Sunday, 17 January 2016

Good legal article on drafting of contract and their use in court

DOCUMENT WHICH IS REGISTRABLE AND NOT TRANSACTION
Deb Dutt Seal v. Raman Lal, AIR 1970 SC 659 wherein the
Hon'ble Supreme Court has held that it is on the construction of the document wherein it requires registration or not. The Hon'ble Supreme Court observed that in order to require registration, document must contain all the essentials of transaction and one essential is that the title deeds contain all essential of transaction. According to the Hon'ble Supreme Court it is a document which is registrable under the Registration Act and not a transaction.
THE REGISTERED DOCUMENT WILL OPERATE, NOT FROM THE DATE OF ACTUAL REGISTRATION, BUT FROM THE DATE WHEN THE DEED WAS EXECUTED
JUSTICE R Raveendran, JUSTICE K Manjunath in the case of Veerabhadrappa And Anr. vs Jagadishgouda ILR 2003 KAR 3042, 2002 (5) KarLJ 55 It is well-settled that when a document is duly presented for registration (within the time prescribed), if its registration is refused or if its registration is kept pending, and thereafter the document is registered either on the direction of the Registrar or competent Court or on the Sub-Registrar satisfying himself that there is no impediment for registration, the registered document will operate, not from the date of actual registration, but from the date when the deed was executed. This principle can be gathered from the provisions of the Registration Act, 1908 (Sections 47 and 75) and several decisions the earliest of which are that of the Madras High Court in the case of Venkatarama Reddi v. Pillati Rama Reddy, ILR 1916(40) Mad. 204 and of the Privy Council in the case of Chhotey Lal v. Collector of Moradabad, AIR 1922 PC 279 : ILR 1922(44) All. 514. A learned Single Judge of this Court in the case of Azeezulla Sheriff alias Anwar Pasha and Ors. v. Bhab-huthimul, 1972(2) Mys. L.J. 408 : AIR 1973 Mys. 276, held thus: "Sub-section (3) of Section 75, only determines the deemed date of registration in respect of documents compulsorily registered in pursuance of an order made under Section 75(1). Sub-section (3) of Section 75 does not deal with the effect of registration of a document. That topic is dealt with by Section 47 which states that once a document is registered, it shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its -registration. The expression "not from the time of its registration" used in Section 47 makes it clear that the date of registration, whether actual or the deemed date under Section 75(3), has no relevance whatsoever for determining the time from which the registered document operates. Once the document is registered, whether it is on admission of execution under Section 35 or by way of compulsory registration under Part XII of the Act, the provisions of Section 47 are attracted for the purpose of determining the time from which the registered document operates". This was reiterated in the case of Rathnakar v. H.S. Madhava Rao and Ors., 1990(4) Kar. L.J. 541 : ILR 1991 Kar. 2190
JUSTICE R Raveendran, JUSTICE K Manjunath in the case of Veerabhadrappa And Anr. vs Jagadishgouda ILR 2003 KAR 3042, 2002 (5) KarLJ 55 When registration of a document is ordered to be kept pending, or when registration of a document is refused, and subsequently such document is ordered to be registered, such registration takes effect as if the document had been registered when it was first duly presented for registration. That would mean that the registration relates back to the date of execution. The well-settled principle is that if there is a competition between registered documents relating to the same property, the document first in order of time has priority over the other, though the former document may not have been registered until after the latter.
JUSTICE R Raveendran, JUSTICE K Manjunath in the case of Veerabhadrappa And Anr. vs Jagadishgouda ILR 2003 KAR 3042, 2002 (5) KarLJ 55 The role played by the Sub-Registrar in registering a document is rather limited. He has no power or authority to examine the rival claims as to whether a sale deed presented for registration is really a sale deed or not, nor is he empowered to grant any declarations in regard to binding nature of documents.
NO DIRECTION CAN BE ISSUED TO THE SUB-REGISTRAR NOT TO REGISTER THE DOCUMENT
Justice B Singh, Justice J Shety In S. Sreenivasa Rao v. The Sub-Registrar (Headquarters), Mysore, ILR 1990 KAR 3740, 1990 (2) KarLJ 258 Court held that if the provisions of the Registration Act and Rules and other laws are complied with, the Sub-Registrar is bound to register the document and no direction can be issued to the Sub-Registrar not to register the document. It was also held that if any person is interested in contending that the registered document is invalid or illegal for any reason, he has to question the validity before the proper forum in appropriate proceedings. …. We also find no provision in the Registration Act, 1908 which obliges the Sub-Registrar to act upon any such direction and/or to investigate at the stage of registration of a document itself, the title of the party executing the document. We are, therefore of the view that if a document is presented for registration by the executant, and in doing so, the executant complies with all the provisions of Registration Act, 1908, it is not open to the Sub-Registrar to refuse registration of the document unless he exercises that discretion pursuant to any provision in the Registration Act, 1908 or any other law or Rule having the force of law. The mere registration of a document is by itself not a proof of its validity, neither does it follow that the executant had title to the property, he seeks to dispose of under the document. Matters such as relating to title have to be decided before the appropriate forum. If any person is interested in contending that any particular document executed and registered under the Registration Act, 1908 is invalid or illegal for any reason whatsoever, he !s certainly at liberty to question the validity of the document, the title of the executant, and such other questions before the proper forum in an appropriate proceeding.”
Rule 145 of the Karnataka Registration Rules, provides thus: "Protests against registration of documents.--The Registering Officer should not entertain any petition protesting against registration of document. Such petitions, when insisted should be received and returned immediately with an appropriate endorse ment and no record should be kept in the office. Since these petitions are not to be filed, their copies cannot be granted".
