' The case of plaintiff Muhammad Habibullah Siddiqi is that he is owner of House No, 53, II-Street, Phase V, Defence Housing Authority, Karachi, and Defendant No, 1 is a money-lender and in June 1979 the plaintiff approached him for a loan of Rs,3,00,000 which was duly arranged and the plaintiff executed mortgage deed dated 4th June, 1979 creating equitable mortgage in favour of defendant No,1 in respect of the house by depositing his title deeds (the allotment orders in favour of the original allottee and transfer documents in blanks signed by him) and promising to re-pay the loan on or before 4th September, 1979 with permission to defendant No,1 to get the house transferred in his name by filing in the "blanks" in the transfer papers which were also executed by the plaintiff at the same time. The grievance of the plaintiff is that defendant No,1 made himself scarce "on due date for the payment" and, therefore, the loan could not be repaid. Eventually, the plaintiff served notice dated 12-6-1980 on defendant No,1 to receive the payment and return the documents but defendent No,1 repelled the same vide his counsel's reply dated 26th June, 1980.
The plaintiff then learnt that defendant No,1 had already filled in the blanks in transfer documents and transferred the plot in the name of his daughter (defendant No,2). The plaintiff therefore prays for redemption of mortgage on payment of Rs,15,47,865 (Rs,3 lakh as principal amount, liquidated damages of rupees one lakh and other charges and interest @ 15% from 4-9-1979, the date on which the repayment was due, to 3-5-1989 amounting to Rs,15,47,865. The suit was filed on 27th April, 1989.
2. The plaintiff had earlier filed a suit in the High Court for cancellation and return of the mortgage deed (Suit No, 159/81) but it was dismissed in default and the order of dismissal was maintained up to Supreme Court. The plaintiff, however, did not disclose that even prior to Suit No,159/81, he had filed a suit before the Civil Judge, Karachi (Suit No, 2477/80) in which the plaint was rejected under Order 7, Rule 11, C.P.C. on 23-12-1980.
3. Both the defendants have filed a joint written-statement. A preliminary objection was raised that in view of the dismissal of previous suits, this suit was barred under Order 9 (Rule not given) and under Order 2, Rule 2, C.P.C. On facts the making of loan to the plaintiff and execution of the document on 4th September, 1979 was admitted but it was stated that it was a simple agreement and it was denied that it created mortgage by deposit of title deeds. It was also denied that defendant No,1 made himself scarce on the date of payment (4-9-1979) and for considerable time thereafter and it was claimed that the plaintiff avoided payment within time and till he gave notice on 12-6-1980 which was too late. It was admitted that the plot was transferred by defendant No,1 in the name of his daughter/defendant No,2. It was maintained that defendant No,1 rightly appropriated the plot in terms of the agreement. An additional plea was also taken that in previous two suits the plaintiff had taken the plea that the "Agreement" was void and unenforceable and of no legal effect but in the present suit the plaintiff was solely relying on the said document and he could not be suffered to take contradictory pleas.
4. The following consent issues were adopted by the Court on 23-10-1990:-- "(1) Whether the suit is barred under Order 2, Rule 2 or Order 9, Rule 9 of Civil Procedure Code?
(2) Whether the suit plot was equitably mortgaged for Rs,3,00,000, if so to what effect? If so whether the defendant No,1 was entitled to foreclosure?
(3) Whether defendant No,1 avoided to receive the repayment of loan amount, from the plaintiff, if so to what effect?
(4) Whether the plaintiff deposited more than the value of mortgage in Court, and offered to pay five times more to the defendant for redemption to which the defendant refused and his denial was recorded in Court, if so, to what effect?
(5) Whether the defendant No,1 in collusion with defendant No,2 has attempted to transfer or transferred the plot illegally or the defendant No,1 was entitled to transfer the suit plot in his own name or in the name of any other person?
(6) To what right the plaintiff is entitled to and what should the decree be?"
5. It may be mentioned here that on 3rd April 1990 defendant No,2 Mg. Hajra Bai filed Suit No,309 of 1990 against the plaintiff for injunction and damages. In her plaint she claimed to be owner in possession of this very suit-plot and stated that she got this plot from her father (without disclosing whether by sale or gift or otherwise). She alleged that the defendant of her suit (that is, the plaintiff in Suit No,454 of 1989 Muhammad Habibullah Siddiqi) had tried to illegally take possession of the same. She, therefore, sought a permanent injunction restraining him from doing so in perpetuity and also claimed nominal damages in the sum of Re.1.
