Hamsadhwani and a Hallmark Judgment:

A Critical Appreciation of Radhakrishna Panicker v. State (2001(3) KLT 631)

(By S. Parameswaran, Advocate, Ernakulam)

I.  In Carnatic music a concert normally starts with the invocation of Lord Ganesha, mostly with Vatampiganapathim Bhajeham in raga Hamsadhwani. Though Ganeshastuthi is an unwritten writ, Hamsadhwani is not - and rightly so - for the artists must have the freedom of choice of the raga. So is the case with judicial performance. Minds differ as rivers differ and judicial minds are no exception; and consistency is not known as a judicial virtue. But, there are cases and circumstances where Judges should be consistent and should not give room for disconcerting unpredictability of litigations. One such area is admission of cases to file. Admission of a case is a judicial conduct that is expected of him in discharge of a duty plainly cast on the Judge by the Constitution. Further, admission of a new case to file though done by an individual Judge is virtually admission by the High Court. Hence, once a similar case has been admitted by one Judge, the other judges, before whom identical cases come up for admission, are bound to follow suit and to act otherwise is nothing short of judicial indiscipline.

II.   It is in this context that the decision of the Division Bench in Radhakrishna Panicker v. State (2001 (3) KLT 631) assumes significance and deserves a thundering applause and a standing ovation from our lawyer fraternity, for, it has well laid to rest the ghost of a pernicious practice persistently pursued by some puigne Judges of the Kerala High Court in the matter of admission for some time past.

III.  Admission of cases to file is a judicial act with its noble and laudable underpinnings of law and justice. Inconsistency of approaches and discrepancy in attitudes of different Judges in admission of cases will send out wrong signals about the impartiality of the judiciary and invite popular misconception that this august institution is little different from the two political Branches of the Government. See the ring of truth in the observations of the Americal Supreme Court: "The Court's power lies in its legitimacy, a product of substance and perception that shows itself in the people's acceptance of the judiciary as fit to determine what the Nation's law means and to determine what it demands. The Court's legitimacy depends on making legally principled decisions under circumstances in which their principled character is sufficiently plausible to be accepted by the Nation...........The Country can accept some corrections of error without necessarily questioning the legitimacy of the Court......   The legitimacy of Court would fade (however,) with the frequency of its vacillation. The Court's concern with legitimacy is not for the sake of the Court, but for the sake of the Nation to which it is responsible". (Planned Parenthood of South Pennsylvania v. Casey, (505 US 833)(1992)).

IV.   It is very much necessary that Judges take particular care about their attitudes and utterings from the Bench when one considers the fact that justices maintain an image of a hallowed, priestly tribe that dispenses wisdom from Olympian heights and the people have a right to challenge that wisdom and demystify or debunk those images.

V.  Public scrutiny of the behaviour and perception of Judges is the only effective check on judicial "extravaganza and error", but the scrutiny should not degenerate into a scurrilous, motivated attack on the judiciary.

VI.  And does not former Indian Chief Justice J.S. Verma speak a home truth when he says "The people must be satisfied that he (Judge) practices what he preaches, and only the proper perception influences the course of judicial process. Justice is a divine function. We (Judges) are entrusted with the onerous task of dispensing justice. We, therefore, discharge, a divine function. Since none of us is divine and consequently, perfect justice is beyond us. to administer justice to the best of our ability is all that we can and must strive to achieve". ("New Dimensions of Justice", J.S. Verma, Universal Law Publishing Co. P. Ltd., New Delhi (2001)).

VII.  It is pertinent here to recall the words of the Apex Court in State of Assam v. P. C. Mehra (AIR 1996 SC 430), "Constant awareness of the nature of the (judicial) power and purpose for which it is meant would prevent situations leading to clash of egos and the resultant fall out detrimental to public interest".

Moreover, above the High Court's head, we have a powerful Supreme Court in the country, which can - often does - act as a check on the former's vacillation and vagaries.

A Verdict that Disappointed Consumers

(By Kauser Edappagath, Advocate, Kannur)

Not quite long ago I did utilize the precious pages of this venerable Law Weekly to comment on the repetitive act of the High Court in interfering in the proceedings of the Consumer Forum, constituted under the Consumer Protection Act, 1986. (Jurisdiction of the High Court over the Consumer Fora - 2000 (1) KLT 17) Now, again I am constrained to drop few lines criticizing honourably about a recent verdict of the High Court of Kerala which made the telephone consumers also out side the purview of the Consumer Courts. The impugned judgment was delivered by the High Court of Kerala in General Manager v. Consumer Disputes Redressal Forum, (2000 (2) KLT 195) where in it was held that the dispute comes under S.7B of the Indian Telegraph Act is to be dealt with under the provisions of arbitration clause contained in the Telegraph Act and the Forum lacks jurisdiction to entertain and try such complaint. About the jurisdiction of the High Court to sit on judgment over the Consumer Forum, I am not commenting anything here since it was already covered in length in my article mentioned supra. But I must say that the ruling rendered in 2000 (2) KLT 195 is a decision per incuriam and has no binding force.