LIMITATION RUN FROM THE DATE OF THE KNOWLEDGE
Justice K.L. Manjunath, J. in the case of Leelavathi vs M. Neelakanta Naidu, Reported in ILR 2006 KAR 4637, 2006 (6) KarLJ 617 …….if any document is registered behind the back of the true owner in a clandestine manner, owner of a property is not expected to go before the Sub-Register' s Office and verify whether any third party has executed a document in respect of his property to a third party. In other words, owner of the property cannot keep a watch or stand before the Sub-Register like a Watch-dog to verify whether any parson has executed any document conveying his property to a third party. From reading of Article 59, the Court has to hold that the limitation run from the date of the knowledge. Therefore, in order to find out the actual date of knowledge, the evidence is required to be recorded by the Trial Court as it is a mixed question of fact and law. The date of knowledge is a question of fact and without there being an evidence, the Trial Court was not justified in dismissing the suit as barred by limitation.
SUB-REGISTRAR CANNOT GO INTO QUESTION OF TITLE AND GENUINENESS OF DOCUMENTS
Justice V G Gowda in the case of Sulochanamma vs H. Nanjundaswamy 2001 (1) KarLJ 215 The Sub-Registrar was entrusted with the duty of registering the documents in accordance with the provisions of the Act and he was not authorised to go into the genuineness or otherwise of the documents presented before him. If the documents are bogus or false, the party affected by it will have the right to initiate both civil and criminal proceedings to prosecute the party who tries to have benefit from such document and also to safeguard his right, title and interest. It was not for either the Tahsildar or the Sub-Registrar to express opinion as to the genuineness or otherwise of the documents unless called upon by the Court of law or any other authorised investigating agency. There was no occassion for the Sub-Registrar to refer the document to the Tahsildar when presented for the purpose of registration. Thus, both the Tahsildar and the Sub-Registrar have exceeded their jurisdiction in the matter in submitting his report regarding registration of the document and upon such report the second respondent should not have made an endorsement on the document and refused to register the document by him.
PRESUMPTION OF REGISTERED DOCUMENT
Prem Singh vs. Birbal (2006) 5 SCC 353 the Apex Court has held that there is a presumption that a register document is validly executed. A registered document, therefore, prima facie could be valid in law. The onus of proof thus would be on a person who leads evidence to rebut the presumption.
CERTIFIED COPY OF A DOCUMENT NEED NOT BE PROVED BY CALLING WITNESS
The document being a certified copy of a public document need not proved by calling a witness (vide Madamanchi Ramappa v. Muthaluru Bojjappa AIR 1963 SC 1633).
EFFECT OF REGISTRATION OF DOCUMENT
Honourable Apex Court in SURAJ LAMP & INDUSTRIES (P) LTD. vs. STATE OF HARAYANA [(2009) 7 SCC 363]. The following passage is apposite: "18.Registration provides safety and security to transactions relating to immovable property, even if the document is lost or destroyed. It gives publicity and public exposure to documents thereby preventing forgeries and frauds in regard to transactions and execution of documents. Registration provides information to people who may deal with a property, as to the nature and extent of the rights which persons may have, affecting that property. In other words, it enables people to find out whether any particular property with which they are concerned, has been subjected to any legal obligation or liability and who is or are the person(s) presently having right, title, and interest in the property. It gives solemnity of form and perpetuate documents which are of legal importance or relevance by recording them, where people may see the record and enquire and ascertain what the particulars are and as far as land is concerned what obligations exist with regard to them. It ensures that every person dealing with immovable property can rely with confidence upon the statements contained in the registers (maintained under the said Act) as a full and complete account of all transactions by which the title to the property may be affected and secure extracts/copies duly certified."
REQUIREMENT OF ONE ATTESTING WITNESS TO PROVE A DOCUMENT
Rosammal Issetheenammal Fernandez (dead) by Lrs and others v. Joosa Mariyan Fernandez and others ) AIR 2000 Supreme Court 2857 wherein the Apex Court has held '9. ... The main Part of Section 68 of the Indian Evidence Act puts on obligation on the party tendering any document that unless at lest one attesting witness has been called for proving such execution the same shall not be used in evidence'.
ONCE DOCUMENT IS ADMITTED SUCH ORDER IS FINAL
Hon'ble Supreme Court in AIR 1961 SC 1655 (Javer Chand v. Pukhraj Surana) that; “Once a document has been marked as an exhibit in the case and has been used by the parties in examination and cross-examination of their witnesses, S.36 comes into operation. Once a document has been admitted in evidence, as aforesaid, it is not open either to the trial court itself or to a Court of Appeal or Revision to go behind that order. Such an order is not one of those judicial orders which are liable to be reviewed or revised by the same Court or a Court of superior jurisdiction.”
DUTY OF COURT TO EXAMINE PROBATIVE VALUE OF EVERY DOCUMENT
Apex Court in H.Siddiqui v. A. Ramalingam (2011 (4) SC 240) `Admissibility of a document is one thing and its positive value quite another these two aspects cannot be combined. A document may be admissible and yet may not carry any conviction and the weight of its probative value may be nil .......... Therefore, it is the duty of the Court to examine whether documents produced in the Court or contents thereof have any probative value.
In State of Bihar and Ors. v. Sri Radha Krishna Singh & Ors., AIR 1983 SC 684, held as under: “Admissibility of a document is one thing and its probative value quite another - these two aspects cannot be combined. A document may be admissible and yet may not carry any conviction and the weight of its probative value may be nil.” ………….Where a report is given by a responsible officer, which is based on evidence of witnesses and documents and has “a statutory flavour in that it is given not merely by an administrative officer but under the authority of a Statute, its probative value would indeed be very high so as to be entitled to great weight. The probative value of documents which, however ancient they may be, do not disclose sources of their information or have not achieved sufficient notoriety is precious little.”
