ORDER
DR. M.K. Sharma, J.
1. The plaintiff has instituted the present suit against the defendants, Canara Bank (defendant No.1 and M/s. Venus Paper Mills Limited (defendant
No. 2) seeking for passing of a decree for redemption of mortgaged of property bearing No. B-42, Maharani Bagh, New Delhi.
2. The plaintiff has averred in the plaint that in consideration of grant of certain credit facilities in favour of M/s. Venus Paper Mills Limited,the defendant No. 2 the plaintiff created the mortgage of her property bearing No. B-42, Maharani Bagh, New Delhi by way of deposit of original title deeds. It is further averred that the aforesaid mortgage is only to secure the liability of defendant No. 2 borrower only upto a limit of Rs. 24 lacs. The plaintiff in her plaint has sought for grant of the following reliefs:
(a) Pass a decree directing the defendant No. 1 bank to disclose the amount due and to give accounts of the amount due against term loan No. 5/82 in the name of defendant No. 2 along with interest amount and the rate of interest upto an upper limit of Rs. 24 lacs.
(b) Grant the requisite/prescribed time to the plaintiff to deposit the same in this Hon’ble Court.
(c) Direct defendant No.1 to deliver to the plaintiff all documents in their possession relating to mortgaged property including the title deeds upon the plaintiff depositing the said amount in this Hon’ble Court.
(d) Any order/relief this Hon’ble Court deems fit and proper in the circumstances of case may also be passed.
(e) Costs of the suit may also be awarded in favour of the plaintiff.
3. the defendant No. 1 entered appearance in the suit and resisted the claim of the plaintiff by contending, inter alia, that the plaintiff is not entitled to redemption of mortgaged property unless she pays the entire liability of the borrower inclusive of the principal amount, interest, cost and other charges thereon and that the property in question cannot be redeemed merely upon payment of a sum of Rs. 24 lacs.
4. On pleadings of the parties, this Court by order dated 18.9.1995 framed the following issues:-
1. Whether the liability of the plaintiff under the document dated 14.12.1982 is restricted only to the tune of Rs. 24 lacs?
2.Whether the defendant is liable to return the documents on deposit of the amount of Rs. 24 lacs?
3.Whether the defendant is entitled to interest on the amount of Rs. 24 lacs? If Yes, from which date and at what rate?
4.To what relief, if any, the plaintiff is entitled to?
5. As a matter of fact, the decision in the present suit revolves around interpretation of the document dated 14.12.1982 evidencing deposit of title deeds by the plaintiff. According to the plaintiff, the aforesaid document is the only document executed by the plaintiff in favour of defendant No. 1 in respect of the Term Loan No. 5/82 granted by it to defendant No. 2. According to the plaintiff, the said document clearly stipulated that the plaintiff would be responsible to the Bank only to the extent of upto Rs. 24 lacs for the said term loan and that the aforesaid limit of Rs. 24 lacs was to be the upper most limit of the responsibility of the plaintiff including interest on such term loan and/or any other money payable by defendant No. 2 to defendant No.1. The case of the plaintiff is that she had guaranteed repayment towards the aforesaid loan to the total limit of Rs. 24 lacs only.
6. The case of defendant No. 1 on the other hand is that on 14.12.1982 the plaintiff created an equitable mortgage of her property bearing No. B-42, Eastern Avenue, Maharani Bagh, New Delhi, by deposit of the original title deeds and that the amount assured under the said mortgage was to cover/secure the entire liability of the borrower, defendant No. 2 inclusive of the principal loan amount of Rs. 24 lacs and all amounts towards interest including any outstanding by way of loans, over draft, discount of bills, cheques, etc. The defendant No. 1 pleaded that the sum assured under the mortgage was the entire liability outstanding against defendant No. 2 in respect of the term loan inclusive of the principal loan amount of Rs. 24 lacs and interest, commission, bank charges, etc., thereon. It has also been averred that at the time of creation of the equitable mortgage by deposit of original title deeds on 13.12.1982, the plaintiff after creating the equitable mortgage executed a letter dated 14.12.1982 confirming the creation of equitable mortgage of her property bearing No. B-42, Maharani Bagh, New Delhi, by deposit of original title deeds as a security for repayment of the amount of term loan together with interest and other charges including by way of loans, over drafts, discounts of bills. The defendant No. 1 has further stated that the letter evidencing the deposit of title deeds dated 14.12.1982 may be read and considered for its true interpretation.
