Sections Of Transfer Of Property Act Involved In The Case

Section 3: Attestation.

• There must be 2 or more competent witness to attest.
• Each witness must see the executant sign the instrument or receive a personal acknowledgement from the executant that he has signed.
• Each witness must sign the instrument in the presence of executant.
• It is not necessary that for both the witnesses to be present at the same time.
• No particular form of attestation is necessary.

Section 59: It deals with the mode of execution of a mortgage. The mortgage deed
should be properly attested and duly registered.

In the Supreme Court of India
Kumar Harish Chandra Singh Das & Ors. v/s Bansidhar Mohanty & Ors - On 5 May, 1965
Equivalent Citation: Air 1965 (Sc) 1738, 1966 Scr (1) 153
Bench: Mudholkar , J.R. (Author) ,Wanchoo , K. , Shah , J.C.
Advocates: Petitioners Sarjoo Prasad , S.Murty And B.P. Maheshwari
Respondents: A.V.Vishwanatha Sastri And R.Gopalkrishan

Statement Of Facts

• That the mortgage deed in question was executed by the appellant in favour of Jagannath Debata, respondent no. 2 on April 30, 1945, for a consideration of Rs.15,000.
• That the appellant undertook to repay the amount advanced together with interest within one year from the execution of the deed. The appellant, however, failed to do so. Respondent no. 1 therefore instituted the suit out of which this appeal arises.
• That according to respondent no.1 though the money was advanced by him to the appellant he obtained the deed in the name of the second respondent Jagannath Debata because he himself and the appellant were close friends and he felt it embarrassing to ask the appellant to pay interest on the money advanced by him. The Respondent no.1 was himself one of the two attesting witnesses.
• That as the consideration for the mortgagee deed proceeded from him, he claimed the right to sue upon the deed.
• That the third defendant Jagannath Debata disputed the right of respondent no. 1 to institute the suit and claimed that it was he who had advanced the consideration
• His claim was, however, rejected by the trial court and he has remained content with the decree passed by the trial court in favour of respondent no. 1. The trial court decreed the suit of respondent no. 1 with costs.
• Against that decree the appellant alone preferred an appeal before the High Court. The contention raised by the appellant before the Supreme Court were also raised by him before the High Court but were rejected by it.
• The present appeal arises in Supreme Court through the Civil appellate jurisdiction from the judgement and decree dated July 26, 1960 of the Orissa High Court.

Issues

1. Whether the mortgage deed upon which the suit of respondent no.1 was based was validly attested?
2. Whether the respondent no. 1 was entitled to institute the suit out of which this appeal arises?

Contentions Of The Appellant
Pertaining to the 1st issue , Learned counsel, referred some decisions of the High Courts in India. These are Peary Mohan Maiti & Ors. v. Sreenath Chandra[1] Sarur Jigar Begun v. Barada Kanta[2] and Gamati Ammal v. V. S. M. Krishna Iyer[3] . In all these cases, it has been held that a party to a document which is required by law to be attested is not competent to attest the document.

In taking this view reliance has been placed upon the observations of Lord Selborne, L.C., in Seal v. Clarige[4]
"It (i.e., the attestation) implies the presence of some person, who stands by but is not a party to the transaction.

Pertaining to the 2nd issue, Learned counsel referred to the case of Guru Narayan Sheo & ors. v. Sheo Lai Singh & Ors.[5] in which it was held by the Privy Council that the right of a benamidar to sue upon a trsansaction which is ostensibly in his favour was not recognised by several Courts in India. It was contented that in view of this decision it must be held that it is the benamidar alone who could maintain a suit but not the beneficial owner.

Judgement Of Supreme Court

1. Pertaining To Issue No. 1: Whether Valid Attestation Or Not?
   There is no substance in either of the contentions urged on behalf of the appellant. It is no doubt true that there were only two attesting witnesses to the mortgage deed, one of whom was respondent no. 1, that is, the lender himself. Section 59 of the Transfer of Property Act, which, amongst other things, provides that a mortgage deed shall be attested by at least two witnesses does not in terms debar the lender of money from attesting the deed.
   
