Kerala Financial Corporation v Cherakkadath Sabira and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **TUESDAY, THE 27[TH] DAY OF JUNE 2023 / 6TH ASHADHA, 1945** **AS NO. 379 OF 2002** **AGAINST THE DECREE AND JUDGMENT IN OS 53/1997 OF SUB COURT,** ## **HOSDURG** ## **APPELLANT/4TH DEFENDANT:** KERALA FINANCIAL CORPORATION VELLAYAMBALAM, THIRUVANANTHAPURAM, REPRESENTED BY ITS ASSISTANT MANAGER (LEGAL). BY ADVS. SRI.R.S.KALKURA,SC FOR KFC. SRI.K.JAJU BABUSCKERALA FINANCIAL CORPORATION SRI.M.R.VENUGOPAL, SC, KFC ## **RESPONDENT/PLAINTIFF AND DEFENDANTS 1 TO 3:** 1 CHERAKKADATH SABIRA, W/O KOLETH THEKKEPRATH MOOLAKKADATH ABDUL HAMEED AND BEPATHUMA, MUSILM, HOUSE HOLD, RESIDING AT, ATHINHAL IN AJENUR VILLAGE, P.O.MANIKOTH, HOSDURG TALUK, KASARGOD DISTRICT. 2 STATE OF KERALA REPRESENTED BY THE DISTRICT COLLECTOR, KASARAGOD DISTRICT. 3 THE THAHSILDAR, HOSDURG, HAVING ITS OFFICE AT HOSDURG, KANHANGAD, P.O.KANHANGAD, KASARGOD DISTRICT. 4 THE SPECIAL DEPUTY TAHSILDAR (R.R), HOSDURG, P.O.KANHANGAD, HOSDURG TALUK, KASARGOD DISTRICT. 5 C.H.ABDUL HAMEED, AGED 37 YEARS, S/O. PATTLATH UNNIYAN, VALAPPIL MOHAMMED ALIAS U.V.MOHAMMED, MUSLIM, FISH MERCHANT, RESIDING AT BADAGARA MUKKU, BEACH ROAD, P.O.KANHANGAD, BALLA VILLAGE, HOSDURG TALUK,KASARAGOD DISTRICT. 6 PATLATH UNNIYAN VALAPPIL MOHAMMED ALIAS U.V.MOHAMMED, AGED 67 YEARS, S/O. CHERAKKADATH ABDULLA AND ASSYMMA, MUSLIM, BUSINESSMAN, RESIDING AT ATHINHAL, P.O.MANIKOTH, AJANOOR VILLAGE, HOSDURG TALUK, KASARAGOD TALUK. 7 KOLETH THEKKEPURATH M. ABDUL HAMEED, **AS NO. 379 OF 2002** **-2-** S/O. P.H.MOHAMMED KUNHI AND BEEPATHUMMA, MUSLIM, RESIDING AT ATHINHAL IN AJANUR VILLAGE, P.O.MANIKOTH, HOSDURG TALUK. 8 MADAMBILATH ABDUL MAJEED,S/O. M.P.AHAMMED, MUSLIM, RESIDING AT KOVVAL PALLI IN KANHANGAD VILLAGE, P.O.KANHANGAD, HOSDURG TALUK, KASARAGOD DISTRICT. BY ADVS. SRI.L.GOPALAKRISHNAN POTTI **THIS APPEAL SUITS HAVING COME UP FOR HEARING ON 27.06.2023,** **THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Sathish Ninan, J. ============================== A.S No.379 of 2002 ========================== Dated this the 27[th] day of June, 2023** ## **JUDGMENT** The suit for declaration of title and for prohibitory injunction against recovery proceedings in respect of the plaint schedule property, was decreed by the trial court. The 4[th] defendant- Kerala Financial Corporation is in appeal. 2. The plaintiff claims title over the plaint schedule property as per Ext.A1 Sale Deed dated 18.06.1984. Defendants 7 and 8 are assignees of portions. The suit is filed alleging that, recovery proceedings are sought to be initiated against the property by the 4[th] defendant for some liability of defendants 5 and 6. 3. According to the 4[th] defendant-Financial Corporation, the 5[th] defendant had availed a facility of Rs.1,80,000/- from them in the year 1985. As security for the transaction, the 6[th] defendant, who is the father of the 5[th] defendant, had on 15.11.1985, created A.S No.379 of 2002 -: 2 :- equitable mortgage over 12 ½ cents of property in R.S 301 of Ajanoor Village, by deposit of title deed. Since the facility is defaulted, they are entitled to proceed against the mortgaged property for recovery of the debt. The document of title relied on by the plaintiff (Ext.A1) is a sham document, it is contended. 4. The trial court negatived the plea that Ext.A1 is a sham document. It was further held that the 4[th] defendant has failed to prove the identity of the mortgaged property and that the plaint schedule property or any part thereof was subjected to mortgage. Accordingly, the suit was decreed. 5. Heard the learned counsel on either side. 6. Issue No.3 raised for trial was as to whether Ext.A1 is a sham document; it reads thus: _“Whether the document No.2526/84 is sham and taken into effect?”