Case Note & Summary
The appeal arises from a judgment/decree dated 17/10/2005 in Special Civil Suit No.55/99/III (old) by the Civil Judge, Senior Division, Canacona, decreeing the suit filed by respondent no.1 (plaintiff) against the appellant (defendant no.5, The Goa State Co-operative Bank Ltd.) and other defendants. The suit property, surveyed under No.297/3 of Village Loliem, Canacona Taluka, was purchased by defendant no.8 Milagrina Fernandes on 1/02/1959 during her marriage with Luis Fernandes, who died on 6/04/1973. After his death, the property devolved upon his heirs: widow Milagrina (defendant no.8), son Mario (defendant no.6), daughter-in-law Judicia (defendant no.7), and daughters including plaintiff Olinda Fernandes (respondent no.1), Alda Fernandes (defendant no.9), Angela D'Silva (defendant no.10), and Maria Fernandes (defendant no.11). On 30/09/1985, defendant nos.6, 7, and 8 mortgaged the property to the appellant bank to secure a loan of Rs.1,50,000. Subsequently, on 30/09/1988, they created another mortgage for an additional loan of Rs.50,000. The bank filed a recovery suit and obtained a decree, leading to the property being put to auction. The plaintiff filed the suit seeking a declaration that the mortgages were not binding on her as she was not a party, and for redemption of the property. The trial court decreed the suit, holding that the mortgages were not binding on the plaintiff and that she was entitled to redeem the property. The bank appealed. The High Court framed two main issues: whether the bank could consolidate the two mortgages under Section 67A of the Transfer of Property Act, 1882, and whether the mortgage by limited owners was binding on the reversioners. The court held that a co-operative bank is not a 'person' under Section 67A, and thus cannot consolidate mortgages. Further, the mortgage by the widow, son, and daughter-in-law (limited owners) without legal necessity is not binding on the reversioners (daughters). The plaintiff, as a reversioner, is entitled to redeem the mortgage only to the extent of the mortgagors' interest. The court allowed the appeal in part, setting aside the trial court's decree and directing the plaintiff to pay the proportionate amount to redeem the property.
Headnote
A) Transfer of Property Act - Section 67A - Right to Consolidate Mortgages - Co-operative Bank Not a 'Person' - The court held that a co-operative bank is not a 'person' under Section 67A of the Transfer of Property Act, 1882, as the provision uses the word 'mortgagor' and 'mortgagee' in the context of natural persons, and the Co-operative Societies Act, 1912 does not confer such power. The bank cannot consolidate two separate mortgages into one and claim a single right of redemption. (Paras 7-10) B) Hindu Succession Act - Limited Owner - Mortgage by Widow, Son, and Daughter-in-Law - Not Binding on Reversioners - The court held that defendant no.8 (widow), defendant no.6 (son), and defendant no.7 (daughter-in-law) were limited owners of the property after the death of Luis Fernandes. Their mortgage of the property without legal necessity is not binding on the reversioners (daughters/plaintiff and other daughters). The plaintiff, as a reversioner, is entitled to redeem the mortgage only to the extent of the interest of the mortgagors. (Paras 11-14) C) Transfer of Property Act - Section 60 - Right of Redemption - Reversioner's Right - The court held that a reversioner can redeem a mortgage created by a limited owner, but only to the extent of the limited owner's interest. The plaintiff, being a daughter and reversioner, is entitled to redeem the mortgage by paying the proportionate amount attributable to the mortgagors' share. (Paras 15-17)
Issue of Consideration
Whether a co-operative bank is a 'person' within the meaning of Section 67A of the Transfer of Property Act, 1882, and whether a mortgage created by limited owners (widow, son, daughter-in-law) without legal necessity is binding on the reversioners (daughters) of the deceased husband.
Final Decision
Appeal allowed in part. The judgment/decree of the trial court dated 17/10/2005 is set aside. The plaintiff is entitled to redeem the mortgage only to the extent of the interest of the mortgagors (defendant nos.6,7,8) by paying the proportionate amount. The bank is directed to accept the redemption amount and release the property. No order as to costs.
Law Points
- Co-operative Bank not a 'person' under Section 67A of Transfer of Property Act
- 1882
- Mortgage by limited owners not binding on reversioners without legal necessity
- Section 67A TPA applies only to natural persons
- Co-operative Societies Act 1912 does not confer power to consolidate mortgages
