Supreme Court: In an appeal challenging the judgment of the Allahabad High Court (‘the High Court’), arising out of the proceedings in execution of a final mortgage decree, the three judges bench of M.C Mahajan, Vivian Bose, and B. Jagannadhadas*, JJ., examined the cross-examination of one Harbanslal relating to the payment of consideration, and opined that the version of the transaction was not credible. It was not clear as to how he found the very large sum of Rs 16,500. Even though Harbanslal stated that he raised Rs. 4000 by sale of ornaments of his mother and the remaining balance from his own pocket. However, his accounts did not show it. The Supreme Court stated that he was not able to give any satisfactory reason for payment of Rs 16,500, six days before the execution of the deed. The payment of cash under the receipt was obviously false and the pronote executed by him in one Jagannath Prasad’s favour was genuine.
Further, the question regarding whether, Respondent 1 paid Rs. 14,000 to Jagannath Prasad as shown by the receipt dated 24-6-1940, was not directly necessary to be decided for these proceedings, because once the receipt executed by Harbanslal on 9-6-1940 was accepted as genuine, the decree obtained by him against Respondent 1 gets adjusted by her payment of Rs. 2000 and by her undertaking the payment of the balance to Jagannath Prasad. Thus, the Supreme Court agreed with the High Court and dismissed the appeals with costs.
Background
In the present case, a businessman, executed a gift deed of his properties in his wife, Respondent 1’s favour. On 25-8-1947, both executed a mortgage deed for Rs. 16,500 in favour of one Manni Ram and his adopted son Jagannath Prasad. Subsequently, both Piare Lal and Manni Ram died and on 12-10-1933, Jagannath Prasad assigned the mortgage in favour of Harbanslal for Rs 16,500. On 6-10-1933, i.e. six days prior to the date of the assignment he executed a receipt, acknowledging payment of consideration. It was alleged that on 12-10-1933 Harbanslal executed a pronote, for the self-same amount in Jagannath Prasad’s favour.
In 1934, Harbanslal filed a mortgage suit against respondents. The suit was decreed, and a preliminary decree was passed on 20-10-1934 for a sum of Rs. 26,074-4-9. Subsequently, an appeal was filed by Respondent 4 to the High Court which was dismissed. Thereafter, on Harbanslal’s application, the final mortgage decree was passed on 16-3-1940.
During the pendency of the appeal in the High Court, Harbanslal executed an assignment of the preliminary decree for Rs 16,500 in favour of Govindi, the mother-in-law of Respondent 1. The deed was presented for registration the same day, but Harbanslal objected to the registration on the ground of non-payment of consideration. However, the document was registered considering his admission of completion and execution of the document. Thereafter, Govindi transferred her rights to Sita Devi, the daughter of Respondent 1. The consideration was a sum of Rs 500 paid in cash and the balance of Rs 16,000 left with Sita Devi for payment to Harbanslal under the deed of assignment dated 4-2-1936.
Subsequently, an application was made against the preliminary decree by the appellant to substitute the name of Govindi in the place of Harbanslal. There was also a similar application by Respondent 1 based on a will from Govindi bequeathing to her the rights under the assigned decree. The High Court, however, rejected both the applications on 8-8-1939 on the ground that no consideration was paid for the assignment.
Thereafter, on 9-6-1940, Sita Devi executed a receipt in Respondent 1’s favour for a sum of Rs. 16,000 stating that the said sum was left with her for payment to Harbanslal under the assignment. On the same date, Harbanslal executed a receipt in Respondent 1’s favour acknowledging payment to himself of Rs. 2000 in cash and containing a direction to Respondent 1 that the balance of Rs 14,000 was to be paid to Jagannath Prasad. Respondent 1 paid this sum to Jagannath Prasad under receipt dated 24-6-1940, but this was disputed by Harbanslal. It was presented for registration on 12-8-1949 and Harbanslal denied execution. However, after the registration enquiry and on proof of execution the receipt was registered on 1-2-1943.
The present case raised the four disputed questions:
(1) Did Jagannath Prasad receive cash under the receipt dated 6-10-1937? or
(2) Was the pronote executed by Harbanslal in favour of Jagannath Prasad for the said sum genuine?
(3) Was the receipt executed by Harbanslal in favour of Respondent 1 on 9-6-1940, genuine? and
(4) Had Jagannath Prasad received the amount paid under the receipt dated 24-6-1940?