There is no doubt as to the proposition that the facility of telephone by the telecommunication department to a consumer, become a service as defined under the Consumer Protection Act. In Union of India v. Nilesh Agarwal, the National Commission held that the facility of a telephone is service under the Act and a subscriber is a consumer of telephone and is entitled to seek relief from the Consumer Forum under the Consumer Protection Act. It was misinterpreting S.3 of the Consumer Protection Act, the Hon'ble Division Bench came to the conclusion that the consumer forums lack jurisdiction to try the disputes come within the purview of S.7Bofthe Indian Telegraph Act. S.3 of the Consumer Protection Act lays down that the provisions of the said Act are in addition to and not in derogation of the provisions of any other law for the time being in force. The phrase "in addition to" and "not in derogation of used in S. 3 of the Act leaves no scope for doubt that the provisions of the two Acts, namely the Indian Telegraph Act and the Consumer Protection Act are complementary and supplementary to each other. The Consumer Protection Act gives the consumer an additional remedy besides those, which may be available under the existing laws. The fact that the dispute involving excess billing or meter reading can be settled under S.7B of the Indian Telegraph Act does not therefore oust the consumers from seeking relief under the Consumer Protection Act. Evidently the Parliament had considered it expedient to do so for the better protection of the interest of the consumers and for the expeditious settlement of consumer disputes. If the Legislature in its wisdom has, in terms, granted additional rights and remedies to the class of consumers, constituted by the Act, it is not for the court by way of interpretation to cut and abridge the scope thereof. These rights and remedies are not to be blackened or hamstrung either by the statutory provisions of an earlier law or by contractual agreement of the parties. The somewhat precious recently created rights and remedies of the class of consumers are not to be cut down by construction, unless expressly mandated by a non obstante clause as rightly held in Jagadamba Rice Mills v. Union of India (1991 CPC 360 Haryana). Recently the Supreme Court of India in Fair Air Engineers (P) Ltd. v. N.K. Mody (1996 (111) CPJ 1) correctly interpreted the S.3 and held, "Accordingly, it must be held that the provisions of the Act are to be construed widely to give effect to the object and purpose of the Act. It is seen that S.3 envisages that the provisions of the Act are in addition to and not in derogation of any other law in force. It would therefore be clear that the Legislature intended to provide a remedy in addition to the consentient arbitration which would be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure". Unfortunately, the Division Bench of the Kerala High Court did not notice the interpretation given to S.3 in its proper perspective by the Apex Court.

The question whether the consumer forum has jurisdiction to entertain and try the complaint regarding excessive billing in view of the specific provision of S. 7B in the Indian Telegraph Act had come for consideration before the National Commission for more than one occasion and it decided in favour of the consumer. In Commercial Officer, Office of Telecomm. Dist. Manager, Patna v. Bihar State Wear Housing Corporation (91 (1) CPR 142) and in Union of India v. Nilesh Agarwal (1991 (1) CPR 348) the National Commission consistently held that the remedy by way of arbitration under the Telegraph Act does not preclude an aggrieved consumer from seeking redressal before Forum under the Consumer Protection Act. The Lucknow Bench of the Allahabad High Court also took the same view in Union of India and Ors. v. Mrs. S. Prakash & Ors. (1991 (1) CPR 307). Further, most importantly, the Supreme Court of India in a very recent ruling in Skypark Couriers Ltd v. Tata Chemicals Ltd (AIR 2000 SC 2008 B) held "even if there exist an arbitration clause in an agreement and complaint is made by the consumer, in relation to certain deficiency in service, then the existence of an arbitration clause will not be a bar to the entertainment of complaint by the redressal agency, constituted under the Consumer Protection Act, since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force." The remedy by way of arbitration under S. 7B of the Indian Telegraph Act is a statutory remedy while the remedy provided in the agreement involved in the above-cited decision of the Supreme Court is a contractual one. But an arbitration clause embodied in an agreement between the parties could be enforced and redressed only under the provisions of Arbitration Act, 1940 or Arbitration and Conciliation Act, 1996, in which case it gets statutory color. In the larger lights of S. 3, the remaining provisions of the Act provides additional rights, remedies, forums and executing process for the consumer disputes irrespective of the arbitration clause, whether contractual or statutory.

Regarding exclusion of jurisdiction of the Civil Court when a remedy is provided in the special statute, the Apex Court in two land mark judgments (Dlutlla Bai v. Slate ofM.P. and Ors. AIR 1969 SC 78 and Premier Automobiles v. K.S. Wadekar AIR 1975 SC 2238) held that if the dispute in question is one arising out of a right or liability under the general common law and not under the special enactment, the jurisdiction of the Civil Court is only an alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is competent to be granted in a particular remedy. Here the dispute in question regarding excess billing is one arising out of a right or liability under the general common law under the head of "tort". The Indian Telegraph Act does not create a new right or liability not existing at common law by way of S.7B. In the circumstances, relying on the dictum laid down by the Supreme Court in the above said rulings, a consumer has a right of election to invoke either the jurisdiction of the Consumer Forum or the Arbitration clause in S.7B of the Indian Telegraph Act.