   Reference was made to Section 3 of Transfer of Property Act which defines the term attested. This definition is similar to that contained in the Indian Succession Act. It was seen that it also does not preclude in terms the lender of money from attesting a mortgage deed under which the money was lent. No other provision of law was brought to the notice of the Hon'ble Supreme Court which debars the lender of money from attesting the deed which evidences the transaction whereunder the money was lent.
   
   The object of attestation is to protect the executant from being required to execute a document by the other party thereto by force, fraud or undue influence. No doubt, neither the definition of 'attested' nor Section 59 of the Transfer of Property Act debars a party to a mortgage deed from attesting it. It must, however, be borne in mind that the law requires that the testimony of parties to a document cannot dispense with the necessity of examining at least one attesting witness to prove the execution of the deed. Inferentially, therefore, it debars a party from attesting a document which is required by law to be attested. Where, however, a person is not a party to the deed there is no prohibition in law to the proof of the execution of the document by that person.
   
   It would follow, therefore, that the ground on which the rule laid down in English cases and followed in India would not be available against a person who has lent money for securing the payment of which a mortgage deed was executed by the mortgagor but who is not a party to that deed. Indeed it has been so held by the Bombay High Court in Balu Ravji Charat v. Gopal Gangadh Dhabu[6] and by the late Chief Court of Oudh in Durga Din & Ors. v. Suraj Bakhsh[7]. In the first of these cases, an argument similar to the one advanced before the Supreme Court was addressed before the Bombay High Court. Repelling it the court observed:
   
   In Seal v. Claridge[8] much relied upon by the appellant's pleader the old case of Svire v. Bell[9], in which the obsolete rule was pushed to its farthest extent, was cited to the Court but Lord Selbome in delivering judgment said:
   What is the meaning of attestation, apart from the Bills of Sale Act, 1878? The word implies the presence of some person who stands by but is not a party to the transaction.' He then referred to Freshly v. Reed[10] and said : 'It follows from that case that the party to an instrument cannot attest it.'
   
   Again in Wichita v. Marquis of Bath[11] at p. 25, the remarks of the Master of the rolls imply that if the plaintiffs Dave and Wickham had not executed the deed as parties but had only signed with the intention of attesting, the provision of the statute requiring two attesting witnesses would have been satisfied."'
   
   In para 5 of the Judgement, the Hon'ble Court held -
   A distinction was thus drawn in this case between a person who is a party to a deed and a person who, though not a party to the deed, is a party to the transaction and it was said that the latter was not incompetent to attest the deed.
   The Court observed that the decision was followed by the Chief Court of Oudh as well. The Hon'ble Court agreed with the view taken by the Bombay High Court.
   
   
2. Pertaining To Issue No. 2: Whether Repondent No. 2 Entitled To Institute A Suit?
   As regards the second question a number of High Courts in India had taken the view that a benamidar could not maintain a suit for the recovery of property standing in his name, beneficial interest in which was in someone else. Benami transactions are not frowned upon in India but on the other hand they are recognised. Indeed Section 84 of the Indian Trusts Act, 1882 gives recognition to such transactions.
   
   Hon'ble Supreme Court referred to the observations made by Sir George Farewell in case of Benami transactions in Bilas Munwar v. Desrai Ranjit Singh[12]:
   
   "It is quite unobjectionable and has a curious resemblance to the doctrine of our English law, that the trust of the legal estate results to the man who pays the purchase money, and this again follows the analogy of our common law, that where a feoffment is made without consideration the use results to the feoffor."
   
   It must follow from this that the beneficial owner of property standing in the name of another must necessarily be entitled to institute a suit with respect to it or with respect to the enforcement of a right concerning the property of a co-sharer. It will follow that a person who takes benefit under the transaction or who provides consideration for a transaction is entitled to maintain a suit concerning the transaction. Thus, where a transaction is a mortgage, the actual lender of money is entitled to sue upon it.
   
   The Court did not accept the reliance of the Learned appellant counsel on the case of Gur Narayan & Ors. v. Sheo Lai Singh & Ors.[13]. It was observed that it was wrongly interpreted by the Appellant Counsel. Indeed, that was never a question which arose for consideration before the Privy Council. Apart from that, on principle the real beneficiary under a transaction cannot be disentitled to enforce a right arising thereunder.