In Madan Mohan Singh & Ors. v. Rajni Kant & Anr., AIR 2010 SC 2933, Court examined a case as a court of fifth instance. The statutory authorities and the High Court has determined the issues taking into consideration a large number of documents including electoral rolls and school leaving certificates and held that such documents were admissible in evidence. This Court examined the documents and contents thereof and reached the conclusion that if the contents of the said documents are examined making mere arithmetical exercise it would lead not only to improbabilities and impossibilities but also to absurdity. This Court examined the probative value of the contents of the said documents and came to the conclusion that Smt. Shakuntala, second wife of the father of the contesting parties therein had given birth to the first child two years prior to her own birth. The second child was born when she was 6 years of age; the third child was born at the age of 8 years; the fourth child was born at the age of 10 years; and she gave birth to the fifth child when she was 12 years of age. Therefore, it is the duty of the court to examine whether documents produced in the Court or contents thereof have any probative value.
PRESUMTIVE AND PROBATIVE VALUE OF ENTRIES MADE IN OFFICIAL RECORD
(2010) 9 SCC 209 [ Madan Mohan Singh and others vs. Rajni Kant and another “Therefore, a document may be admissible, but as to whether the entry contained therein has any probative value may still be required to be examined in the facts and circumstances of a particular case. The aforesaid legal proposition stands fortified by the judgments of this Court in Ram Prasad Sharma Vs. State of Bihar AIR 1970 SC 326; Ram Murti Vs. State of Haryana AIR 1970 SC 1029; Dayaram & Ors. Vs. Dawalatshah & Anr. AIR 1971 SC 681; Harpal Singh & Anr. Vs. State of Himachal Pradesh AIR 1981 SC 361; Ravinder Singh Gorkhi Vs. State of U.P. (2006) 5 SCC 584; Babloo Pasi Vs. State of Jharkhand & Anr. (2008) 13 SCC 133; Desh Raj Vs. Bodh Raj AIR 2008 SC 632; and Ram Suresh Singh Vs. Prabhat Singh @Chhotu Singh & Anr. (2009) 6 SCC 681. In these cases, it has been held that even if the entry was made in an official record by the concerned official in the discharge of his official duty, it may have weight but still may require corroboration by the person on whose information the entry has been made and as to whether the entry so made has been exhibited and proved. The standard of proof required herein is the same as in other civil and criminal cases. …………….. Such entries may be in any public document, i.e. school register, voter list or family register prepared under the Rules and Regulations etc. in force, and may be admissible under Section 35 of the Evidence Act as held in Mohd. Ikram Hussain Vs. The State of U.P. & Ors. AIR 1964 SC 1625; and Santenu Mitra Vs. State of West Bengal AIR 1999 SC 1587. …………….. So far as the entries made in the official record by an official or person authorised in performance of official duties are concerned, they may be admissible under Section 35 of the Evidence Act but the court has a right to examine their probative value. The authenticity of the entries would depend on whose information such entries stood recorded and what was his source of information. The entry in School Register/School Leaving Certificate require to be proved in accordance with law and the standard of proof required in such cases remained the same as in any other civil or criminal cases. ……………. For determining the age of a person, the best evidence is of his/her parents, if it is supported by un-impeccable documents. In case the date of birth depicted in the school register/certificate stands belied by the un-impeccable evidence of reliable persons and contemporaneous documents like the date of birth register of the Municipal Corporation, Government Hospital/Nursing Home etc, the entry in the school register is to be discarded. (Vide: Brij Mohan Singh Vs. Priya Brat Narain Sinha & Ors. AIR 1965 SC 282; Birad Mal Singhvi Vs. Anand Purohit AIR 1988 SC 1796; Vishnu Vs. State of Maharashtra (2006) 1 SCC 283; and Satpal Singh Vs. State of Haryana JT 2010 (7) SC 500). …………………. If a person wants to rely on a particular date of birth and wants to press a document in service, he has to prove its authenticity in terms of Section 32(5) of the Evidence Act by examining the person having special means of knowledge, authenticity of date, time etc. mentioned therein. (Vide: Updesh Kumar & Ors. Vs. Prithvi Singh & Ors., (2001) 2 SCC 524; and State of Punjab Vs. Mohinder Singh, AIR 2005 SC 1868). …………………. In S. Khushboo Vs. Kanniammal & Anr. (2010) 5 SCC 600, this Court, placing reliance upon its earlier decision in Lata Singh Vs. State of U.P. & Anr. AIR 2006 SC 2522, held that live-in-relationship is permissible only in unmarried major persons of heterogeneous sex. …………….. In S.P.S. Balasubramanyam Vs. Suruttayan @ Andali Padayachi & Ors. AIR 1992 SC 756, this Court held that if man and woman are living under the same roof and cohabiting for a number of years, there will be a presumption under Section 114 of the Evidence Act, that they live as husband and wife and the children born to them will not be illegitimate. …………… The courts have consistently held that the law presumes in favour of marriage and against concubinage, when a man and woman have cohabited continuously for a number of years. However, such presumption can be rebutted by leading unimpeachable evidence. (Vide: Mohabbat Ali Khan Vs. Mohd. Ibrahim Khan, AIR 1929 PC 135; Gokalchand Vs.. Parvin Kumar, AIR 1952 SC 231; S.P.S. Balasubramanyam Vs. Suruttayan, (1994) 1 SCC 460; Ranganath Parmeshwar Panditrao Mali Vs. Eknath Gajanan Kulkarni, (1996) 7 SCC 681; and Sobha Hymavathi Devi Vs. Setti Gangadhara Swamy & Ors., (2005) 2 SCC 244).