Quite unfortunately, the principles as laid down by the Supreme Court in Fair Air Engineers, Sky Park Couriers Ltd., Dulla Bai and Premier Automobiles (supra) were neither brought to the notice of the Division Bench of the Kerala High Court nor were it considered. The decisions of the Supreme Court in the above mentioned cases are law declared under Art.141 of the Constitution of India. It is well settled that even the obiter of the Supreme Court is entitled to the highest respect. Therefore the decision of the Division Bench in General Manager v. Consumer Dispute Redressal Forum (supra) which was rendered in ignorance of a binding authority is a judgment per incuriam and has no binding force. In CBSE v. CDRF (1993 (2) KLT 917) the Kerala High Court held that when the National Commission has taken a view on a particular point, the High Court cannot go into the correctness of the said view in another case where similar point arises and that such power is conferred only on the Supreme Court under the Act. As such the Division Bench of the Kerala High Court erred in taking a different view than that of the National Commission.

Instead of relying on the rulings mentioned above, which has got direct bearing on the issue, the Division Bench relied on certain rulings which has no relevance on the issue. The Division Bench mainly relied on the decision of the Supreme Court in Thiruvallur Transport Corporation v. Consumer Protection Council (AIR 1995 SC 1384). That was a case where the Supreme Court was considering the question whether claim for compensation arising out of motor vehicle can be adjudicated by the consumer forum and whether injured in case of motor accident can be considered as a consumer. It was held that compensation for injury sustained in fatal accident arising out of use of motor vehicles shall be claimed only before the Tribunal set up for that purpose by a special statute namely Motor Vehicles Act. The said decision can be justified on the ground that the Motor Vehicles Act expressly oust the jurisdiction of any other Courts or Tribunals. No such ouster clause is there in the Indian Telegraph Act. Even if the principle laid down by the Supreme Court in Thiruvallur Transports (supra) case that general law must yield to the special law is applied here, the Telegraph Act must yield to Consumer Act since the Telegraph Act deals with all aspects of telephone system and apparatus, whereas the Consumer Protection Act deals only with the deficiency in service, if any, by the telecom department or its employees. The other rulings relied on by the Division Bench such as Raag Rang & Anr. v. General Manager, Delhi Telephones (1997 (5) SCC 345) and M.L. Jaggi v. Mahanagar Telephones Nigam Ltd. (JT 1996 (1) SC 215) only say that the dispute regarding the payment of telephone bill is to be dealt with under the provisions of the arbitration clause contained in the Telegraph Act. Those rulings do not say that the Civil Court or Consumer Forum has no jurisdiction to try such disputes. In Srikant K. Jituri v. Corporation of the City of Belgaum (1994 (6) SCC 572) the suit was held as not maintainable in view of the specific bar in the special statute. In Telecom Dist. Manager, Goa v. Demoo & Co. (AIR 1996 SC 1545) the Supreme Court was only considering the question whether the dispute shall be referred only when there is reference by the court.

Moreover, the remedy under the Consumer Protection Act is more effective and speedy than under S.7B of the Indian Telegraph Act. In practice it is seen that the arbitration is only a formal exercise. In most of the cases the subscriber aggrieved by excess billing receives stereotyped letter stating that on investigation no defect in the metering equipment could be found and that the amount shown in the bill is correct. Arbitration proceedings initiated under S.7B do not yield any positive results as far as the subscriber is concerned as the arbitrator is an officer from the Telecom Department. The fact remains that the Consumer Courts are the only forums where the consumers can approach to seek redressed their grievance against the Telephone Department.

Various Consumer Forums of the Kerala State has already started dismissing complaints against Telecom Department as not maintainable in view of the Division Bench's ruling. But I must say that the said judgment is not a binding precedent for the various reasons stated above and hence the lower courts need not follow it. Needless to say, the State Commissions as well as District Forums are bound to follow the dictum laid down by the National Commission in Nilesh Agarwal & Bihhar State Wear Housing Corporation (supra) that the consumer forums retains jurisdiction to decide disputes against Telecom Department irrespective of the remedy by way of arbitration under the Indian Telegraph Act.

"Interruption En-Route the Destination" of Criminal Cases -

A Study of Sharma's Cases / And II

(By T.P. Aboo, Advocate, Manjeri)

"Justice ordinarily demands that every case should reach its destination, not interrupted en-route" - observed Krishna Iyer, J. in Balwant Singh & Ors. v. State of Bihar (1997 SC (Crl.) 633). The Code of Criminal Procedure 1973 provides for premature termination of criminal proceedings before the culminator into judgments under various sections, i.e., S.227 (Discharge of the accused by the court, S.239 (Discharge by the Magistrate in warrant trial), 245 (discharge in private complaints), 256 (Non-appearance or death of complainant), 257 (withdrawal by complainant), 258 (Power of the court to stop proceedings in summons cases), 320 (compounding by the parties), 321 (withdrawal of cases by Public Prosecutor).

Apart from these provisions of Cr.P.C. the Apex Court has through its rulings issued guidelines and directions for putting an end to the criminal cases or close prosecution evidence under some special circumstances.

The important decisions on this point are "Common Cause cases (1996 (4) SCC 33), Common Cause cases (1996 (6) SCC 775), Rajdeo Sharma 's case I (AIR 1996 SC 3281), Rajdeo Sharma's case II (2000(1) KLT463).

The line of approach made by the Supreme Court in Common Cause cases was different from that of Sharma's cases. In Common Cause cases direction was for the disposal of the cases by acquittal or discharge, whereas in Rajdeo Sharma's cases the direction was to close prosecution evidence and proceed to the next step. In direction No. 1 in Sharma's case the Apex Court directed the criminal courts to close the prosecution evidence on completion of 2 years "from the date of recording the plea of the accused on charges framed in cases punishable with imprisonment not exceeding seven years and in direction No. Ill, to close evidence on completion of 3 years from the date of recording the plea of the accused "on charges framed" in cases punishable with imprisonment for a period exceeding 7 years.

