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Case Number

Second Appeal No. 200 of 1954

Attorney(S)

Harak Lal
B.C.Sharma

Judges

Mr. Indernath Modi

Acts

SECTION 49 REGISTRATION ACT
TRANSFER OF PROPERTY ACT 1882
Section 17(b) of the Registration I Act,
Section 17(6) of the Registration Act,
SPECIFIC RELIEF ACT

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Smart Summary

Summary of Judicial Opinion — Appeal by Moolsingh

Factual and Procedural Background

Plaintiffs alleged that the defendant Moolsingh had executed a Baraskati mortgage (dated Bhadwa Vadi 8 Smt. 1999 / 1942 A.D.) over his share in village Khurda (his Jagir) for Rs. 4,998/12/- for a 13-year period. Plaintiffs enjoyed the Baraskati for five years, after which the possession of the Jagir was taken back by the defendant and a new written agreement (Ex. 1) was executed on Bhadwa Sudi 8 Smt. 2004 (22 September 1947). Under Ex. 1 the defendant allegedly agreed to pay eight annual instalments of Rs. 401 each, with interest of 1% per mensem for late payment.

Plaintiffs claimed arrears and interest up to Smt. 2008 (24 September 1951), calculated the sum due as Rs. 1,007, relinquished Rs. 7 and sued for Rs. 1,000 with pendente lite and future interest. The defendant denied executing Ex. 1, contended it was a year-to-year lease requiring compulsory registration under Section 17(6) of the Registration Act (and therefore inadmissible being unregistered), and otherwise denied liability.

At trial, issue No. 7 — whether Ex. 1 was compulsorily registrable and inadmissible if unregistered — was treated as a preliminary issue. The trial court held Ex. 1 to be a year-to-year lease requiring registration and dismissed the suit. On appeal the lower appellate court (Senior Civil Judge, Jodhpur) reversed that finding, held Ex. 1 to be an instalment bond (not a lease) and not compulsorily registrable, and remanded the suit for determination on the merits. The defendant appealed from that reversal. The present opinion determines that appeal.

Legal Issues Presented

Whether the agreement Ex. 1 is a lease (a year-to-year lease) and therefore compulsorily registrable under Section 17(6) of the Registration Act, making it inadmissible in evidence if unregistered.
Whether Ex. 1 operated to extinguish the earlier Baraskati mortgage and therefore was compulsorily registrable under Section 17(b) of the Registration Act (instruments purporting or operating to extinguish rights in immovable property).
Whether, if Ex. 1 were compulsorily registrable but unregistered, it could nevertheless be received in evidence as proof of a personal money covenant (i.e., as evidence of a simple debt) under Section 49 of the Registration Act.

Arguments of the Parties

Appellant / Defendant (Moolsingh)

Denied having executed the agreement Ex. 1.
Argued Ex. 1 was in truth a lease from year to year (a year-to-year lease) and so required compulsory registration under Section 17(6) of the Registration Act.
Contended that being an unregistered instrument capable of affecting immovable property, Ex. 1 was inadmissible in evidence and could not sustain a decree.
Argued alternatively that Ex. 1 extinguished the earlier Baraskati mortgage and therefore fell within Section 17(b) (requiring registration).

