NARANDAS KARSONDAS versus S. A. KAMTAM & ANR.

Citation: [1977] 2 S.C.R. 341 · Decided: 07-12-1976 · Supreme Court of India · Bench: A.N. RAY · Disposal: Dismissed

Cited by 5 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

341 
NARANDAS KARSONDAS 
v. 
S. A. KAMTAM & ANR. 
December 7, 1976 
[A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.] 
Trans/el' of Property Act 1882-Sec. 5, 54 and 69-Meaning of transfcr-
Sale-Power of sale without intervention of Court-Whether extinguishes the 
right of redemption-India'< Registration Act 1908-Sec. 17-Whether equity of 
redemption can be lost without execution of a registered document-Indian Con-
tract Act 1872-Sec. 202-Power coupled with interest,--Whether can be revok-
ed-After power i;f acted upon-Law of Property Act 1925-Sec. 100(1)(i)-
Distinction between legal ·and equitable estate unde:r English Law-Position under 
Indian law: 
In 1964, respondent No. 1 Society was registered as a Housing Society. The 
Society wanted 12 plots to be constructed for its 12 members. 
The Society, 
therdore, purchased a plot of land. In 1966, the Society mortgaged the land 
and the incomplete structure in favour of respondent No. 2. 
In March, 1971, 
A 
B 
c 
the Special Liqqidator of the Society was appointed under s. 102 of the Maha-
rashtra Co-operative Societies Act, 1960. The mortgagee after demanding the 
D 
dues from the mortgagor advertised the public auction for the sale of the pro· 
perty. In the auction sale the appellant was declared as the highest bidder. The 
auction purchaser took the possession of the land and the incomplete structure. 
Society filed a dispute before the Officer on Special Duty under the Maha-
rashtra Co-operative Societies Act against the auction purchaser and (he mort-
gagee praying for an injunction against the completion of the sale. The Society 
in the meanwhile paid the mortgage money to the mortgagc;e. The Officer on 
Special Duty delivered his judgment in January 1975 and held that the Society 
E 
was entitled to redeem the property because the conveyance was not complete. 
The appellant filed an appeal before the Maharashtra State Cooprative Appellate 
Court. In the appeal, plaint was allowed to be amended and a pryaer tor re-
demption was allowed to be introduced. 
The appellate Court held that there 
was no complete sale within the ·meaning of section 69(3) of the Transfer of 
·' 
Property Act 1882 and the equity of redemption was, thmfore, not lost and that 
the auction price was grossly inadequate and that the sale was not after a fair 
~ 
competition. 
One of the conditions of auction sale was that if the mortgagor ' 
F 
-
deposited the mortgage money in court between the date of the sale and com-
pletion thereof and if as a result thereof the mortgagee was to reconvey the 
property to the mortgagor the auction purchaser would be entitled to the refund 
of the amount paid without any interest and/ or cost. 
I 
In an appeal by Special Leave . the appellant contended : 
(1) When under s. 69 of the Transfer of Property Act a mortga.[or confers 
on the mortgagee a power of sale through court or without intervention of court, 
G 
the power of sale extends to the entire legal estate of th.e mortgagor. 
(2) When such a power is conferred it is agency coupled with interest under 
s. 202 of the Indian Contract Act 1872. If the power is acted upon revocation 
even on payment of mortgage money cannot nullify acts already done pursuant 
to the said powers. 
· (3) Knocking down at an auction sale by the mortgagee pursuant to the 
power of sale extinguishes the mortgagor's right of redemption. 
, 
H 
( 4) In a suit for specific performance by auction purchaser, the purchaser will 
be entitled to specific performance because it is a sale by mortgagor. 
Dismissing the appeal, 
.A 
B 
.c 
.E 
342 
~>UPREME COURT REPORTS 
(1977] 2 S.C.R. 
HELD: (1) Under section 69(1)(c) a mortgagee has power to sell without 
intervention of the court where power is conferred by the mortgage deed and 
the mortgaged property or any part thereof was on the date of the execution of 
the mortgage deed situated in certain big towns. [347D-E] 
(2) In India the word "transfer" is defined with reference 
to the 
word 
"convey''. 
The word "transfer" in English Jaw in its narrower and more usual 
sense refers to the transfer of an estate in the land. 
Section 205 of the Law 
of Property Act in England defines "conveyance" as including mortgage, charge, 
lease, assent vesting declaration, vesting instrument". 
The word "conveys" in 
section 5 of the Transfer of Property Act and s. 17 of the Indian Registration 
Act is that contract for sale in respect of immovable property of the value of 
more than Rs. 100 

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