2.  It is submitted that these two directions are applicable to warrant case and the cases exclusively triable by the Sessions Court - Not to summons cases as the Supreme Court used the words "recording the plea of the accused on charges framed". The procedure for the trial of warrant cases is dealt with in Chapter 19 Cr.P.C. S. 239 empower the Magistrate to discharge the accused while S.240 gives the power to frame the charge S.228 Cr.P.C. deals with framing the charge by a Court of Session.

Chapter 20 of Cr.P.C. deals with trial of summons cases. S.251 provides that the particulars of the offences shall be stated to the accused and he shall be asked whether he pleads guilty or has any defence to make but it shall be not necessary to frame a formal charge. "Recording plea on particulars stated" in a summons cases is different from "recording plea on charges framed" in warrant cases, "Sharma's case" excluding summons cases from its application.

3.    In a decision reported in Sahadevan v. Excise Inspector (1999 (1) KLT 687) Sankaranarayanan, J. applied this decision in a summons case. The Hon'ble Court was

dealing with S. 55 of the Abkari Act (before the amendment of 1997). All the offences under the old Abkari Act were summons cases as the punishment prescribed was not for imprisonment exceeding 2 years. In Shaji v. State (2001 (1) KLT 733) Rajendra Babu, J. also did not make any difference between "plea recorded on particulars stated" and "plea recorded on charges framed though the Apex Court deliberately excluded the former from the purview of the directions in Sharma's case. In Shaji v. State (2001 (1) KLT 733) at Page 737 para 6 Rajendra Babu, J. observed "The direction number one in Raj Deo Sharma's case, 1999 (1) KLT 173 (SC) was to proceed to the next step in respect of the cases punishable with imprisonment for a period of not exceeding seven years if a period of two years had elapsed since the recording of the plea of the accused". The Hon'ble Judge left out the words "charges framed" in the above sentence which it is submitted is "the part and parcel" of the Supreme Court direction. For offences punishable below 7 years this word is very important to decide whether the offence is a warrant case or a summons case.

4.  The exceptions granted to these directions are exhaustive. The discretion not apply the dictum is "for very exceptional reasons to be recorded and in the interest of justice the court considers it necessary to grant further time to the prosecution." The exception is fettered with 4 qualifications. So it is submitted the discretion can be exercised in "rarest of rare case" - The term coined by the apex court in the case of awarding capital punishment Balwant Singh v. State of Punjab (AIR 1976 SC 2196 S. 354 (3) Cr. P.C.).

5.  The controversy regarding the starting point of "Rider Clause" granted in Sharma's case II is now settled. In Shaji v. State (2001 (1) KLT 733), Rajendra Babu, J. ruled that the starting point of the period of extension of 1 year started from 8.10.1998. Period of suspension of the operation of judgment from 14.5.1999 would stand excluded in computing the additional period of 1 year.

6.  The term "stands excluded" is a bone of contention. Some argue that what is suspended is the operation of the judgment, so that period is to be subtracted from 1 year, as the courts were free to conduct trial without the control of the judgment whereas others argue that the term "stands excluded" in other exceptions - absence of Presiding Officers and Prosecutors etc. - is used in the opposite sense- so that period is to be added with one year. The meaning of the terms must be understood with reference to the context, and in that sense the period of suspension of the judgment is to be subtracted from 1 year. There is no benefit of the "Rider Clause" now available as the period is already over by 8.10.99 minus suspension period of the operation of the judgment.

7.  Whether an order passed on the directions of "Sharma's case" in interlocutory or not and whether the prohibition of S. 397(2) Cr.P.C. will bar a revision is another dispute. In Udaya Kumar v. Superintendent of Police (2002 (1) KLT 212). Padmanabhan Nair, J. dismissed all the petitions, on the ground that all those cases were interlocutory and no revision would stand as the disposal of the cases would not have the effect of terminating the proceedings. As the Hon'ble Judge was deciding the case on particular facts it is submitted that this case is no authority on the point. In cases where no witness is examined an order as per Sharma 's case will terminate the proceedings. The Honourable High Court was dealing with S. 19(3) of PC Act, 1988. In V.C. Shukla v. C.B.I, the Apex Court (1980 SCC (Cr.) 695) had made a distinction between the Special Court Act and Cr.P.C. As the objective of the Special Court Act was "quickest despatch and speediest disposal" and it covered only specified number of criminals the Court was of opinion that, framing charge might be interlocutory under the Act, and not so under the Code. Further an order on Sharma 's case is a ruling of great moment flowing from Art. 21 of the Constitution affecting the life and liberty of the accused and as per the decisions of the Apex Court, such order cannot be interlocutory. The Supreme Court in recent decision has considered S. 317 Cr.P.C. - disposing personal attendance of the accused - in revision". In Shaji v. State (2001 (1) KLT 733) the Hon'ble Kerala High Court entertained the revision, Crl. R.P. 88/2000 on an order under Sharma's case. So it is submitted the revisional jurisdiction of the High Court and Sessions Court can be exercised on an order passed in Sharma's case.