ORAL AGREEMENT CONTRARY TO WRITTEN CONTRACT IS NOT AN EVIDENCE
S. Saktivel (Dead) by LRs v. M. Venugopal Pillai and others AIR 2000 S.C. 2633 in which it has been held by the Apex Court that modification by oral contract against the written document is excluded in terms of Section 92 of the Evidence Act.
Ishwar Dass Jain (Dead) Through LRs v. Sohan Lal (Dead) by LRs AIR 2000 SC 426 in which the Apex Court has held that oral evidence is admissible under Section 92 (1) of the Evidence Act to prove that the document, though executed, was not intended to be acted upon and that it was a sham document, executed only as a collateral security.
SHAM SALE DEED ALLEGATION - CONTENDING TO HAVE NOT ACTED UPON
Sadasivam v. K. Doraisamy AIR 1996 SC 1724, JT 1996 (2) SC 400 in which the Apex Court has held that sale deed kept in the custody of the plaintiff alleging that the sale deed was sham and was not acted upon, and it was an invalid document being executed without any consideration on an understanding between the parties that it would not be acted upon, is a sham document.
WHAT IS DOCUMENTS OF TITLE AND TITLE DEEDS
V.E.R.M.A.R. Chettyar Firm v. Ma Joo Teen ((1933) I.L.R. 11 Rang. 239, 253.). The main question decided in that case was, what did the terms "documents of title" and "title-deeds" denote? The Court held that they denoted such a document or documents as show a prima facie or apparent title in the depositor to the property or to some interest therein. But what is relevant for the present purpose is that the learned Chief Justice, who spoke for the Court, after considering the leading judgments on the subject, observed: "If the form of the documents of title that have been delivered to the creditor is such that from the deposit of such documents alone the Court would be entitled to conclude that the documents were deposited with the intention of creating a security for the repayment of the debt, prima facie a mortgage by deposit of title-deeds would be proved; although, of course, such an inference would not be irrebuttable, and would not be drawn if the weight of the evidence as a whole told against it."
IMPORTANT CASE LAW OBSERVATIONS
JUSTICE SUBBARAO, K. AND JUSTICE MUDHOLKAR, J.R. of The Supreme Court of India in the case of K.J.Nathan vs S. V. Maruty Reddy And Others 1965 AIR 430, 1964 SCR (6) 727 “……..under the Transfer of Property Act a mortgage by deposit of title deeds is one of the modes of creating a legal mortgage whereunder there will be transfer of interest in the property mortgaged to the mortgagee. This distinction will have to be borne in mind in appreciating the scope of the English decisions cited at the Bar. This distinction is also the basis for the view that for the purpose of priority it stood on the same footing as a mortgage by deed. Indeed a proviso has been added to s. 48 of the Registration Act by Amending Act 21 of 1929. It says: "Provided that a mortgage by deposit of title deeds as defined in section 58 of the Transfer of Property Act, 1882, shall take effect against any mortgage-deed subsequently executed and registered which relates to the same property."”
JUSTICE SUBBARAO, K. AND JUSTICE MUDHOLKAR, J.R. of The Supreme Court of India in the case of K.J.Nathan vs S. V. Maruty Reddy And Others 1965 AIR 430, 1964 SCR (6) 727 “……Transfer of Property Act a mortagage by deposit of title- deeds is one of the forms of mortgages whereunder there is a transfer of interest in specific immovable property for the purpose of securing payment of money advanced or to be advanced by way of loan. Therefore, such a mortgaae of property takes effect against a mortgage deed subsequently executed and registered in respect of the same property. The three requisites for such a mortality are, (1) debt, (ii) deposit of title-deeds; and (iii) an intention that the deeds shall be security for the debt.”
JUSTICE SUBBARAO, K. AND JUSTICE MUDHOLKAR, J.R. of The Supreme Court of India in the case of K.J.Nathan vs S. V. Maruty Reddy And Others 1965 AIR 430, 1964 SCR (6) 727 “10. ......Whether there is an intention that the deeds shall be security for the debt is a question of fact in each case. The said fact will have to be decided just like any other fact on presumptions and on oral, documentary or circumstantial evidence. There is no presumption of law that the mere deposit of title deeds constitutes a mortgage, for no such presumption has been laid down either in the Evidence Act or in the Transfer of Property Act. But a court may presume under S.114 of the Evidence Act that under certain circumstances a loan and a deposit of title deeds constitute a mortgage. But that is really an inference as to the existence of one fact from the existence of some other fact or facts. Nor the fact that at the time the title deeds were deposited there was an intention to execute a mortgage deed in itself negatives, or is inconsistent with, the intention to create a mortgage by deposit of title deeds to be in force till the mortgage deed was executed.......”
Justice G Mitter, Justice P J Reddy, Justice S.M.Sikri of Supreme Court of India in the case of Deb Dutta Seal vs Ramanlal Phumra And Ors. Reported in AIR 1970 SC 659, (1969) 3 SCC 821, The cases on this point are legion but the principles of law have been stated over and over again in various decisions of the Judicial Committee of the Privy Council and of this Court, not to speak of the innumerable decisions of various High Courts. The principles of law are quite clear and were summarised as follows in Pranjivandas Mehta v. Chan Ma Phee, 43 Ind App 122 at p. 125 : AIR 1916 PC 115 at p. 116:
(1) Where titles of property are handed over with nothing said except that they are to be security, the law supposes that the scope of the security is the scope of the title.
(2) Where, however, titles are handed over accompanied by a bargain, that bargain must Rule.
(3) Lastly, when the bargain is a written bargain, it, and it alone, must determine what is the scope and extent of the security.
