The Apex Court held that the though an unregistered mortgage deed is not admissible as a document of title however, the same could be relied on for collateral purposes such as a proof of possession where the case set up is of adverse possession.
The said judgment was passed by the Supreme Court in the matter of Venugopal Padayachi Vs. Pichaikaran, Civil Appeal No. .4985/2010 decided in 18.09.2018
A suit praying for redemption of mortgage and for recovery of possession was filed by the original plaintiff on the basis of a document which was styled as ‘simple mortgage’. The appellant/original defendant in his written statement pleaded that under the aforesaid simple mortgage, the defendant was not put in possession; that subsequently a document dated 12.11.1960 was entered into between the parties under which the original plaintiff purported to convey title in favour of the defendant; and, that it was in pursuance of this subsequent document that the defendant was put in possession. It is pertinent to note that the document dated 12.11.1960 being an unregistered document was not allowed to be exhibited and could not be relied upon as a document of title.
The trial Court accepted the plea set-up by the defendant that with effect from the document dated 12.11.1960, the possession of the defendant over the land in question became adverse to the original plaintiff. It was further found that since the suit was filed more than 12 years after the aforesaid document dated 12.11.1960, the defendant had perfected his title by adverse possession. The suit thus came to be dismissed. The findings rendered by the trial Court were affirmed by the lower appellate court and the appeal preferred by the original plaintiff was dismissed. However, the High Court of Madras allowed the second appeal.
The question which arose for consideration before the Supreme Court was whether such possession of the defendant under a document which otherwise is inoperative in law could be held to be adverse to the original plaintiff.
It was submitted by the appellant/defendant that document dated 12.11.1960, being an unregistered one, could certainly not be relied upon to advance the proposition that under the said document the title came to be vested in favour of the defendant but said document could be relied upon for collateral purpose, in that to support that on and with effect from that date, the defendant was put in possession.
The Apex Court relying on the judgement of Rukmani Ammal & Another vs. Jagdesa Gounder (2006) 1 SCC 65 reiterated that once the mortgagee is claiming to be an absolute owner of the property, his/her status as mortgagee comes to an end and his/her possession becomes adverse to the original owner. Even if such sale is voidable (and not void), it will not alter the legal position and adverse title of the original mortgagee continues and if the period of twelve years expires, he/she becomes owner of the property by adverse possession.
Thus, the Court allowed the appeal and reinstated the order of the trial court.