6. In his written-statement Haji Habibullah Siddiqi denied the title of Mst. Hajra Bai or of her father from whom she claimed to derive her title. He also denied her possession and asserted that he himself had been in possession.
7. In this suit (Suit No,309 of 1990) the following consent issues were adopted the same day when the issues were adopted in the other suit (23-10-1990):--
(1) Who is in possession of the suit land and what is its legal effect?
(2) Whether the defendant through his agents/servants committed trespass in April 1989 and/or 18-3-1990 on the suit plot. If so, whether the plaintiff is entitled to damages and injunction?
8. Evidence was recorded on commission and it was left to the commissioner to record separate evidence in the two suits or common evidence in both but, as observed by the Commissioner in his report, evidence in both the cases was jointly recorded with the consent of learned counsel of the parties.
9. Learned counsel of the parties have been heard. My findings are as follows: FINDING ON ISSUES IN SUIT NO. 454 OF 1989
10. ISSUE NO.1.---According to learned counsel of the plaintiff, the previous suit (No,159 of 1981) was for declaration, injunction and cancellation of the agreement dated 4th September, 1979 whereas the present suit is for redemption of the mortgage and, secondly, the previous suit was not decided on merit and, therefore, the present suit was not barred either under Order 9, Rule 9 or Order 2, Rule 2 and in support of this view he relied upon the following judgments:---
(1) Suraj Rattan Thirani and others v. Azamabad Tea Co. Ltd. and others AIR 1965 SC 295.
(2) Lalnarayan Prasad and another v. Amereshwari Pd. Narain Singh and another AIR 1972 Pat.
242.
(3) Jumma Khan and others v. Mahmood Khan and others 1973 SCMR 289.
(4) Malik Khizar Hayat Khan Tiwana and another v. Mst. Zainab Begum and others PLD 1967 SC 402.
(5) Sultan Ali v. Khushi Muhammad PLD 1983 SC 243.
11. On the other hand learned counsel of defendants Nos.1 and 2 is of the view that both the suits arise out of the same cause of action and to reach that conclusion he relies upon a comparative study of the plaint in this suit with the plaint in the previous suit (Exh.P.1/16) and argued that cause of action in both the suits was same and therefore the present suit was barred under Order 9, Rule 9, C.P.C. and in support of this view relied on PLD 1970 SC 63 Abdul Hakim v. Sadulla Khan. According to him the judgments relied upon by learned counsel of the plaintiff were not relevant to the facts of the present case and could be distinguished from it.
12. I am of the view that it is beyond the scope of this issue to determine whether the document dated 4th September, 1979 (Exh.P-1/1) was a mere agreement or an agreement creating a mortgage by deposit of title deeds.
13. In his reply to the arguments of learned counsel of defendants Nos.1 and 2, learned counsel of the plaintiff relied upon the following three judgments:--
(1) Harishchandra and another v. Kailashchandra and another AIR 1975 Rajasthan 14;
(2) B. Shambumal Gangaram and another v. The State Bank of Mysore AIR 1971 Mysore 156;
(3) Mst. Gulkandi and others v. Prahlad and another AIR 1968 Rajasthan 51.
14. These judgments deal with the applicability of Order 2, Rule 2 and hold that its applicability arises only when it is established that there is one and the same cause of action in the two suits or when the cause of action was split and one part was left out from the first suit but made the basis of the second.
15. It is, however, enough to observe that if the document is held to be a mere agreement, then this suit is barred under Order 9, Rule 9, C.P.C. as well as under Order 2, Rule 2, C.P.C. because the essential basic facts in both the suits are the same as would follow from the observations in AIR 1965 SC 295 but if the document is held to be a mortgage-deed, then this suit would not be so barred in view of the observations in AIR 1972 Pat. 242 wherein it is held that a mortgagor has a recurring cause of action and the plaintiff has a fresh cause of action every moment. This view also gets support from the judgment in PLD 1983 SC 243. The issue is, therefore, decided in the above terms and it is held that the outcome of this issue depends upon the outcome of Issue No,2.