Justice G Mitter, Justice P J Reddy, Justice S.M.Sikri of Supreme Court of India in the case of Deb Dutta Seal vs Ramanlal Phumra And Ors. Reported in AIR 1970 SC 659, (1969) 3 SCC 821, the judges have evolved following propositions of law after citing so many precedents:-
(a) The facts and circumstances attendant on the deposit of title deeds and the execution of the memorandum must be considered as a whole.
(b) If the transaction of deposit of title deeds with intent to create a security be completed before the parties have a memorandum, registration of the document is not required unless as in Hari Sankar Paul's case (supra) the parties proceed to create a mortgage over again in writing.
(c) The form and text of the memorandum although of paramount importance are not conclusive.
(d) If the memorandum does not contain all the terms necessary to give it efficacy as a contract of mortgage no registration is necessary.
(e) If the evidence shows that the memorandum was executed with the intention that it should be the repository of the bargain between the parties then the document alone can be looked into. In the absence of registration, the bargain cannot be proved.
(f) The deposit of title deeds contemporaneously with the execution of the memorandum containing the terms of mortgage gives a strong indication of the document being considered as the bar gain between the parties.
WHAT IS MEANT BY DOCUMENTS OF TITLE
Division Bench of Kerala High Court in Syndicate Bank v. Modern Tile and Clay Works, 1980 Ker LT 550. In that case, Janaki Amma J. speaking for the Bench said as follows: "By "documents of title" we mean the legal instruments which prove the right of a person in a particular property. Evidence supplied by documents may in some Cases be conclusive while in other cases it may be insufficient in proving the title or the right claimed. When a person who is acclaimed and recognised by law as the owner of property transfers his rights by an instrument which satisfies all the requirements of law, the instrument of transfer is a title deed in respect of the property so far as the transferee is concerned. The document may amount to conclusive proof of such transfer. Oh the other hand a document may be of such a kind that it tends to prove such transfer of right but is not conclusive of a transfer of ownership. Thus a receipt for payment of revenue may not be conclusive proof of the ownership of the person in whose name it is issued even though the liability to pay revenue is on the owner. This is because in practice revenue is received by the concerned authorities from a person even without an enquiry whether he is the owner of the property. A revenue receipt is therefore insufficient evidence to prove title to property and is therefore not by itself a document of title.....................A parity of reasoning applies in the case of a copy of deed of transfer. A copy of a deed of transfer is not ordinarily a document of title for the purposes of an equitable mortgage. It is the original deed of transfer that is the document of title. This is because the rules for the issue of copies permit the obtaining of copies by an owner even while he is in possession of the original document of title. To hold that a copy of a deed of transfer is also a document of title for purposes of Section 58(f) of the Transfer of Property Act would amount to giving facilities to the owner to misuse the provision. He may get an advance from one person by delivering the original document of title and then use the copy of the document for getting an advance from some other who may riot be aware of the earlier equitable mortgage. It should be the policy of law to see that such contingencies are avoided. At the same time there may be cases where the original document is lost and there are no chances of that document being made use of for any purpose . In the absence of the original deed of transfer the next best evidence of the owner's title to the property is a certified copy of that document. A certified copy in such cases may with sufficient safeguards be received as a document of title. The essential prerequisite for the use of a certified copy as a document of title is the loss of the original deed. Unless and until it is made out that the original is lost, a certified copy of a document cannot be considered to be a document of title for the purpose of Section 58(f) of the Transfer of Properly Act.
IN WRITTEN CONTRACT - IMPLIED NOTIONS ARE EXCLUDED – DOCUMENTARY VERSION THROWS OUT ORAL EVIDENCE
In 'United Bank of India Ltd. V. M/s Lekharam Sonaram & Co. and others AIR 1965 SC 1591 ' the Apex Court held as follows: "A mortgage by deposit of title deeds is a form of mortgage recognized by S.58(f) of the Transfer of Property Act which provides that it may be effected in, certain towns (including Calcutta) where a person "delivers to a creditor of his agent documents of title to immovable property with intent to create a security the law implies a contract between the parties to create a mortgage and no registered instrument is required under S.59 as in other classes of mortgage. It is essential to bear in mind that the essence of a mortgage by deposit of title deeds is the actual handing over by a borrower to the lender of documents of title to immovable property with in the intention that those documents shall constitute a security which will enable the creditor ultimately to recover the, money which he has lent. But if the parties choose to reduce the contract to writing, this implication of law is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage. It follows that in such a case the document which constitutes the bargain regarding securing require registration under S.17 of the Indian Registration Act, 1908as a non-testamentary instrument creating an interest in immoveable property, where the value of such property is one hundred rupees and upwards. If a document of this character is not registered it cannot be used in the evidence at all and the transaction itself cannot be proved by oral evidence either".
WHEN ORIGINAL DEEDS ARE LOST
AIR 1982 Andhra Pradesh 272 (Kanigalla Prakasa Rao vs. Nanduri Ramakrishna Rao and others) “……………. The owners of property who have so their documents of title will, therefore, be not in a position to deliver such original documents with intent to create an equitable mortgage. It will be rather anomalous if such persons can validly execute registered documents of sale, lease and mortgage, but will not be entitled to raise any monies by creating an equitable mortgage. If the original title deeds are lost, we do not see why the owner of the property should not be in a position to an equitable mortgage. The mortgagee in such cases has only to be vigilant in accepting such representation made to him and should make the necessary enquiries before agreeing to advance any monies on the basis of registration extracts of documents of title or copies of documents. That seems to be the underlying principle behind S.78 of the Transfer of Property Act which provided that if the conduct of a prior mortgagee amounted to gross neglect, the mortgage in his favour will be postponed to the subsequent mortgagee.”