7. On the basis of the aforesaid pleadings, issues No.1 and 2 were framed which as stated above depends on the interpretation given to the contents of the letter dated 14.12.1982. On a reading and interpretation of the aforesaid document if it is held that the plaintiff had given the guarantee only upto a maximum limit of Rs. 24 lacs inclusive of interest in respect of the term loan given by defendant No.1 to defendant No. 2 and that the creation of the equitable mortgage by way of deposit of title deeds of the aforesaid property was only to the extent of Rs. 24 lacs for the said term
loan, then the issues No.1 and 2 are to be answered in favour of the plaintiff. If, however, the answer to the aforesaid issues is answered against the plaintiff, the issues framed in the suit are to be answered against the plaintiff and in favour of the defendants and the suit is to be dismissed. The aforesaid document thus is very material and relevant for the purpose of decision in the present suit and thus, the contents thereof are extract-ed below:-
Smt. Gunmala Rajgarhia To,
B-42, Maharani Bagh, The Manager,
Eastern Avenue, Canara Bank
New Delhi-110065 Nehru Place
New Delhi-110019,
Dear Sir,
Sub: Total limits of Rs. 24,00,000/- sanctioned to M/s. Venus
Paper Mills Ltd. by way of Term Loan.
This is to place on record that to secure the facility referred to above granted to M/s. Venus Paper Mills Ltd. at your Nehru Place, New Delhi branch, I have already deposited with you at Nehru Place New Delhi on 13.12.1982 the title deeds relating to my properties (situated at B-42, Maharani Bagh, New Delhi) and as described in schedule ‘A’ herewith attached with intent to create an equitable mortgage by deposit of title deeds for which you have agreed in respect of properties fully described in the schedule ‘B’ here with attached on the said properties together with all structures and machinery standing thereon and to be put up in future to secure the said facility due and owing by M/s. Venus Paper Mills Ltd. to your Nehru Place branch at New Delhi inclusive of renewals thereof from time to time together with interest thereon and any other moneys that may become due and payable from time to time by M/s. Venus Paper Mills Ltd., to your Nehru Place branch at New Delhi and any liability arising out of the aforesaid facility granted and undertaken by your Nehru Place branch at New Delhi in that behalf and payable by M/s. Venus paper Mills Ltd., to you as also such other and further liability upto a sum of Rs. 24 lacs. (Rupees Twenty Four lacs only) which may be advanced to M/s. Venus Paper Mills Ltd. in future by your Nehru Place branch at New Delhi including by way of loans, over drafts, discount of bills, cheques, letters of credit, guarantees or otherwise and renewals thereof from time to time.
Place: New Delhi.
Yours faithfully,
Date:14.12.1982 Sd/-
Enclosures: Schedules 'A' & 'B'
referred to above.
8. Mr. A.S. Chandhiok, counsel appearing for the plaintiff placed before me the Rules governing the interpretation of a Deed. In that context, he referred to certain portion of ‘Practical Guide to Deeds & Documents’ written by Shri G.M. Divekar. At page 13 of the said book and under the Head Note 5, Rules of interpretation of a deed have been summarised as follows:-
(1) Words capable of more than one construction are to be construed so as to calling in to effect the expressed general intention of the parties.
(2) If owing to some rule laid down, a deed fails to take effect in the manner expressed, it will, if possible, be construed so as to carry in to effect the expressed general intention of the parties.
(3) When words used in a deed are in their literal meaning unambiguous and when such meaning is not excluded by the context and is sensible with respect to the circumstances of the parties or the terms of executing the deed such a literal meaning must be taken to be that in which the parties used the words.
(4) If technical legal terms are used, the technical meanings must be given to them unless excluded by the context.
(5) When a transaction is represented by more than one deed, all the deeds must be construed together and one may be read to explain the other.
(6) If two clauses or provisions in a deed are repugnant to one another, the first shall be received and the latter will be rejected, unless there is any special reason to the contrary.