_ 7. Ext.A1 Sale Deed dated 18.06.1984 was executed by the 6[th] defendant in favour of the 7[th] defendant. A.S No.379 of 2002 ## -: 3 :- Subsequently on 15.06.1990, the 7[th] defendant conveyed the property to the plaintiff as per Ext A3 Gift Deed. The 4[th] defendant claims that, on 15.11.1985, the 6[th] defendant created equitable mortgage of the property to secure the debt of 5[th] defendant. It is in the said backdrop that the 4[th] defendant raised the plea of sham. 8. While appreciating the plea of sham, the fact that the parties to the transaction are closely related, is of significance. The 5[th] defendant is the son of the 6[th] defendant. The 7[th] defendant is the son-in-law of the 6[th] defendant. The plaintiff is the daughter of 7[th] defendant and the granddaughter of the 6[th] defendant. The mortgage in favour of the 4[th] defendant was on 15.11.1985. Ext A1 Sale Deed is claimed to have been executed by the 6[th] defendant in favour of the 7[th] defendant on 18.06.1984. However, such a sale was not reflected in the encumbrance certificates, Exts. B5 and B5(a) which related to the said period. It is thereafter on 15.06.1990 that Ext A3 Gift Deed has been executed by A.S No.379 of 2002 -: 4 :- the 7[th] defendant to the plaintiff. The 6[th] defendant filed a written statement denying the creation of mortgage. But the original title deed relating to the property (Ext.B1) has been produced by the 4[th] defendant. So also, Ext B6 declaration given by defendants 5 and 6 on 18.11.1985 acknowledging the availing of the facility and the creation of the equitable mortgage. 9. The trial court while dealing with the issue of sham proceeded to hold that, it is a matter between the vendor and the vendee and not for the 4[th] defendant to challenge. The reason given is apparently not sustainable. It is the case of the 4[th] defendant that Ext A1 document is a sham document which in fact did not take effect nor was intended to take effect and that, since title remained with the 6[th] defendant he had mortgaged the property for the facility availed by the 5[th] defendant. Therefore, the court was required to adjudicate upon the question as to whether Ext A1 is a sham document. In _**Naduvatheyath Sulochana v. Syndicate Bank**_ A.S No.379 of 2002 -: 5 :- _**Branch Manager, Thalassery and Another (2022(2) KHC 253),**_ this Court has explained the evidence to be considered while dealing with the question whether a transaction is sham or not. The trial court has not considered the question as to whether Ext A1 is a sham document. A finding on the plea of sham has direct consequence on the issue involved in the suit. Therefore, the finding on the plea that Ext.A1 is a sham document is liable to be set aside and I do so. 10. With regard to identification of the property, identification needs to be done with reference to Ext.B1 and Ext.A1. Though the 4[th] defendant had sought for remitting of the commissioner’s report, the application was dismissed. It appears that the plea of the plaintiff is that there is mistake in the survey number mentioned in the documents. It would only be proper that a fresh identification be made. The parties can be permitted to adduce fresh evidence. A.S No.379 of 2002 -: 6 :- In the result, the Appeal is allowed. The decree and judgment of the trial court are set aside. The suit is remanded back to the trial court for fresh disposal. Since all the parties have not chosen to appear before this Court, let the trial court issue fresh notice for appearance to the parties. Sd/- **Sathish Ninan, Judge** ## **vdv**