AIR 1974 Madras 16 (V.61, C.8) (Angu Pillai and others vs. M.S.M.Kasiviswanathan Chettiar and others "16. The decision of the Rangoon High Court in AIR 1933 Rang 299 upon which the trial Judge relied was overruled by a Full Bench of the Rangoon High Court in Chidambaram Chettyar v. Aiz Mean, AIR 1938 Rang 149 (FB). This Full Bench decision unfortunately does not appear to have been brought to the notice of the trial Judge. The Full Bench has reviewed the English and Indian authorities and has pointed put that in order to create a valid mortgage, it is not necessary that the whole, or even the most material of the documents of title to the property should be deposited; nor that the documents deposited should show a complete or good title in the depositor and it is sufficient if the deeds deposited bona fide relate to the property or are material evidence of title or are shown to have been deposited with the intention of creating a security thereon.
Venkataramayya v. Narasinga Rao (1911) 21 Mad LJ 454 in support of his argument that even the deposit of sale deed in certain circumstances would not be sufficient to create an equitable mortgage. In that case, the debtor deposited a sale deed in the name of his father who had made a gift of the property in favour of his grandson by a deceased son. The property was admittedly the self acquired property of the father of the first defendant in that case. The question arose whether the deposit of that sale deed was sufficient to constitute a valid equitable mortgage. The Bench pointed out that the only document that was deposited did not show any kind of title in the depositor to the property as it was not a sale deed in his name but was a sale deed in the name of his father and that, therefore, no valid equitable mortgage was created.
AIR 2002 Madras 378 (M.M.T.C.limited vs. S.Mohamed Gani and another) “........................ In order to prove the existence of an equitable mortgage, the following requisites are necessary: 1. A debt, 2. a deposit of title deeds and 3. an intention that the deeds shall be security for the debt. The debt may be an existing debt or a future debt. The debt may be an existing debt or a future debt. Insofar as the deposit of title deeds is concerned, physical delivery of document is not the only mode of deposit and even the constructive delivery has been held sufficient. It is sufficient if the deeds deposited bona fide relate to the property or are any material evidence of title and are shown to have been deposited with an intention to create a security thereon. The essence of the whole transaction of equitable mortgage by deposit of title deeds is the intention that the title deeds shall be the security for the debt. Whether the said requisite intention is available in a given case is a question of fact and has to be ascertained after considering the oral, documentary and circumstantial evidence. It is true the mere fact of deposit does not raise the presumption that such an intention existed. Such an intention cannot be presumed from the possession since the mere possession of the deeds is not enough without evidence as to the manner in which the possession originated, so that an agreement may be inferred. Even the mere possession of the deeds by the creditor coupled with the existence of a debt need not necessarily lead to the presumption of a mortgage. The mere fact that the documents were coming from the custody of the plaintiff is not by itself sufficient to prove an intent to create a security. But in a given case unless and until the defendants satisfactorily explain how the documents came to the plaintiffs custody the said fact would be insignificant and have a great bearing”.
DOCUMENT SHOULD BE READ AS A WHOLE FOR ITS INTERPRETATION
Syed Abdulkhader vs Rami Reddy & Ors 1979 AIR 553, 1979 SCC (2) 601 A document will be considered as a whole for interpretation of particular words or directions. An ordinary authority given in one part of the instrument will not be cut down because there are ambiguous and uncertain expressions elsewhere. A power of wide amplitude conferring wide authority cannot by construction be narrowed down to deny an authority which the donor expressly wanted to confer.
Gurubasappa And Ors. vs Gurulingappa AIR 1962 Mys 246, ILR 1961 KAR 878 In deciding this question, it would be necessary to consider the true scope and effect of sections 91 and 92 of the Evidence Act. Chapter VI of the Evidence Act which begins with section 91 deals with the exclusion of oral evidence by documentary evidence, section 91 of the Act provides: "When the terms of a contract, or a grant, or of any other disposition of property, have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions herein before contained". The normal rule is that the contents of a document must be proved by primary evidence which is the document itself in original. Section 91 is based on what is described as best evidence rule. The best evidence about the contents of a document is the document itself and it is the production of the document that is required by section 91 in proof of its contents. In a sense the rule enumerated by section 91 can be said to be an exclusive rule inasmuch as it excludes the admission of oral evidence for proving the contents of a document except in cases where secondary evidence is allowed to be led under the relevant provisions of the Evidence Act. Section 92 of the Evidence Act runs as follows: "When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to or subtracting from, its terms". It is manifest that section 92 excludes the evidence of oral agreement and it applies to cases where the terms of a contract, grant or other disposition of property have been proved by the production of the relevant documents themselves under section 91 of the Act. In other words, after the document had been produced to prove its terms under section 91, the provisions of section 92 of the Act come into operation for the purposes of excluding the evidence of any oral agreement or the statement for the purpose of contradicting, varying, adding to or subtracting from its terms. It would be noticed that sections 91 and 92 are in effect supplementary to each other. Section 91 would be frustrated without the aid of section 92 and section 92 would be inoperative without the aid of section 91. Since section 92 excludes the admission of oral evidence for the purpose of contradicting, varying, adding to or subtracting from the terms of the document properly proved under section 91, it may be said that it makes the proof of the document conclusive of its contents. Like section 91, section 92 can be said to be based on best evidence rule.
Bhinka And Others vs Charan Singh 1959 AIR 960, 1959 SCR Supl. (2) 798 " The Court shall presume to be genuine every document purporting to be a certificate.......... which is by law declared to be admissible as evidence of any particular fact, and which purports to be duly certified by any officer -of the Central Government or of a State Government................................................ Provided that such document is substantially in the form and purports to be executed in the manner directed by law in that behalf. The Court shall also presume that any officer by whom any such document purports to be signed or certified, held, when he signed it, the official character which he claims in such paper ". Under this section a Court is bound to draw the presumption that a certified copy of a document is genuine and also that the officer signed it in the official character which he claimed in the said document. But such a presumption is permissible only if the, certified copy is substantially in the form and purported to be executed in the manner provided by law in that behalf.