(7) Repugnant words should be rejected; if any relevant words are omitted, they should be supplied; words may be transferred, parentheses may be inserted and false or incorrect grammar may be discarded, if the intention of the parties appears, otherwise, to be very clear.
(8) If, however, inspite of best endeavours and application of extensive evidence, the language of a deed is ambiguous as to the person or thing intended and as to what is to be done, the deed as a whole or any clause suffering from such defect may be declared as void for uncertainty.
9. My attention was also drawn to a decision of the Supreme Court in Delhi Development Authority Vs. Durga Chand Kaushik; . In the said decision, the Supreme Court had occasion to consider as to how a Deed is to be construed. While dealing on the subject, the Supreme Court held that in construing document, one must have regard not to the presumed intention of the parties, but to the meaning of the words they have used. It was further held that if two interpretations of the document are possible, the one which would give effect and meaning to all its parts should be adopted and for the purpose, the words creating uncertainty in the documents can be ignored.
In paragraph 19 and 20 of the said judgment, the Supreme Court has said that “the document” means “the document” read as a whole and not piecemeal and the Literal Rule of construction which, unless its application produces absurd results, must be resorted to first. The Supreme Court also held that another rule which may be applicable is as stated in the decision in Radha Sunder Dutta Vs. Mohd. Jahadur Rahim; laying down that if there be admissibility of two constructions of a document, one of which will given effect to all the clauses therein while the other will render one or more them nugatory, it is the former that should be adopted.
Reference may also be made to a decision of the Supreme Court in Naramadaben Maganlal Thakker Vs. Pranjivandas Maganlal Thakker and others; . In paragraph 3 of the said judgment it is stated that a document has to be read harmoniously as a whole giving effect to all the clauses contained in the document which manifest the intention of the persons who execute the document.
In Jangbir Vs. Mahabir Prasad Gupta, 1976 All India Rent Control Journal 770 (SC) the Supreme Court has laid down the well known principles of interpretation of a “Deed” as follows: (a) Firstly, a documents must be construed as a whole, (b) Secondly, it has to be construed as not to reduce what was meant or being done by it to a patent absurdity. (c) Thirdly, if any entry of a column appears to have been carelessly made, so as not to give a correct indication of what was otherwise clearly capable of being inferred from the objects and rest of the contents of such notification, the slight error, due obviously to inadvertence, would not matter on an application of the principle.
9. In the back ground of the aforesaid principles of law laid down in respect of rule of interpretation of a document or deed, let me now proceed to examine the contents of the documents.
10. The document dated 14.12.1982 is in the nature of a letter confirming the creation of equitable mortgage of the property of the plaintiff by deposit of original title deeds as a security for the repayment of the amount of term loan. The amount of term loan granted to the defendant No. 2 as is disclosed from the said letter itself is Rs. 24 lacs. When the earlier portion of the letter is read, it is clear that the plaintiff sought to create an equitable mortgage of the property in question by depositing the title deeds of her property in order to secure the entire facility due and
owing by defendant No. 2 total limit of which as granted by defendant No.1 to defendant No. 2 was Rs. 24 lacs. While so securing for the entire total limit of Rs. 24 lacs of the facility due and owing by defendant No. 2 it was stated that the aforesaid facility is secured by the mortgage inclusive of renewals thereof from time to time together with interest thereon and any other money that may become due and payable from time to time by defendant No. 2 to defendant No. 1. The latter part of the said document stated that any liability arising out of the aforesaid facility granted and under taken by defendant No.1 in that behalf and payable by defendant No. 2 to defendant No.1 as also such other and further liability up to a sum of Rs. 24 lacs which might be advanced to the defendant No. 2 in future by defendant No.1 including by way of loans, over drafts, discounts of bills, cheques, letter of credit, guarantees or otherwise and renewals thereof from time to time.