8.  In Ramachandra Rao v. State of Karnataka (2002 (6) SCALE 516) the correctness of all Common Cause cases I and II and Sharma's case I and II was challenged and the matter is now before the Constitution Bench. In Udaya Kumar's case, 2002 (2) KLT 212 the prayer for the stay was not allowed as dictum of Sharma's case is still binding on subordinate courts under Art. 131 of the Constitution. In Sheonandan Pawan v. State of Bihar (AIR 1987 SC 877) the question whether a Constitution Bench can entertain review petition unless the judgment sought to be reviewed was set aside, was the point for consideration. The majority proceeded on the assumption that it was set aside.

9.  In Udaya Kumar v. Supdt. of Police (2002 (1) KLT 212), Padmanabhan Nair, J. observed that "In Raj Deo Sharma Case it is not stated that for getting extension, prosecution shall file written application. The Hon'ble Court proceeded further and ruled that oral request was sufficient and the court could act even on a petition filed by the accused. In Shaji v. State (2001 (1) KLT 733) the Single Bench ruling was to the effect that the court can extend one year on a request by the prosecution. Hence the distinction between granting extension for very "exceptional reasons" and granting extension of one year as per "Rider Clause" must be clear. In the former the court is acting suo-moto; prosecution or the accused are not prevented from moving the court for the relief. But the subordinate courts must exercise the discretion on the date of the expiry of 2 years or 3 years as the case may be, otherwise if the accused filed a petition after 1 year there cannot be extension retrospectively. So far as the Rider Clause is concerned Sharma's case mandates that, "additional period of one year can be claimed" by the prosecutor. It is submitted that, in this case claiming by the prosecutor is mandatory and in this respect there is conflict of opinion between two Hon'ble Single Judges of the High Court, in Shaji's case (2001 (l)KLT733)and UdayaKumar Case (2002(1) KLT 212).

10. Exception No. IV In Sharma's case is that if the inability for completing the prosecution evidence within the aforesaid period is attributive to the "conduct" of the accused in "protracting" the trial no court is obliged to close the prosecution evidence". Here the apex court has used two words "conduct" and "protracting the trial". For availing of the exception the "conduct" of the accused must be the cause of "protracting" the case.  "Conduct" of a person is formed by the continuous and consistent behaviour, single instance does not constitute "conduct". It is question of fact. In this case the subordinate courts are given discretion in the facts and circumstances of the case, either to apply or not apply the discretion. When the accused or the counsel is absent on some occasions and petition is filed to excuse the absence is accepted by the court," the "conduct" of the accused is not the cause for "protracting" the trial. It is the circumstances wherein steps are taken under Ss. 83 and 84 of Cr.P.C. or non-co-operation of the counsel as reported in 2001 (2) KLT 159 (SC) which attract this exception.

All subordinate courts are bound to apply the direction in Sharma's case No. I and II in "letter and spirit". Systematic or infrastructural inconvenience is no excuse as the Supreme Court has considered that point in the main appeal and rejected it. The Supreme Court in a subsequent decision (2001 (2) KLT 159 SC), compared this excuse to the proverbial complaint of "workers blaming the tool". It is a cardinal principle of interpretation that the plain meaning of a provision should be followed when it is clear and un-ambigous. This is true in the construction of statutes as well as understanding the decision of the High Courts and Supreme Court of India (AIR 1979 SC Maxwell on Interpretation of Statutes page 28).

Mortgage by Deposit of Title Deeds (Equitable Mortgage):-

Face to Face with Realities

(By K.R. Giri Iyer, Advocate, Ottapalam)

Three questions for consideration :-

1)     Whether registration is a mandatory requirement or not?

2)     Whether original title deed is to be deposited for satisfying the requirements of the section?       

                                 ,

3)     What is the fate of a bonafide purchaser for value who has no notice of the prior mortgage?

The first question regarding registration can be considered as a matter of prime importance.

1) Under S.58(f) of Transfer of Property Act the Law recognises equitable mortgage, which is quite easy in procedure. One who wants a loan can hand over the title deeds of his property in a notified area and he can obtain the money and the loan becomes a secured debt, which will be having first charge over all unsecured debts. Although this was just a practice followed in olden days, which was there after recognised by law. When equitable mortgage is created, Law requires nothing to be reduced in black and white. The difficulties arises when the amounts are not returned when the person who lended money claims money through legal methods there may not be any evidence to find out the actual amounts borrowed or the rate of interest fixed. So to overcome the difficulties the parties searched for the remedy and even the Banking institutions were in front row and they adopted different methods like obtaining pronotes or any collateral negotiable instrument or other documents while giving the amount and nationalised banks also started a method of recording the deposit by way of executing memorandum of deposit of title deeds and there started the main difficulty of the question regarding registration of the documents as mandated by the Registration Act.