Analysis, Law, and Decision
The Supreme Court stated that Harbanslal was the son of Jagannath Prasad’s maternal uncle. He was the Mukhtar-i-am of his father, Manni Ram and during his lifetime received payment of only Rs 20 per mensem. When Manni Ram died, Jagannath Prasad was about 11 or 12 years old, and Harbanslal got the assignment of the mortgage executed when Jagannath Prasad was about 18 or 19 years old. The Supreme Court opined that these circumstances called for a close security of the transaction.
The Supreme Court examined the cross-examination of Harbanslal relating to the payment of consideration and opined that the version of the transaction was not credible. The Supreme Court stated that how he found the very large sum of Rs 16,500. Even though Harbanslal stated that he raised Rs. 4000 by sale of ornaments of his mother and the remaining balance from his own pocket. However, his accounts did not show it. The Supreme Court stated that he was not able to give any satisfactory reason for payment of Rs 16,500, six days before the execution of the deed. The payment of cash under the receipt was obviously false. Therefore, the pronote executed by him in Jagannath Prasad’s favour was genuine.
The Supreme Court noted that the genuineness of receipt executed by Harbanslal in Respondent 1’s favour depended upon the reliability of the definite evidence that had been given in the present case. Mahabir Swarup gave the statement which supported the respondents’ case and there was no particular reason why a man, who was simply a pleader’s clerk in a different village should have come all the way from that village to depose in respondents’ favour. The Supreme Court stated that no substantial circumstance was brought to show why he would depose in respondents’ favour, and there was no reason to reject his evidence.
The Supreme Court stated that it was true that Jagannath Prasad had given contradictory evidence, but his evidence on earlier occasion was to be accepted. His evidence given in support of the execution of the receipt dated 9-6-1940, were not in any way challenged in the cross-examination. Later, he turned hostile to the respondents. He explained that at the earlier stage he was employed under Respondent 1, and on second occasion, he had no obligations to her. However, Jagannath Prasad admitted that by his second statement, he had executed sale deeds in Harbanslal favour in respect of his entire property. Therefore, on second occasion he was completely at the mercy of Harbanslal. Thus, the Supreme Court opined that Jagannath Prasad’s evidence on the first occasion supported by Mahabir Swarup’s evidence had to be accepted. The Supreme Court agreed with the view of the High Court that the receipt dated 9-6-1940 executed by Harbanslal in favour of Respondent 1 containing the direction therein that Respondent 1 was to pay Rs 14,000 to Jagannath Prasad in discharge of the pronote executed by Harbanslal in favour of Jagannath Prasad in 1933 was true.
Further, the question regarding whether, Respondent 1 paid Rs. 14,000 to Jagannath Prasad as shown by the receipt dated 24-6-1940, was not directly necessary to be decided for these proceedings, because once the receipt executed by Harbanslal on 9-6-1940 was accepted as genuine, the decree obtained by him against Respondent 1 gets adjusted by her payment of Rs. 2000 and by her undertaking the payment of the balance to Jagannath Prasad. The Supreme Court stated that there was no reasonable doubt that the amount must be taken to have been paid, since Jagannath Prasad himself admitted it in his statement on the first occasion, to which we are inclined to attach more value for the reasons already given. The recital in the receipt executed by Jagannath Prasad and accepted by him on the first occasion is enough evidence of the payment with reference to the directions contained in the receipt executed by Harbanslal. Therefore, the Supreme Court held that the said payment was proved.
Thus, the Supreme Court agreed with the High Court and dismissed the appeals with costs.
[Sukhdarshan Dayal v. Kasturi Devi, , decided on 02-04-1953]
*Judgment authored by- Justice B. Jagannadhadas
*Note: Execution of mortgage decree
Order 21 of the provides for execution of decrees and orders. Execution of a mortgage decree refers to the enforcement of a court’s judgment or decree concerning a mortgage. It involves actions to recover dues secured by a mortgage on a property, often through sale or recovery of debt. It aims to resolve disputes and uphold legal obligations related to the mortgage agreement. In civil cases involving debts or judgments, a “receipt for payment of satisfaction of decree” serves as a crucial document. It acknowledges that a judgment has fulfilled their financial obligation as per the court’s decree and signifies that the debt or judgment has been satisfied or paid off.
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