11. Mr. A.S. Chandhiok, counsel appearing for the plaintiff gave stress and emphasis on the latter part of the aforesaid document wherein according to him, it is made clear that the aforesaid liability is reflected up to a sum of Rs. 24 lacs only which includes principal as also the interest and other charges, if any. However, if the interpretation sought to be given by Mr. A.S. Chandhiok is accepted, then necessarily I would be reading only a part of the Deed and not the entire Deed, which would be contrary to and in violation of the very first Rule of the interpretation of a Deed laying
down that the entire contents of the documents are to be read together and the document is to be read as a whole.
the aforesaid documents confirms the creation of an equitable mortgage of the property of the plaintiff by deposit of original title deeds as a security for the repayment of the amount of term loan which was Rs. 24 lacs. The document also states that the security is created for repayment of the amount of term loan together with interest and any other money that may become due and payable from time to time by defendant No.1 to defendant No. 2. Thus, on a true, proper and correct interpretation of the said document, I am of the opinion, that the said document sought to create an
equitable mortgage of the property located at B-42, Maharani Bagh, New Delhi by deposit of original title deeds as a security for repayment of the amount of term loan together with interest and all other charges. As laid down in Divekar’s Practical Guide to Deeds and Documents words capable of more than one construction are to be construed so as to calling into effect the expressed general intention of the parties. The context in which the document was created and their intention for creating the document thus becomes relevant to property and effectively understand the meaning of the document. The document intended to safeguard the term loan granted by the defendant No.1 to defendant No. 2. The loan was for a maximum amount of Rs. 24 lacs and the said amount was to be repaid along with interest and other charges. Thus read, it would be apparent that the liability of the plaintiff was not only restricted to an amount of Rs. 24 lacs, but the same security sought to cover any amount that may be in respect of the said term loan inclusive of the principal loan amount of Rs. 24 lacs along with interest thereon as per agreed terms and all other cost, charges and commission that were sought to be fully secured by the mortgage of the property belonging to the plaintiff herein.
12. On a reading of the entire contents of the document, it is crystal clear that the mortgage was made available as a security for the amount which might be due under there term loan granted in the sum of Rs. 24 lacs together with interest, cost and other charges. The plaintiff has failed to examine any witness. The defendant No.1 however, examined two witnesses. Both the witnesses have proved the aforesaid document dated 14.12.1982.
One of the officers of defendant No.1 was examined as DW. 2. He has stated that the defendant No.1 granted credit facilities and term loan in favour of defendant No. 2 and the said term loan was secured as against mortgage of the property in respect of House No. B-42, Maharani Bagh, New Delhi. He stated that the term loan was sanctioned for Rs. 24 lacs and the mortgage was to secure term loan of Rs. 24 lacs and other interest and charges. He has proved the statement of accounts of the bank and has stated that the debit balance in terms loan account on 1.1.1993 was Rs.
10,92,902/-. The Manager of defendant No.1 was also examined as DW.1. In his Cross-examination-In-Chief, he has stated that when the plaintiff deposited the original title deeds, he was told and explained that the security will hold for the liability of the borrower, defendant No.1. In his cross-examination, he has stated that although an equitable mortgage was granted on 13.12.1982, but, the security was taken on 14.12.1982 and that the document in question was also taken on 14.12.1982 as the term loan was in fact granted on 14.12.1982.
It thus appears that it is all along the stand of defendant No.1 that the aforesaid security by way of equitable mortgage was taken and granted in respect of the entire liability of defendant No. 2 to defendant No.1 in respect of the term loan. The contents of the document as has been held by me herein above clearly corroborate the stand of defendant No.1. Thus, issue No.1 as framed in the suit is answered against the plaintiff and in favour of the defendant No.1 holding that the liability of the plaintiff under the document dated 14.12.1982 was not restricted only to the tune of
Rs. 24 lacs but also included all demands inclusive of interest and other charges.
13. In view of the aforesaid findings arrived at by me, I hold that the defendant No.1 is not liable to return the document on deposit of an amount of Rs. 24 lacs by the plaintiff and thus, issue No.2 is also decided against the plaintiff and in favour of the defendant No.1. On a careful reading and interpretation of the document in question, I hold that defendant No.1 is entitled to also recover the entire liability in respect of the term loan also out of the security provided by the plaintiff which also includes interest and, therefore, the defendant No.1 is definitely entitled to payment of interest on the account of Rs. 24 lacs, the said interest being payable on the amount in terms of statement of accounts filed by the defendant No.1 in the present suit.
Having answered the aforesaid three issued against the plaintiff and in favour of defendant No.1, the suit filed by the plaintiff stands dismissed with costs.