Respondents / Plaintiffs

Asserted Ex. 1 was an instalment bond (a promise to pay yearly instalments) and not a lease, and therefore not compulsorily registrable.
Maintained that the possession of the village had been returned to the defendant before Ex. 1 was executed and that Ex. 1 did not itself extinguish the Baraskati mortgage.
Claimed the plaintiffs sought merely a money decree for the unpaid instalments and interest, not an order affecting immovable property.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Attra v. Mangal Singh, AIR 1922 Lah 43	Principle that, where there is doubt whether an unregistered document extinguished rights requiring registration, benefit of the doubt goes to the party seeking to have the document received in evidence.	Cited to support the court's view that, because the defendant bore the burden of proving extinguishment and led no evidence, any doubt should favour admitting Ex. 1 in evidence.
R.L. Soni v. Phayagyi, AIR 1939 Rang 410	Same or similar principle as in Attra (used in context of doubt with respect to registration/extinguishment issues).	Used alongside Attra to justify giving the benefit of doubt to the party who seeks to receive the document in evidence when facts are not proved by the opponent.
Sheo Pal v. Prag Dat, ILR 3 All 229 (FB)	Authority for the proposition that a personal covenant in a mortgage deed is separable and may be used as evidence of a simple debt even if the instrument affecting immovable property is unregistered.	Relied upon to hold that Ex. 1, containing an express promise to pay, can be admitted as evidence of the money debt independently of any immovable-property effect.
Vani v. Bam, ILR 20 Bom 553	Support for the separability of personal covenants in instruments affecting property and admission of such covenants as evidence of money claims.	Applied to reinforce the conclusion that Ex. 1 can be received as proof of a simple debt despite any question of registration.
Khantamoni Dassi v. Biswa Nath, AIR 1933 Cal 786	Authority confirming that unregistered mortgage deeds containing separable personal covenants may be admitted as evidence of the simple debt.	Used by the court to support admitting Ex. 1 as evidence of the plaintiffs' money claim.

Court's Reasoning and Analysis

The court approached the matter by reading Ex. 1 as a whole and determining its character from its terms — consistent with the principle that the law of registration is concerned with what a document purports to say rather than extraneous intentions.

On the question whether Ex. 1 was a lease:

The agreement recites a prior ijara (Baraskati) of 13 years, enjoyment by plaintiffs for five years and that eight years remained, and then sets out fresh terms under which the defendant would pay eight yearly instalments of Rs. 401 each.
Ex. 1 contains provisions for instalments, a khud-kasht arrangement, an express interest provision (1% per mensem for late payment), a famine-related deferral of payment, and arrangements for an existing Rs. 800 balance to be paid alongside instalments.
The court found these features — instalment terminology, interest provision and old balance — to be inconsistent with the typical form and content of a lease; the use of instalments and provision for interest were pointed out as indicia against treating Ex. 1 as a lease.
The trial court's emphasis on the famine clause (interpreting it to mean continued enjoyment by the defendant) was rejected: the appellate court held the clause instead to mean that payment for a year affected by famine would be deferred to a subsequent year (i.e., a deferral of instalment payment, not a continuation of possession or enjoyment).
Consequently, the appellate judge concluded Ex. 1 was not a lease and therefore not compulsorily registrable under Section 17(6) as a year-to-year lease.

On the question whether Ex. 1 extinguished the Baraskati mortgage (bringing it within Section 17(b)):

The court identified a factual dispute: whether Ex. 1 itself extinguished the Baraskati mortgage or whether extinguishment had already occurred (for example by return of possession to the defendant) before Ex. 1 was executed.
The burden of proof on this issue was placed on the defendant; he led no evidence on the point. The record therefore contained nothing to show that Ex. 1 operated to extinguish the Baraskati.
Because the terms of Ex. 1 do not themselves show that it effected extinguishment for the first time, and because of the defendant's failure to discharge his burden, the court was unable to hold that Ex. 1 fell within Section 17(b).
Applying the established rule that any doubt on such a question must operate in favour of the party who seeks to have the document received in evidence, the court held that Ex. 1 could not be treated as a document of extinguishment requiring registration.

On the alternative point (even if Ex. 1 were compulsorily registrable but unregistered):

The court considered Section 49 of the Registration Act, which prevents unregistered documents required to be registered from affecting immovable property or being received as evidence of transactions affecting such property, but contains exceptions allowing receipt of unregistered documents as evidence of a contract for specific performance, part performance under section 53A of Transfer of Property Act, or as evidence of any collateral transaction not required to be effected by a registered instrument.
The plaintiffs' claim was exclusively for a money debt (the instalments and interest), not for any decree affecting immovable property.
The court relied on authorities holding that a personal covenant in an instrument affecting immovable property can be treated as an independent, separable transaction and that an unregistered mortgage deed may be admitted in evidence as proof of the simple debt arising from such a covenant.
By parity of reasoning, Ex. 1 — which contains a clear express promise to pay specified sums — is receivable as evidence of the simple money debt and can support a suit and decree for that debt even if Ex. 1 were otherwise compulsorily registrable but unregistered.

