Case Note & Summary
The appellants, Smt. Gowramma and another, were the original plaintiffs who had mortgaged their land in 1980 to Bangarasetty for Rs. 3,000. In 1982, they entered into an agreement to sell the same land to Kalingappa for Rs. 6,000. Kalingappa filed a suit for specific performance (OS No. 48 of 1983), which was decreed in 1984. The decree directed the appellants to execute the sale deed and the mortgagee to return the mortgage deed and hand over possession. However, Kalingappa did not execute the decree, and his execution petition was dismissed as not pressed in 1997. Meanwhile, the original mortgagee assigned the mortgage to Sundarasetty, who was put in possession. Kalingappa paid Rs. 3,000 to Sundarasetty and was put in possession of the land. In 2002, the appellants filed a suit for redemption of mortgage (OS No. 45 of 2002) against the mortgagee and Kalingappa. The trial court decreed the suit, directing Kalingappa to hand over possession upon payment of Rs. 3,000. The first appellate court confirmed this. Kalingappa's legal heirs appealed to the High Court in RSA No. 2092 of 2008. The High Court allowed the appeal, holding that the mortgage was extinguished by the act of parties under the proviso to Section 60 of the Transfer of Property Act, 1882, and dismissed the suit. The Supreme Court upheld the High Court's decision, reasoning that the right to redeem was extinguished when Sundarasetty received the mortgage amount from Kalingappa and put him in possession. The Court rejected the appellants' argument that a formal endorsement or registered acknowledgment was necessary, noting that the proviso to Section 60 allows extinguishment by act of parties or by decree of court. The appeal was dismissed without costs.
Headnote
A) Property Law - Mortgage Redemption - Section 60 Transfer of Property Act, 1882 - Extinguishment of Mortgage - The appellants mortgaged land in 1980 and later entered into an agreement to sell to Kalingappa in 1982. Kalingappa obtained a decree for specific performance in 1984 but did not execute it. Meanwhile, the mortgagee assigned the mortgage to Sundarasetty. Kalingappa paid the mortgage amount to Sundarasetty and was put in possession. The appellants filed a suit for redemption in 2002. The High Court held that the mortgage was extinguished by the act of parties under the proviso to Section 60. The Supreme Court affirmed, holding that the right to redeem was extinguished by the act of the mortgagee assignee receiving the mortgage amount and putting Kalingappa in possession. (Paras 5-10) B) Property Law - Extinguishment of Mortgage - Proviso to Section 60 Transfer of Property Act, 1882 - Act of Parties - The Supreme Court held that the mortgage can be extinguished by the act of the parties even without a formal endorsement (Shera) or registered acknowledgment, as per the proviso to Section 60. In this case, the mortgagee assignee's receipt of the mortgage amount and delivery of possession to Kalingappa constituted an act of parties extinguishing the mortgage. (Paras 9-10)
Issue of Consideration
Whether the mortgage was extinguished by the act of the parties under the proviso to Section 60 of the Transfer of Property Act, 1882, thereby barring the suit for redemption of mortgage.
Final Decision
The Supreme Court dismissed the appeal, upholding the High Court's judgment that the mortgage was extinguished by the act of parties under the proviso to Section 60 of the Transfer of Property Act, 1882. No costs.
Law Points
- Mortgage redemption
- Extinguishment of mortgage by act of parties
- Section 60 Transfer of Property Act
- 1882
- Specific performance decree not executed
- Right to redeem extinguished