C.H. Shah vs S.S. Malpathak And Ors. AIR 1973 Bom 14, Section 79 only raises a rebuttable presumption with regard to the genuineness of certified copies and that too only if they are executed substantially in the form and in the manner provided by law. ……………………..Section 79, as laid down by the Supreme Court in Bhinka's case already referred to above it must be shown that the certified copy was executed substantially in the form and in the manner provided by law. There would, therefore, be a check or safeguard in so far as the officer certifying it in the manner required by law would have to satisfy himself in regard to the authenticity of the original and in regard to the accuracy of the copy which he certifies to be a true copy thereof. On the other hand if the original of a public document is to be admitted in evidence without proof of its genuineness, there would be no check whatever either by way of scrutiny or examination of that document by an officer or by the Court.
A PARTY TO AN INSTRUMENT CANNOT BE A VALID ATTESTING WITNESS TO THE SAID INSTRUMENT
Laxmibai (Dead) Thru Lrs. & Anr. vs Bhagwanthbuva (Dead) Thru Lrs 2013 (2 ) JT 362 = 2013 (2 ) SCALE 106 A party to an instrument cannot be a valid attesting witness to the said instrument, for the reason, that such party cannot attest its own signature. (Vide: Kumar Harish Chandra Singh Deo & Anr. v. Bansidhar Mohanty & Ors., AIR 1965 SC 1738). … A document must be construed, taking into consideration the real intention of the parties. The substance, and not the form of a document, must be seen in order to determine its real purport.
INTENTION MUST PRIMARILY BE GATHERED FROM THE MEANING OF THE WORDS USED IN THE DOCUMENT
In Delta International Limited v. Shyam Sundar Ganeriwalla & Anr., AIR 1999 SC 2607, this Court held that the intention of the parties is to be gathered from the document itself. Intention must primarily be gathered from the meaning of the words used in the document, except where it is alleged and proved that the document itself is a camouflage. If the terms of the document are not clear, the surrounding circumstances and the conduct of the parties have also to be borne in mind for the purpose of ascertaining the real relationship between the parties. If a dispute arises between the very parties to the written instrument, then intention of the parties must be gathered from the document by reading the same as a whole.
In Vodafone International Holdings B.V v. Union of India & Anr., (2012) 6 SCC 613, while dealing with a similar situation, this Court held: “The Court must look at a document or a transaction in a context to which it properly belongs to. While obliging the court to accept documents or transactions, found to be genuine, as such, it does not compel the court to look at a document or a transaction in blinkers, isolated from any context to which it properly belongs. If it can be seen that a document or transaction was intended to have effect as part of a nexus or series of transactions, or as an ingredient of a wider transaction intended as a whole, there is nothing in the doctrine to prevent it being so regarded; to do so in not to prefer form to substance, or substance to form. It is the task of the court to ascertain the legal nature of any transaction to which it is sought to attach a tax or a tax consequence and if that emerges from a series or combination of transactions intended to operate as such, it is that series or combination which may be regarded.”
T.L. Nagendra Babu vs Manohar Rao Pawar ILR 2005 KAR 884 Presumption operates in favour of the party relying on a document, provided he must prove that the document is duly executed and authenticated.
WHEN SOURCE OF TITLE IS NOT DISCLOSED – MERE STATEMENT WITHOUT PROOF OF DOCUMENT AS TO SOURCE OF TITLE IS NOT RELEVANT
Prabhakar Adsule vs State Of M.P. & Anr 2004 AIR 3557 = 2004 (11 ) SCC 249 In the plaint the source of Somaji's title was not disclosed and it was merely stated that he was owner of the disputed land and the same was coming in his possession since 1918. In his statement in Court, the plaintiff came out with a case that the land had been given by way of grant. However, the plaintiff did not lead any kind of evidence to prove the factum of grant. No document was produced to show that the land had been given by way of grant either to Somaji or to his ancestors.
Bench: N Kumar in M.A. Sreenivasan vs H.V. Gowthama And Anr. ILR 2005 KAR 1138 Therefore the law on the point is well settled. The probate Court will not go into question of title of the property which is bequeathed under the will. It is totally outside the scope of enquiry in a probate proceedings. If the testator has a right in the property the beneficiary gets that right on the death of the testator under the will. Grant of probate do not divest any person of his title to the property not vest title in the beneficiary under the Will. The scope of enquiry in a probate proceedings is only to find out whether the will sought to be probated has been duly executed by the testator and is proved in accordance with law and the statutory requirements under the Act have been complied with. Therefore grant of probate in no way affects the right of the person who claims title to the property independently or adverse to the interest of the testator. It does not decide any question of title or the existence of the property itself.
Hon'ble Supreme Court as reported in Chandradhar Goswami & Ors. v. The Gauhati Bank Ltd., ,... 1967 AIR 816, 1967 SCR (1) 921" Section 4 of the Bankers' Books Evidence Act (18 of 1891) certainly gives a special privilege to banks and allows certified copies of their accounts to be produced by them and those certified copies become prima facie evidence of the existence of the original entries in the accounts and are admitted as evidence of matters, transactions, and accounts therein. But such admission is only where and to the extent as the original entry itself would be admissible by law and not further or otherwise. Original entries alone under S.34 of the Evidence Act would not be sufficient to charge any person with liability and as such, copies produced under s.4 of the Bankers' Books Evidence Act could not charge any person with liability. ……….. Original entries alone under s. 34 of the Evidence Act would not be sufficient to charge any person with liability and as such copies produced under s. 4 of the Bankers' Books Evidence Act obviously cannot charge any person with liability. Therefore, where the entries are not admitted it is the duty of the bank if it relies on such entries to charge any person with liability, to produce evidence in support of the entries to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence. But no person can be charged with liability on the basis of mere entries whether the entries produced are the original entries or copies under s. 4 of the Banker's Books Evidence Act. "
In Zenna Sorabji and others Vs. Mirabelle Hotel Co.(Pvt.) Ltd. and others, AIR 1981 Bom 446 , ........"In order that a document could be relied upon as a book of account, it must have the characteristic of being fool-proof. A bundle of sheets detachable and replaceable at a moment's pleasure can hardly be characterised as a book of account. Moreover what Section 34 demands is a book of account regularly maintained in the course of business. A ledger by itself could not be a book of account of the character contemplated by Section 34."