Finally, the court assumed, for the purposes of this appeal, that Ex. 1 had been proved; it observed that on remand the parties would have to prove the document and other matters in issue at trial.

Holding and Implications

Holding: The appeal is dismissed. The court held that Ex. 1 was not a lease and therefore not compulsorily registrable under Section 17(6); alternatively, even if Ex. 1 were compulsorily registrable, it was admissible as evidence of a personal covenant (a simple money debt) under the exceptions reflected in Section 49 of the Registration Act. The judgment of the lower appellate court reversing the trial court and remanding the suit for decision on the merits is upheld.

Implications:

Direct effect on the parties: The trial court's dismissal based on non-registration is set aside; the suit is to proceed to trial on the merits (as remanded by the lower appellate court). Plaintiffs may seek a money decree based on Ex. 1, subject to proof at trial.
Admissibility principle applied: Where an instrument affecting immovable property contains a separable personal covenant to pay money, that covenant may be admitted as evidence of a simple debt even if the instrument would otherwise require registration; the court applied existing authorities to that effect.
No new legal doctrine was established by this opinion beyond applying settled principles (reading the document as a whole to determine its character, burden of proof on extinguishment, benefit of doubt rule, and separability of personal covenants). The decision confines itself to the facts and authorities cited and remits factual issues to trial for proof by the parties.

Disposition recorded in the opinion: Appeal dismissed with costs; signature/initials in the opinion indicated as "H.G.P.". The suit is to proceed on merits upon remand.

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Mool Singh v. Pokardas And Another

1. This is an appeal by the defendant Moolsingh against an order of the Senior Civil Judge, Jodhpur, by which he reversed the judgment and decree of the trial court and remanded the suit for a decision on the merits. The plaintiffs' case was that the defendant by an agreement dated Bhadwa Vadi 8 Smt. 1999 (corresponding to 1942 A.D) made a Baraskati mortgage of his share in village Khurda being his Jagir, for a sum of Rs. 4998/12/-, the Baraskati being for a period of 13 years. The plaintiffs enjoyed the Baraskati for a period of five years, whereafter the possession of the Jagir was taken back by the defendant and instead, the defendant executed a new agreement Ex. 1, on Bhadwa Sudi 8 Smt. 2004 corresponding to the 22nd September, 1947.

2. By this agreement the defendant agreed to-pay eight instalments of Rs. 401/- each, the instalments to be paid on posh Sudi 15 every year and it was further stipulated between the parties that if the instalment was not paid on the due date, interest would be charged at the rate of 1 per cent per mensem.

3. The plaintiffs' case further was that the defendant paid the instalments for Samvat years 2004 and 2005 but the instalment for Samwat year 2005 was paid on the 10th February, 1950, instead of the due date which fell on the 14th January, 1949, and thus the defendant had made himself liable to interest amounting to Rs. 65/- at the rate above mentioned, and further that the dependent had also not paid instalments for Samwat years 2008 and 2007 amounting to Rs. 802/- and in addition, incurred a liability for interest on those instalments amounting to Rs. 140/-; and thus the plaintiffs calculated the total sum due to them as Rs. 1007/- up to the date of the suit, that is. Smt. 2008 Asoj Vadi 8 corresponding to 24th September, 1951. The plaintiff relinquishect the sum of Rs. 7/- out of the aforesaid amount and filed a suit for Rs. 1000/- in the court of the Munsiff Jodhpur claiming pendente lite and future interest.

4. The defendant resisted the suit. His contention was that the factum of the Baraskati which was alleged to have been executed by the defendant in favour of the plaintiffs for a period of 13 years was irrelevant and, therefore, did not require any reply. So far as the subsequent agreement dated Bhadwa Sudi 8 Smt. 2004 was concerned by which the defendant was alleged to have agreed to pay eight instalments of Rs. 401/- each, the defendant totally denied to have executed it, and, consequently, pleaded that nothing was due from him to the plaintiffs.

5. The defendant further contended that the aforesaid agreement amounted to a lease, and that it was compulsorily registrable, and being unregistered, it was inadmissible in evidence, and the plaintiff was not entitled to any decree on the basis of such an instrument.