Held
The Hon'ble Supreme Court upheld the decree of the HIGH COURT and held that:

1. The respondent no. 1 was a competent witness and hence, the mortgage deed was validly Attested.
2. The respondent no.1 was entitled to institute a suit.

The Court dismissed the appeal with Costs.

Following Conclusions can be drawn from this judgement
A person who has lent money, for securing the payment of which a mortgage deed was executed by the mortgagor, but who was not a party to the deed, could be an attestor.
When a transaction is a mortgage, the actual lender of the money is entitled to sue upon it.

Appraisal
The Hon'ble Supreme Court in the present case has laid terra firma of its jurisprudence on attestation. The main purpose of attestation is to testify the voluntary execution of the document by the transferor. It has been correctly laid down that it would defy common sense, if a party to a deed could also attest the same. It is obvious that 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. This is a landmark case in which the Hon'ble Supreme Court differentiated between a person who is party to the whole transaction and a person who is a party to the deed.

In the present case, respondent no.1, the lender of money for mortgage (third party) attested the deed. Neither Section 3 nor Section 59 of the Transfer of property Act disentitle the person paying the consideration from validly attesting it. Respondent no. 1 was a party interested in the transaction and a third party to the transaction. So, he was a competent witness for attestation. This case of the Hon'ble Supreme Court was approved and referred to in 2013 in the case of LAXMIBAI(DEAD) THRU Lr's & Ors. v. BHAGWANTHBUVA (dead) Thru lr's[14] . Madras High Court referred to the para 5 of this judgement in the case of VISUWASAM v. V. BALAKRISHNAN[15] in 2011. Furthermore, the respondent was entitled to sue because he was a party interested in the transaction.

Thus, the Hon'ble Supreme Court has discussed the scope, extent and true object of the attestation. It has aptly decided the question of law involved in this case.

Table Of Authorities
Cases:

• Balu Ravji Charat v. Gopal Gangadh Dhabu - 4
• Bilas Munwar v. Desrai Ranjit Singh - 5
• Durga Din & Ors. v. Suraj Bakhsh - 4
• Freshly v. Reed - 4
• Gamati Ammal v. V. S. M. Krishna Iyer - 3
• Gur Narayan & Ors. v. Sheo Lai Singh & Ors - 5
• Laxmibai(Dead) Thru Lr's & Ors. V. Bhagwanthbuva - 6
• Peary Mohan Maiti & Ors. v. Sreenath Chandra - 3
• Sarur Jigar Begun v. Barada Kanta - 3
• Seal v. Claridge - 4
• Svire v. Bell - 4
• Visuwasam V. V. Balakrishnan - 6
• Wichita v. Marquis of Bath - 5

Bibliography

1. https://indiankanoon.org/doc/1389078/ accessed on 27 December, 2020 at 6pm
2. https://www.the-laws.com/Encyclopedia/Browse/Case?CaseId=005691641000&CaseId=005691641000
   accessed on 28 December,2020 at 11 am.
3. RK Sinha, The transfer of property act, Central Law Agency, 2018
4. Poonam Pradhan Saxena, The transfer of Property Act, 3rd edition, Lexis Nexis , 2017
5. Bare Act- The Transfer of Property Act, 1882

End-Notes:

1. 14 C.W.N 1046
2. I.L.R 37 Cal. 526
3. AIR 1954 Mad. 126
4. L.R 7 Q.B.D 516
5. 46 I.A.1
6. 12 I.C. 531
7. I.L.R 7 Lucknow 41 F.D.
8. L.R. 7 Q.B.D. 516
9. 1793 5 T.R. 371
10. (1842) 9 M & W 404
11. (1865) L.R.I Eq. 17
12. 42 I.A. 202 2)5
13. 46 I.A. 1.
14. AIR 2013 SC 1204
15. AIR 2011 SCC OnLine Mad 29926

Written By: Kritika - 4th year student at UILS, Punjab University, Chandigarh