Hon'ble Supreme Court in Ramji Dayawala & Sons (P) Ltd. v. Invest Import, 1981 AIR 2085, 1981 SCR (1) 899, ......" Undoubtedly, mere proof of the handwriting of a document would not tantamount to a proof of all the contents or the facts stated in the document, if the truth of the facts stated in a document is in issue mere proof of the handwriting and execution of the document would not furnish evidence of the truth of the facts or contents of the document. The truth or otherwise of the facts or contents so stated would have to be proved by admissible evidence i.e. by the evidence of those persons who can vouchsafe for the truth of the facts in issue."
A party cannot claim anything more than what is covered by the terms of contract, for the reason that contract is a transaction between the two parties and has been entered into with open eyes and understanding the nature of contract. Thus, contract being a creature of an agreement between two or more parties, has to be interpreted giving literal meanings unless, there is some ambiguity therein. The contract is to be interpreted giving the actual meaning to the words contained in the contract and it is not permissible for the court to make a new contract, however is reasonable, if the parties have not made it themselves. It is to be interpreted in such a way that its terms may not be varied. The contract has to be interpreted without giving any outside aid. The terms of the contract have to be construed strictly without altering the nature of the contract, as it may affect the interest of either of the parties adversely. (Vide: United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, AIR 2004 SC 4794; Polymat India P. Ltd. & Anr. v. National Insurance Co. Ltd. & Ors., AIR 2005 SC 286).
In DLF Universal Ltd. & Anr. v. Director, T. and C. Planning Department Haryana & Ors., AIR 2011 SC 1463, this court held:
“It is a settled principle in law that a contract is interpreted according to its purpose. The purpose of a contract is the interests, objectives, values, policy that the contract is designed to actualise. ?It comprises joint intent of the parties. Every such contract expresses the autonomy of the contractual parties’ private will. It creates reasonable, legally protected expectations between the parties and reliance on its results. Consistent with the character of purposive interpretation, the court is required to determine the ultimate purpose of a contract primarily by the joint intent of the parties at the time the contract so formed. It is not the intent of a single party; it is the joint intent of both parties and the joint intent of the parties is to be discovered from the entirety of the contract and the circumstances surrounding its formation. As is stated in Anson's Law of Contract, "a basic principle of the Common Law of Contract is that the parties are free to determine for themselves what primary obligations they will accept...Today, the position is seen in a different light. Freedom of contract is generally regarded as a reasonable, social, ideal only to the extent that equality of bargaining power between the contracting parties can be assumed and no injury is done to the interests of the community at large." The Court assumes "that the parties to the contract are reasonable persons who seek to achieve reasonable results, fairness and efficiency...In a contract between the joint intent of the parties and the intent of the reasonable person, joint intent trumps, and the Judge should interpret the contract accordingly.”
The phrase, “as is-where-is”, has been explained by this Court in Punjab Urban Planning & Development Authority & Ors. v. Raghu Nath Gupta & Ors., (2012) 8 SCC 197, holding as under: “We notice that the respondents had accepted the commercial plots with open eyes, subject to the abovementioned conditions. Evidently, the commercial plots were allotted on “as-is-where-is” basis. The allottees would have ascertained the facilities available at the time of auction and after having accepted the commercial plots on “as-is- where-is” basis, they cannot be heard to contend that PUDA had not provided the basic amenities like parking, lights, roads, water, sewerage, etc. If the allottees were not interested in taking the commercial plots on “as-is-where- is” basis, they should not have accepted the allotment and after having accepted the allotment on “as-is-where-is” basis, they are estopped from contending that the basic amenities like parking, lights, roads, water, sewerage, etc. were not provided by PUDA when the plots were allotted…”
DOCUMENT MUST BE READ IN ITS ENTIRETY AND THAT THE INTENTION OF THE PARTIES MUST BE GATHERED FROM THE DOCUMENT ITSELF
In P.S.Ranakrishna Reddy vs. M.K.Bhagyalakshmi and another {2007 (10) SCC 231}, a contention was raised that the transaction was a loan transaction and not an Agreement of Sale. But the said contention was rejected by the Supreme Court on the ground that the document in question was described as an Agreement of Sale; that the Agreement disclosed negotiations between the parties and that no part of the Agreement contained an indication that it was not intended to be acted upon. Therefore in paragraph-13, the Court reiterated the well settled principle that a document must be read in its entirety and that the intention of the parties must be gathered from the document itself. The Court further held that a default clause contained in the document would not make it a contract of loan.
MERE PRODUCTION AND MARKING OF A DOCUMENT AS EXHIBIT BY THE COURT CANNOT BE HELD TO BE A DUE PROOF OF ITS CONTENTS
Narbad Devi Gupta Vs. Birendra Kumar Jaiswal JT (2003) 8 SC 267 laying down that mere production and marking of a document as exhibit by the Court cannot be held to be a due proof of its contents till its execution has been proved by admissible evidence i.e. by the evidence of those persons who can vouchsafe for the truth of the facts in issue;
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