2) The question arose for consideration even during the year 1950 and appreciating the importance of the question a Bench consisting of 4 Judges of the Honourable Supreme Court in the case of United Bank of India Ltd. v. M/s. Lekharam Sonaram & Co. & Ors. which was reported in AIR 1965 SC 1591. There the Honourable SC reversed the judgment of the Honourable High Court which was reported in AIR 1958 Patna 472. The Hon'ble Supreme Court held that "when the debtor deposits with the creditor title deeds of his property with an intent to create a security the Law implies a contract between the parties to create a mortgage and no registered instrument is required under S. 59 as in other classes of mortgage. It is essential to bear in mind that the essence of a mortgage by deposit of title deeds is the actual handing over by a borrower to the lender of documents of title to immovable property with the intention that those documents shall constitute a security which will enable the creditor ultimately to recover the money which he has lent. But if the parties choose to reduce the contract to writing, this implication of law is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage. It follows that in case the document which constitutes the bargain regarding security requires registration under S. 17 of the Indian Registration Act, 1908, as a non testamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees or upwards. If a document of this character is not registered it cannot be used in evidence at all and the transaction cannot be proved by oral evidence either". And regarding the facts of the case the Hon'ble Supreme Court has stated "where the letter in question did not mention details of title deeds, which were to be deposited with the bank and neither mentioned what was the principal amount borrowed or to be borrowed nor it referred to rate of interest for the loan, the letter was not intended to be an integral part of the transaction between the parties and did not by itself operate to create an interest in the immovable property and therefore, it did not require registration.

So every case has to be interpreted independently as to whether the document constitutes an element of bargain regarding security, which may trouble both the laymen as well as the lawmen.

3) The Hon'ble Kerala High Court's decision in Hubert Peyoli v. Santhavilasath Kesavan Sivadasan reported in 1998 (2) KLT125 has created a pandemonium on the issue of registration. There the Hon'ble High Court has held as follows:- "Delivery of document of title alone is sufficient to create an equitable mortgage under the above Section. There is no necessity to execute any document. In case a document was executed for that purpose of creating a mortgage under S. 58(f) of the Transfer of Property Act, no doubt it requires registration. For creating an equitable mortgage, there must be a debt, there must be a deposit of title deeds and that intention of the parties should be that the title deeds were deposited only for the purpose of giving security of the property covered by the title deed. When the memorandum of letter was executed on the date of the deposit or delivery of the title deeds that needs registration. And after the delivery of the title deed, any letter or memorandum was executed endorsing the earlier deposit of title, which already created a mortgage that letter, needs no registration. In the instant case before me, it is quiet clear that Ext. A2 was executed on the same date on which the document was delivered. Therefore, as per the above principle laid down by the Madras High Court and by this Court in the above decisions, it is quite obvious that Ext. A2 at the outset needs registration".

4) This decision was followed by the decision reported in Joseph v. Michael after the lapse of two years and reported in AIR 2000 Kerala 240, which has cleared the confusion to certain extent. There Honourable Justice M.R. Hariharan Nair has stated in the Judgment that "the stray sentence in paragraph 4 of Hubert Peyoli 's case that when memorandum was executed on the date of deposit or delivery of title deeds that needs registration has, therefore to be understood as applicable to the facts and circumstances of that case and not as inflexible rule of universal application irrespective of the time of deposit and time of execution of the mortgage". "There is no bar in the execution of a memorandum evidencing the mortgage on the same day and the memorandum will not require registration provided it was executed after the deposit albeit on the same day".

5)  Even after the above decision the Hon'ble Kerala High Court while deciding the case of George v. Bank of India which was reported in 2001 (1) KLT 303 has observed regarding Hubert’s case that "In that case from the statement of facts it is seen that a document was executed on the same day on which the deposit was made and hence a learned Single Judge of this Court held that the document requires registration, because according to him, it was simultaneous. But here, no document is executed. Ext. A13 is only a recording of a statement".

6) Thus the question of registration is raised if there is an element of bargain recorded in the memorandum or if the deposit of title deeds and the handing over of the memorandum is simultaneously done. On this point even now there is ample possibility of raising another series of litigation on different facts and circumstances.

Another controversy is regarding the nature of documents to be deposited, i.e., second question; whether original title deed is necessary or not for creating equitable mortgage?

7) His Lordship Justice Raman Nayar while dealing with this question incidentally has stated in the case of Popular Bank Ltd. v. The United Coir Factories & Ors. reported in 1961 KLT 434 that "I do not think that the TP Act could possibly contemplate the creation of successive mortgages of the same property by the same person by the deposit, one after another, of the documents of title, which may be numerous, with nothing to show their sequence in point of time for the purpose of determining priority (except the word of the interested parties or, in case there is a writing in the shape of memorandum, a writing which can be passed by the mortgagor at any time with any day he chooses to put to it) and no means by which a mortgagee can ascertain the existence or otherwise of a prior mortgage excepting the assurance of the mortgagor. Even if it be that the mortgage holding the deed by which the mortgagor acquired title can claim priority under S.78 of Transfer of Property Act, there would still be nothing by which the priority of the remaining mortgages could be determined".

The problems of the mortgagee has clearly dealt with in the above passage by His Lordship.