6. The trial court framed a number of issues, and we are concerned in this appeal with issue No. 7 only which relates to the question whether the agreement on which the suit was based was compulsorily registrable, and having not been registered was inadmissible in evidence. The trial court took this issue as a preliminary issue, decided it against the plaintiffs and dismissed the suit without going into the merits.

7. The finding of the trial court was that the agreement Ex. 1 was a lease and that it was a year to year lease and, therefore, it was compulsorily registrable in accordance with Section 17(6) of the Registration Act, and further that as it had not been so registered, it was inadmissible in evidence, and incapable of sustaining a decree.

8. The plaintiffs then went in appeal, and the learned Civil Judge, who disposed of the appeal, reversed the judgment of the trial court, and held that the document Ex. 1 was in reality an instalment bond and not a lease and was not compulsorily registrable, and consequently he held that the document was not inadmissible in law, and on that view he remanded the suit to the trial court for a decision on the merits. The present appeal has been filed from the aforesaid judgment.

9. The only question which thus emerges for determination in this appeal is whether the agreement Ex. 1 has been rightly held to be not compulsorily registrable by the learned Judge. Let us now look at the terms of this agreement.

10. The agreement begins by a recital that the defendant had given his share in village Kharda to the plaintiffs in Ijara for a period of 13 years, and that the plaintiffs had enjoyed the village for five years, and that the ijara should have run for another eight years; but in consideration thereof this fresh agreement was being executed. The terms of this agreement were then mentioned. Firstly, that the defendant would continue to pay a sum of Rs. 401/- every year for the remaining period of eight years and each instalment would be paid on Posh Sudi 15.

11. Secondly, it was agreed that if the plaintiffs should wish to do Khud-kasht in any field, in this village the defendant shall place that field at the disposal of the plaintiffs. Thirdly, it was agreed that if the defendant failed to pay any instalment on the due date, he would be liable to pay interest at the rate of one rupee per cent per mensem. Fourthly, it was agreed that if the defendant was unable to pay any instalment due to famine for want of rain or similar other calamities, the instalment for that year would be paid in the next following year.

12. Fifthly, it was mentioned that a sum of Rs. 800/- was due from the defendant to the plaintiffs on same old account, interest thereon was also due, and the defendant agreed that he would pay the principal with interest along with the instalment falling due on Posh Sudi 15 Smt. 2004, and in the event of his failing to do so, he would be liable to pay interest thereon. These are the entire terms of the agreement Ex. 1.

13. The contention of the defendant is that Ex. 1 was a lease from year to year and for a period exceeding one year, and, therefore, its registration was compulsory before it could be admitted in evidence. This plea found favour with the trial court but was repelled by the lower appellate court on appeal. On a careful consideration of the terms of this agreement, I am inclined to agree that the conclusion arrived at by the lower appellate court that this agreement cannot be considered to be a lease.

14. Now it is well established that in order to determine the question whether a document is compulsorily registrable or not, the court must read the document as a whole and then determine its character. It should also be remembered in this connection that the Law of Registration is not concerned with the ultimate effect of a document, or the intention of the parties apart from the terms, thereof, but is really concerned with what it purports to say, and that purport is to be gathered from the terms of it.

15. Bearing the above principle in mind, I find it difficult to hold that Ex. I was a lease. A lease, to my mind, would be worded very differently. One would not talk of Khandis or instalments in connection with a lease. The provision of interest also is an indication against a lease. It is not a usual feature of leases so far as I can see, that interest is agreed to be paid or received if the rent or premium falls into arrears.

16. The trial court was apparently greatly impressed in favour of its conclusion that this document was a lease because of the condition that in the event of a famine the period of payment was to be extended by one year or more as the case may be. The wording of the clause in this connection may well be reproduced here:

17. The trial court took this to mean that the defendant would in the contingencies mentioned continue in enjoyment of the village for an additional year. This interpretation, to my mind, is obviously fallacious, because the possession of the village had already been given back by the consent of the parties to the defendant, and it was not intended that it should ever come back to the plaintiffs. Consequently, there could be no meaning in saying that the defendant would remain in enjoyment of the village for another year.

18. What this clause really means, therefore, is that should there be failure of rain and a famine occur on that account, the instalment for that year will be paid in a further year, that is, in addition to or over and above the period of eight years for which this arrangement was to last. Above all, the document also talks of some old balance of Rs. 800/-, and the manner in which the defendant was to pay it off, and all this definitely would have no place in a document of lease.

