defendant No. 1? OPD
4. Whether the mortgage deed executed in favour of the plaintiff is not enforceable? OPD.
5. Whether the mortgage deed dated 3-2-1958 has become extinguished on 5-9-1960 as alleged in para No. 7 of the written statement. If so, its effect? OPD.
6. Whether defendant No. 2 had become the mortgagor of the property in suit by purchase and he is in possession of the disputed land as mortgagor of the plaintiff. If so, its effect? OPP.
7. Whether the plaintiff is estopped from enforcing the mortgage in dispute? OPD
8. Whether the plaintiff is entitled to the decree prayed for. If so, on what terms? OPP
8-A. Whether notice under S. 79 of the Co-operative Societies Act is necessary in this case. If so, its effect? OPD
8-B. Whether the Civil Court has no jurisdiction to entertain this suit? OPD
9. Relief.
13. All the three suits were consolidated by the trial Court and the evidence was recorded in Civil Suit No. 86 of 1975. The trial Court decreed the three suits in favour of the plaintiffs and against the defendants, by a common judgment dated 23-9-1978.
14. Feeling aggrieved against the judgment and decree of the trial Court, the appellants preferred three separate appeals which were dismissed by the first appellate Court vide judgment and decree dated 18-1-1980, affirming that of the trial Court.
15. The judgment and decree of the First Appellate Court has been impugned by Jito appellant and Ajit Singh vendee-appellant in three Regular Second Appeals Nos. 262, 263 and 264 of 1980. As they have arisen out of the same judgment, I am going to dispose of these appeals by this judgment.
16. I have heard the learned counsel for the parties and have gone through the evidence and other material on record.
17. It has been submitted by the learned counsel for the appellants that after having come to a conclusion that nothing was paid to the mortgagor before the Sub Registrar under mortgage deeds Exs.P-2 and P-3, the Courts below should have dismissed the suits holding that these mortgage deeds were not enforceable and that these were the result of fraud and undue influence.
18. I do not find any force in this submission of the learned counsel for the appellants. In the first place, there was no plea of fraud or undue influence taken by the defendant-appellants. There is also no evidence worth referable on record to support this plea of the appellants. Merely, because no consideration has passed to the mortgagor, that by itself is no ground to hold that it was a sham transaction or was not enforceable. The moment contract of mortgage is complete, thenecessary presumption is in favour of its due execution and due transfer of interest covered by it. No evidence has been led by the defendant-appellants to rebut the said presumption. Once the due execution of the mortgage deed stands proved, the passing of the consideration is of no consequence so far as its validity is concerned because mortgage is not a contract but a transfer of interest. Both the Courts below in support of the above legal position have rightly relied upon a Full Bench decision of Lahore High Court in AIR 1916 Lahore 155, Allah Ditta v. Nazir Din wherein para 1 of the judgment, it has been held as under :-
'In the absence of a covenant orstipulation to the contrary a mortgage is complete, or in other words, the 'transfer of interest' is effected, not when the consideration for it is paid or made good but when the mortgage contract is entered into, regardless of whether and when the consideration is paid or made good.'
19. Admittedly, in the case before me, there was no stipulation or covenant incorporated in the impugned mortgage deeds that mortgage would come into operation on the payment of the consideration.
20. The legal position on the point in issue is further settled by the Apex Court in AIR 1968 SC 1361 State of Kerala v. The Cochin Chemical Refineries Ltd. In para 5 of the said judgment, it has been held as under:--
'Counsel for the State contended that so long as the loan was not advanced by the State, the mortgage was not in law effective, and the company would not enforce the contract relating to groundnut cake agreed to be purchased by the State, for the obligation undertaken was in consideration of the loan of Rs. 2,50,000/- and arose only when the loan was advanced, but the assumption, that if the State did not advance the loan which it had undertaken to advance, the indenture was ineffective cannot be accepted. There is no such express term in the deed, and none can be implied from the covenants and the sorrounding circumstances. A transaction of mortgage formally executed does not becomevoid or effective merely because the mortgagee fails to advance the amount of money undertaken to be advanced by him. If without advancing the amount agreed to be advanced. he sues on the title created under the deed of mortgage, the Court, will not award him a decree for anything than what he has advanced But that is not to say that the mortgage is invalid.
.....
Similar observations were made in Rashik Lal v. Ram Narain, (1912) ILR 34 All 273 where Karamat Hussain, J., observed at page 276:
'.....mortgage under the Transfer of Property Act is a transfer of an interest in the land mortgaged, and not a mere contract. It therefore follows that no sooner a valid mortgage deed is registered, an interest in the property mortgaged, in the absence of any contract to the contrary, vests in the mortgagee notwithstanding the fact that the mortgage money has not been paid by the mortgagee to the mortgagor. The mere non-payment of the mortgage money cannot have the effect of rendering the mortgage invalid.'
Sulaiman, J. in Dip Narain Singh v. Nagesher Prasad, ILR 52 All 338 : AIR 1930 All I (FB) observed that at page 2 once a document transferring immovable property has been registered, the transaction passes out of the domain of a mere contract and into one of a conveyance. Such a completed transaction is governed by the provisions of the Transfer of Property Act and so much of the Contract Act as is applicable thereto.'
21. In the case in hand, there is nothing on record to show that the mortgage deed was to become operative after the passing of the consideration. There is neither any pleading nor any evidence, directly or circumstantially, to suggest that the transfer of interest under the impugned mortgages was to take effect on payment of the mortgage money.
22. For the reasons stated above, I do not find any merit in these appeals and the same are accordingly dismissed. The impugnedjudgments and decrees of the Courts below are affirmed. There will be no order as tocosts.
23. Appeals dismissed.