8) While dealing with the question the Division Bench of Hon'ble Kerala High Court in Syndicate Bank v. Modern Tile and Clay Works and reported in 1980 KLT 550 has held as follows, "A copy of a deed of transfer is not ordinarily a document of title for the purpose of an equitable mortgage. It is only evidence of title. It is the original deed of transfer that is the document of title. This is because the rules for the issue of copies permit the obtaining of copies by an owner even while he is in possession of the original document of title. To hold that a copy of a deed of transfer is also a document of title for purpose of S. 58(f) of the Transfer of Property Act would amount to giving facilities to the owner to misuse the provision. He may get an advance from one person by delivering the original document of title and then use the copy of the document for getting an advance from some other person who may not be aware of the earlier equitable mortgage. It should be the policy of law to see that such contingencies are avoided. At the same time there may be cases where the original document is lost and there are no chances of that document being made use of for any purpose. In the absence of original deed of transfer the next best evidence of the owner's title to the property is a certified copy of that document. A certified copy in such case may with sufficient safe guards be received as a document of title. The essential pre-requisite for the use of a certified copy as a document of title is the loss of original title deed. Unless and until it is made out that the original is lost, a certified copy of a document cannot be considered to be a document of title for the purpose of S. 58(f) of the Transfer of Property Act.

9) Where as a later Division Bench of Kerala High Court in C. Assiamma v. State Bank of Mysore and Ors. reported in AIR 1990 Kerala 157 has stated "we have not understood observation of the Division Bench to mean that only in cases where the original title deed is lost that deposit of a registration copy can validly create an equitable mortgage."

10) So the Division Bench has differed from the earlier Division Bench's observation. Again a single Judge of the Hon'ble Kerala High Court in the case of Indian Bank v. Bombay Hardwares & Sanitaray Stores reported in 2001(3) KLT 273 has stated as follows: "Even though S.58(1) of the Transfer of Property Act contemplates deposit of the original title deeds for creation of equitable mortgage, when the original is lost or not forthcoming, equitable mortgage can be created by depositing copies of the document." A similar issue was answered by the Division Bench of Kerala High Court in the case of State Bank of Travancore v. Velayudhan Pillai which was reported in 1995 (1) KLT 582. There the Lordships has held that "In a case where duplicate partition deed registered along with the original is deposited bonafide by one of the executants of the partition deed or persons claiming through such executants to whom only a duplicate was given as his title deed and not the original deposit of original deed need be insisted only as a rule of prudence and caution and not as a legal requirement for the purpose of validly creating an equitable mortgage."

In my humble view title deed mentioned under S.58(f) is none other than the original title deed and a person who is not in possession of original title deed can seek other modes of creating mortgage.

The third question regarding bonafide purchaser for value without notice of the mortgage is to be considered next.

11. Now even though no discussion on the point is necessary since the Transfer of Property Act does not recognise a bonafide purchaser for value and no protection is given to them under the Act. The most common problem faced by a bonafide purchaser for value who has no notice of the Mortgage even after due diligent enquiry is given below! It may happen when a person 'A' having sufficiently large plot divides and sells to different persons after constructing some rooms or flats and slates that since major portion is with him the title deeds are not handed over and registers the document and the purchaser B who sells the property to another person C who thereafter seeks a loan using his title deed and gives the original title deed of his predecessor B and certified copy of the basic deed or the title deed of the original owner A and obtains amount after depositing the title deeds and when the original mortgagee of A prays for a mortgage decree what will be the effect of the purchaser C and the Mortgagee of C and if it is a case where nothing is left with A after satisfying the debt.

To sum up:

First of all if there is no document to prove the nature of transaction, amount, period and interest it may cause serious difficulties and if there is memorandum of deposit of title deeds the question of registration will come in to play on the basis of the interpretation of the memorandum of title deeds. Secondly what are the title deeds to be deposited as contemplated in the section and whether it will cover duplicate if the document is simultaneously executed and registered and whether registration copy of the document will be sufficient and what is the effect if the original title deed if lost or missing. Thirdly if a person purchases the property for value bonafidely without any notice of the mortgage after due enquiry.

The Panacea :-

The only remedy possible to solve this problem is to delete this provision, 58(f) from the Act and makes registration compulsory regarding all other type of mortgages and reduction of the Registration charges so that the number of mortgages may increase and thereby the revenue of the Government may increase and lighten the burden of people and the number of litigation will be reduced.

Note                                                                               \

(It is curious to note that the word equitable mortgage is not at all used in Transfer of Property Act instead the word Mortgage by deposit of title deeds is used. And another aspect is that unlike the English Law of equity which is used in the case of equitable mortgage no question of equity arises in Indian Law since it is a matter of right)

Has Governance Misnomed The Democracy in India ?

(By Liju V. Stephen, Advocate, High Court of Kerala)

“Where there is no law, there is no freedom”                                                                                                                                -- John Locke.

The Indian constitution envisages a constitutional form of democracy but unless the fundamental facets of democracy are upheld, it would be just a misnomer to call it a truly democratic country. Democracy can never be attained unless the 3 facets of democracy are maintained (1) Strict adherence to The Laws (2) Equality and Equal Opportunities to all the Citizens and (3) Citizens right to live without fear in a civilized society. If any of these 3 facets fail it would not be Democracy but some other form of Government.