16. ISSUE NO.2. According to the plaintiff the agreement dated 4th September 1979 Exh.P.1/1 was a mertgage-deed creating a mortgage by deposit of title-deeds. The reply of the defendants vide para. 3 of the written-statement is that "it is denied that defendant No,1 is a mortgagee of the said plot" or that (vide para.8 of written-statement) "it is denied that it was ever intended that any mortgage by deposit of title deeds would be created." However, it was not specifically disclosed in the written-statement as to what was the intention of the parties at the time of the execution of Exh.P-/1 or what was the status of this document, if it was not a mortgage-deed. All that was further stated was that "the document spoke for itself". Under the circumstances it is necessary to reproduce this agreement as well as section 58(f) of Transfer of Property Act to determine this controversy:-- "I, the undersigned, Habib Siddiqui, Muslim adult, resident of 110-A Block 2, P.E.C.H. Society, Karachi- 29 do hereby record, confirm, and agree as follows:--
(1) That you have paid to me and I have received from you (1) Rs,1,00,000 (one lac) in cash on 4th June, 1979, Rs,50,000 (fifty thousand) in cash on 6th June, 1979, and the further sum of Rs,1,50,000 (one lac and fifty thousand) on 11th June, 1979, by pay order No,XDDH 563589 issued in my favour by United Bank Limited Hotel Intercontinental Branch Karachi, making together the sum of Rs,3,00,000 (three lacs) the receipt whereof has been separately acknowledged by me.
(2) That I have agreed and I hereby confirm that I shall be paid to you the aforesaid sum of Rs,3,00,000 (three lacs) on or before 4th September, 1979, and time is made the essence of the agreement.
(3) I have produced papers to show that the above plot of land is allotted to Lt.-Gen. M. Sharif Khan son of Late Nizamuddin, by allotment order No,DS/S/A/5407 dated 30-7-1967, issued by the Pakistan Defence Society, Karachi.
(4) That I have purchased the above plot of land and paid to the allottee Lt.-Col. M. Sharif Khan, the entire agreed consideration and I am put in possession and I am, at this date, in possession of the above plot of land.
(5) Lt.-Col. M. Sharif Khan has signed and delivered to me, usual required papers for transferring the said plot of land to my name or to the name of my nominee.
(6) To secure repayment by me to you of the said sum of Rs,3,00,000 paid to me as aforesaid, I have delivered to you, the required papers for transfer of the above plot in the manner aforesaid.
(7) I specifically agree that if I fail to repay to you the said sum of Rs,3,00,000 (three lacs) on or before 4th September 1979, you will be entitled and you will have full power and absolute authority from me, to complete the transfer papers of the above plot of land by filling (in blank space) the name of the transferee and supply to the Society and get the plot transferred to your name or to the name of your nominee and I shall not object to the transfer of the said plot as aforesaid.
(8) I further agree that if the said plot of land is not transferred in the manner aforesaid, for any reasons whatsoever, I shall be liable to repay to you the aforesaid sum of Rs,3,00,000 and in addition I shall pay to you the sum of Rs,1,00,000 (one lac) as liquidated damages and I admit that the said sum of Rs,1,00,000 agreed to be paid is adequate and proper."
Section 58(f) of Transfer of Property Act: "Where a person in the Town of Karachi delivers to the creditor documents of title to immovable property, with intent to create security thereon, the transaction is called a mortgage by deposit of title deeds."
17. I am of the view that para. 8 of the agreement Exh.P/1/1 read in the light of section 58(1) of Transfer of Property Act clearly creates mortgage by deposit of title deeds and renders para. 7 redundant. My attention was also drawn to an order, dated 10-2-1988 in H.C.A. No,92 of 1986 which is Exh.P/1/7 and which appears to indicate that on that day defendant No,1 had shown willingness to receive Rs,10,00,000 if the suit plot was returned to him and the Court had adjourned the case for the next day for the acceptance of the offer by the plaintiff (appellant in the said 'High Court Appeal') as his counsel had made a statement that the plaintiff was willing to accept this offer.
' In other words, this order indicatcd that on that particular date defendant No,1 had conceded that the transaction was a mortgage and had agreed for redemption of the mortgage. My conclusion as regards the status of Exh.P/1/1 does get support from this order.
17. Now, a mortgage by deposit of title-deeds does not require registration, as provided under section 59 of Transfer of Property Act, but learned counsel of defendants Nos.1 and 2 argued that Exh.P/1/1 is a comprehensive document and, therefore, required registration and he relied on PLD 1965 SC 274 (U.B.L. v. Azirannessa) and 1992 SCMR 417 (Abdul Sattar v. Mst. Sardar Begum). I do not agree with the learned counsel since in these cases the transaction was held to be mortgage by conditional sale. In that case, of course, the document was compulsorily registrable.
18. I would, therefore, hold that the suit plot was equitably mortgaged for Rs,3,00,000 (three lacs). In other words, the transaction was mortgage by deposit of title-deeds. The issue is thus decided in the affirmative.
