Property Law

Kumar Harish Chandra Singh Deo v. Bansidhar Mohanty

AIR 1965 SC 1738; (1966) 1 SCR 153

Facts

Bansidhar Mohanty advanced ₹15,000 to the appellants.
The mortgage deed was, however, executed in the name of Jagannath Debata.
Thus:
Bansidhar was the real lender and beneficial owner;
Jagannath was the named or benami mortgagee.
Bansidhar signed the mortgage deed as one of its two attesting witnesses.
When the loan was not repaid, Bansidhar sued to enforce the mortgage.
The mortgagors argued that:
Bansidhar was financially interested in the transaction and therefore could not attest it; and
only the person named as mortgagee in the deed could sue.

Whether the actual lender, who was not named as a party in the mortgage deed, could validly attest it.
Whether the beneficial owner who supplied the mortgage money could maintain the mortgage suit.

A person who is a party to a deed cannot ordinarily attest that same deed.
An attesting witness must stand outside the deed and witness its execution.
A distinction exists between:
being a party to the deed; and
merely having an interest in the underlying transaction.
Financial interest does not, by itself, make a person incompetent to attest.
A beneficial owner who supplied consideration may enforce rights arising from a transaction made in another person’s name.

Bansidhar was not named as the mortgagee or as an executing party in the deed.
Although he supplied the money and was commercially interested in repayment, he remained legally outside the instrument.
There was no rule stating that every person interested in the transaction was disqualified from attesting.
The purpose of attestation is to provide independent evidence that the executant voluntarily executed the instrument.
Bansidhar had witnessed the execution and signed for that purpose.
His financial interest might affect the weight of his evidence, but not his legal competency as an attesting witness.
Regarding the suit:
Jagannath held the apparent or nominal title under the mortgage;
Bansidhar was the real person whose money had been advanced.
Recognition of a benamidar’s ability to sue does not eliminate the beneficial owner’s right to enforce the transaction.
The person who provided consideration and for whose benefit the security was created could maintain the mortgage claim.

Bansidhar was a competent attesting witness because he was not a party to the mortgage deed.
The mortgage was validly attested.
As the real lender and beneficial owner, he was entitled to sue upon the mortgage.
The mortgagors’ appeal was dismissed.