A glance through the Indian legislatives enactments make sure that it is not the lack of Law that hampers the Democratic system but lack of proper implementation of the same. Lack of proper implementation of law arises in various forms. The tinkering of the statutory provision by subordinate legislation many a times losses the teeth for which the legal enactment was originally made for. The passive response of the Executive and its delay to act in accordance with law necessitates the citizens to approach the Constitutional Courts under Article 32 and 226 whereby which the number of cases over burdens these Constitutional Courts. The majority of the cases in constitutional courts are nothing but the basic duties which the Executive fail to act on time. And in the Criminal legal system the escaping of real culprits from the clutches of law are mainly due to the fact that the investigation of the offence by officers without the proper understanding of Law makes inadvertent or advertent loopholes in the investigation reports which enable the culprits to get away from the clutches of law. The Judicial Courts which tries the offences on the basis of these reports furnished by the investigating officers have no go other than acquit the accused. As long as Criminal Jurisprudence lacks the Legal Enactments to search and find out the real culprits even after a criminal trial, the real culprits languishes in the society as a mockery to the so called lawful society. And the law protects the pitfalls of officers on bona fide grounds. It is not that it is only the executive organs that are to be entirely blamed for and that the judicial system is not tainted with, but when compared to the other organs of Government the judiciary has the less numbers of deviants, of course not absolutely without.

The Second Facet of Democracy is the right to Equality which is enshrined in Article 14 in our Constitution whereby the Indian Constitution treats all the citizens equally and with equal opportunities. But the fact remains that the Government and its machineries are not mainly utilized for the majority of the common man but for the privileged politicians, bureaucrats and the business corporate. The recent judgment of the Supreme Court inRam Singh and others v. Union of India reported in (2015) 4 scc 697, with regard to Jat community reservations held that the Government is not to circumvent the law and its machineries to favour the few for getting votes. Article 14 guarantees equality to the citizens of India with exception by Article 16(4) and Part xvi that for the upliftment of the socially backward class, reservations can be made. It is dubious that in spite of the Government policy for upliftment of the socially backward classes, even after a period of 65 years of the implementation of the said policy, the number of the backward class in India are day by day increasing, which makes it evident that the Government policy is only farce and the regulations are being misutilised, and the so called upliftment has not yet been attained. And communities are striving to get into the so called backward class list so that reservation benefits accrue to them. And the political parties utilizing the said opportunity to secure votes by giving false promises .No citizens of India would be against giving reservation to the deserving persons and communities, but it is unfortunate that the said policies are being misutilised and thereby the lawful opportunities are being denied to the deserving persons, and thereby resources of the state can’t be optimized for providing better living standards to the citizens.

The crouching summer heat in 2015 had taken life of more than 1200 people in the State of Andhra Pradesh alone and the reason being lack of proper shelter. Were they not citizens of India for whom also the Indian Constitution guaranteed protection of their lives? What are the taxes and levies collected from the people being utilized for? And the answer is that they are being diverted to the privileged by way of loans and write-offs to support their extravagance. Dating back to the formation of the Institution of Government was to support the citizens but now it is the reverse that the people are serving the Government and they are taxed to sustain the Government. The majority of the income that is collected by way of taxes and levies are spent for providing salaries to Government officials in States like Kerala, and the money which ought to be spent for providing better standard of living for the citizens are denied to them. To have a good road, continuous electricity, drinking water and other infrastructures are just a dream for the majority of the common man. It cannot be faulted that the young educated cream of India migrates to the other parts of the world seeking better employment and living standards, they don’t want to hear the routine gimmick of the age old politicians and their political philosophies. Any democratic form of Government can prosper only if the law is implemented equally for all, or else few of the elite class and their community would create a class of its own.

The Third facet of democracy is in fact the predominant one that is the right of citizens to live without fear in a civilized society. Freedom to live without fear is necessarily a fundamental right which should be given the utmost priority. All citizens should have the right to lead a dignified way of life and to live according to his wish and choice. Of course if any element of acts which is adverse to the interest of the nation the law should take care of the same and punish the guilty by the due process of law. But it is not the same to let few persons to carry out their whims and fancies to declare the nation to their will. When Pakistan declared itseif as an Islamic republic, demands were made to declare India into a Hindu nation but the Constituent Assembly did not heed to the said demand and declared India into a secular Democratic Country. The recent news report from parts of India gives a picture of how a class of individuals who have no respect for this great country is taking law into their hands and depriving the fellow citizens the fundamental rights guaranteed under the Indian Constitution. It has not been too long to forget the history of India which witnessed the worst blood shed as an aftermath of the “Direct Action Day” and the “Babri Masjid demolition” where thousands of Indians were killed in the communal riots. Is that not enough or let another ten thousand to be massacred. What are all these for? For few politicians to get on to power? Whether be it Hinduvata , Jihad or Christianity it is going to affect the Democratic fabric of this great nation and pushing our country and our children to chaos and misery.

Whether it is a Political party or any other organization, the right to form an association or to profess and propagate an ideology emanates from the right guaranteed under Article 19 and 25 of the Indian Constitution. Once the said organization commences its operation from the right so guaranteed it shall not deviate from the constitutional mandates. Article 13 of the Indian constitution declares any law that is inconsistent with the fundamental rights guaranteed under part iii of the Indian Constitution to be void. Article 13 of the Indian Constitution is so wide that it is not the legislative laws alone that comes under its sweep but non legislative sources also comes within its sweep .Hence any unlawful or illegal act of any political party or any organization that breaches the constitutional mandates the Government should curb the said act as unconstitutional. The Government being the repository of power given by the citizens to act under the constitution should first and foremost be accountable to the constitution, or else it is the people of this great nation that is to suffer and fail, and democracy would just be in words.

Let us be an Indian first.