19. The last portion of the issue "If so, whether defendant No,1 was entitled to foreclosure" was given up by learned counsel of defendants Nos.1 and 2 and he conceded that if the transaction amounted to equitable mortgage, defendant No,1 was not entitled to foreclosure.
20. Since Exh.P/1/1 is held to be mortgage-deed, Issue No,1 is also decided in the negative and it is held that the suit is not barred either under '- Order 2, Rule 2 or Order 9, Rule 9, C.P.C.
22. ISSUE NO.3.---Para.2 of Exh.P/1/1 shows that no specific date was fixed for the repayment of the loan but 4th September, 1979 was the last date by which repayment of loan was to be made and in para. 9 of the plaint the plaintiff says that on the date of payment (by which he obviously means 4th September, 1979) defendant No,1 was not available and he avoided to receive back the amount of loan. In his statement as P.W.1 he admitted the delay in offering repayment. To quote his own words, he said that "I had in fact delayed in payment". He then added that he then contacted Seth Abid and Agha Sahab (Agha Hasan Abidi) who both requested defendant No,1 to receive the payment and he then went to see defendant No,1 with Maqbool Shah and Ghulam Abbas but defendant No,1 did not receive the payment and said, to use his own words in his cross- examination, "there was no difference between my son Mehdi and you." The loan was not a friendly loan made without any writing. It was very much a business-like loan based on a stiffly-worded document and on delivery of title documents. So the words quoted above in inverted commas make no sense. As for the offer of payment, the plaintiff had not examined either Seth Abid or Agha Hasan Abidi whom he claims he had contacted and who both had pleaded with defendant No,1 to receive back the loan amount, or Maqbool Shah or Ghulam Abbas, who were, according to him, with him when he visited defendant No,1 to pay back the loan amount and defendant No,1 refused to receive it. The alleged offer of the plaintiff to pay back the loan amount has thus not been proved as there is only the statement of the plaintiff himself to sustain it which, uncorroborated as it is by any other piece of evidence, cannot be relied upon. If this claim of the plaintiff were correct, there was nothing to prevent him from sending a post-dated bank draft to defendant No,1 by registered post and asking him to return him title documents and, in case it was also refused, from depositing the amount in Court and serving defendant No,1 with notice to return his title documents and to receive the loan amount. The first indication from the side of the plaintiff that he was willing to pay the amount was his notice dated 12th June 1980. I am, therefore, of the view that the plaintiff has failed to establish that he tendered, or offered to tender, the loan amount until 12th June, 1980 and, therefore, there is no question of the refusal of defendant No,1 to receive the same. The issue is, therefore, decided in the negative.
23. ISSUE NO.4.---A perusal of the plaint shows that the plaintiff had . nowhere averred therein that he had deposited more than the amount of the mortgage in Court and had offered to pay five times more for redemption which was refused and his refusal was recorded in Court nor the defendants had denied these facts. As such, there was no occassion for the framing of this issue which certainly does not arise out of the pleadings. I, therefore, uphold the objection raised by learned counsel of the defendants in this behalf. I would, therefore, cancel this issue.
24. ISSUE NO.5,---Since it has been held under Issue No,2 that the transaction in dispute was mortgage by deposit of title deeds, it follows that defendant No,1 could neither get the plot in dispute transferred in his name nor could he get it transferred in the name of his daughter defendant No,2.
25. As to whether defendant No,1 in collusion with defendant No,2 (his daughter) actually transferred the suit plot to a third party or attempted to do so, I am of the view that plaintiff Muhammad Habibullah Siddiqi did not lead any evidence to sustain this allegation. The issue is, therefore, decided in the negative.
26. It may, however, be added that during the. pendency of H.CA. No,159 of 1981 defendants Nos.1 and 2 had moved an application in October 1982 under section 52 of Transfer of Property Act (C.MA.
No,4667 of 1982) praying that the Court should direct defendant No,3 (Defence Housing Authority) to mutate the property in the name of defendant No,2. Its copy is on record as Exh.D/1/2. This fact, however, does not reflect upon the issue.
27. The following are the findings on issues in Suit No,309 of 1990.
28. ISSUE NO.1.---It is an open vacant plot. Defendant No,1 had claimed its possession but there is no document on record to suggest that the plaintiff ever delivered its possession to defendant No,1.
Document Exh.P/1/1, whether an agreement or mortgage deed, also does not contain anything which may suggest that the possession was so delivered or the parties had ever contemplated to do so. Defendant No,1 claimed in his examination-in-chief (recorded on 20-5-1991) that he was in possession of this plot. However, no such claim was made by him in his written-statement in Suit No,454 of 1989 which was filed two years earlier (on 29-11-1989). D.W.1 Haji Habib produced a non- cognisable report Exh.D/1/1 lodged by his Chowkidar but it also does not prove his possession. In fact, its contents are at variance with the averments made by D.W.1 Haji Habib Jaffar Ali in his deposition. D.W.2 Iqbal claims to be a cousin of the driver of defendant No,1 Haji Habib who had got him employed with an Arab whose name is Sadmeen Al-Saudi and that he (the witness) lived with the Arab in bungalow No,50-B. Disputed Plot is No,53-B and thus quite near to it. Since defendant No,1 knew him, defendant No,1 asked him to keep an eye on the plot. This defendant No,1 may well have done but it does not show that possession was with defendant No,1. ,.There is thus no evidence to suggest that defendant No,1 had ever been in possession of the plot. It would, therefore, follow that the plaintiff continued to be in possession of the plot. Learned counsel of defendants Nos.1 and 2 (Mr. Mohsin Tayabaly) also did not support the claim of defendant No,1 as to his possession. He only argued that whosoever is considered to be entitled to the plot may be considered to be in possession. I am of the view that admittedly the plaintiff was in possession of the plot and since defendants Nos.1 and 2 have failed to bring any evidence to suggest that the plaintiff had delivered possession to defendant No,1, the possession shall be deemed to be of the plaintiff. The issue is decided accordingly. There is no necessity to refer to its legal effect.
29. ISSUE NO.2.---In order to sustain the charge of trespass, defendants should have first shown that they were in possession of suit-plot. Since the defendants have failed to prove that defendant No,1 was in possession of the suit-plot, there is no question that the plaintiff (the defendant of Suit No,309 of 1990) should have committed trespass. Defendants Nos.1 and 2 did not produce any reliable evidence on the point. Evidence of their alleged Chowkidar D.W.2 Iqbal at the most shows that the plaintiff tried to raise boundary wall of the plot which information was conveyed by him (D.W.2 Iqbal) to defendant No,1 whose son Ali lodged the non-cognizable report D/1/1. The issue is, therefore, decided in the negative.
30. RELIEF.---Since Exh.P/1/1 is field to be mortgage-deed in respect of "mortgage by deposit of title deeds" and the suit for redemption has been admittedly within time, the plaintiff is entitled to a decree for redemption, notwithstanding clause 7 of Exh.P/1/1 which is a clog on the right of redemption. A reference in this connection may be made to PLD 1971 Pesh. 28 (Mureed Khan v.
Muhammad Khan) in which it is held that any provision in a mortgage deed, which absolutely deprives a mortgagor of his right of redemption, is a clog on the equity of redemption and is, therefore, void under section 60 of Transfer of Property Act. I am, therefore, of the view that the plaintiff is entitled to redeem the mortgage. It is now left to determine the terms on which the Suit No,454 of 1989 should be decreed.
31. The principal amount is Rs,3,00,000 and Rs,1,00,000 are the liquidated damages per para. 8 of Exh.P/1/1. The target date by which the loan amount was to be returned was 4th September, 1979 and the plaintiff concedes to the paying of interest on this amount from 4th September 1979 up to 3rd May, 1989 (the suit was filed on 27-4-1989) @ 15% amounting to Rs,11,47,865. Learned counsel of defendants Nos.1 and 2 agreed that if decree of redemption of mortgage were to be passed the above rate of interest was adequate and calculation of interest was correct but he claimed further interest at the same rate from the date of suit till the date of decree. I do not agree with this and do not consider defendants Nos.1 and 2 entitled to interest from the date of suit till the date of decree.
32. 1 would, therefore, pass a preliminary decree of redemption in Suit No,454 of 1989 directing the plaintiff to deposit Rs,15,57,865 in Court minus the amount already deposited by him in the Court within a period of one month. Auer the plaintiff deposits the above amount he shall be at liberty to make an application under Order 34, Rule 8, C.P.C. for passing of the final decree and for other necessary action. No subsequent interest under Order 34, Rule 10, C.P.C. is allowed. No order as to delivery of possession is made since the plaintiff is deemed to be in possession. If the plaintiff fails to comply with the above directions or fails to pay, within such time as the Court may fix, the amount adjudged due in respect of subsequent costs and expenses etc., the defendants shall be entitled to apply for a final decree debarring the plaintiff of all rights to redeem the property.
33. Under the circumstances, Suit No,309 of 1990 is dismissed.
34. In both the suits the parties are left to bear their own costs.