19. Bearing, therefore, all these considerations in mind, I am unable to hold that this document was a lease and it cannot be held to be compulsorily registrable on that account.

20. It was also argued, however, that the document Ex. 1 extinguished the Baraskati mortgage which had been admittedly executed by means of a registered instrument, and, therefore, it was compulsorily registrable by virtue of the provision contained in cl. (b) of the first sub-section of S. 17, which provides that non-testamentary instruments purporting or operating to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property shall be registrable.

21. The question which then arises is whether this document was entered into between the parties with the intention or for the purpose of extinguishing the Baraskati. It was argued on behalf of the defendant that by this document the Baraskati was put an end to, and the possession of the village was given over to the defendant by the plaintiffs. On the other hand, it was equally strenuously contended on behalf of the plaintiffs that it was not by the agreement Ex. 1 that the Baraskati was extinguished or the possession of the village given over to the defendant, and that the document came to be executed after such possession had already been given to him.

22. An issue on the question of registration was struck in this case, and its burden was placed on the defendant. The defendant did not lead any evidence on it and no wonder that the plaintiffs felt no necessity of giving any evidence on their side. There is, therefore, nothing to indicate on this record whether the Baraskati mortgage was, as a matter of fact extinguished by the document Ex. 1, or it stood already extinguished by the act of the parties before this document came to be executed.

23. If the Baraskati mortgage was extinguished by this very document I have no hesitation in saying that it did require to be registered before it could be used in evidence. If, however, the extinguishment came about before this document was executed, for example, by the return of the village to the defendant, then I find it difficult to hold that it is this document which extinguished the Baraskati mortgage.

24. It was for the defendant to prove what was the actual state of facts. He has led no evidence whatsoever on it. It cannot, therefore, be necessarily predicated that the Baraskati was extinguished by this document Ex. 1 and not before, and that is a matter of fact, and there is nothing in the terms of Ex. 1 to show that the Baraskati was being extinguished by this document for the first time and did not stand extinguished already by mutual consent between the parties.

25. At any rate, I am unable to hold as a definite proposition that Ex. I in the circumstances was a deed of extinguishment of the Baraskati and fell within the purview of Section 17(b) of the Registration I Act, and the principle of law is that if there is I any doubt in a matter like this, the benefit of doubt I must be given to the person who wants the court to receive the document in evidence. See in this connection Attra v. Mangal Singh, AIR 1922 Lah 43 (A) and R.L Soni v. Phayagyi, AIR 1939 Rang 410 (B).

26. In this view of the matter, I have arrived at the conclusion that the document Ex. 1 was not compulsorily registrable, and I hold accordingly.

27. I come to the same conclusion in another way. Even if I were to hold for the sake of argument, that this document was compulsorily registrable, I am still of the opinion that it cannot be shut out from evidence as proof of the plaintiff's claim for money by virtue of the provisions of Section 49 of the Registration Act. That section in so far as it is material for the purposes of this appeal runs as follows:—

“49 No document required by section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall

(a) affect any immovable property comprised therein, or

(b)………….

Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument.

28. Now the effect of S. 17 read with the last quoted section 49 is this that no document required to be registered but which has not been so registered shall affect any immovable property comprised therein, or be received as evidence of any transaction affecting such property. In other words, a document which is compulsorily registrable in law but has not been registered is useless as regards immovable property.

29. The important thing to remember in this case, however, is that the plaintiffs do not obviously seek to lay their claim against any immovable properly of the defendant and therefore there is no question of this document affecting any immovable property nor is this document being sought to be used as evidence of any transaction affecting such immovable property. All that the plaintiffs ask for is the fulfilment of the promise to pay certain monies which the defendant promised to pay as stipulated in Ex. 1 but failed therein.

30. That the document embodies such an express promise admits of no rational doubt or dispute. There is ample authority for the view that a personal covenant in a mortgage deed constitutes an independent and separable transaction apart from the portion of the document affecting the property and, therefore, even an unregistered mortgage deed can be admitted as evidence of the simple debt/See in the matter of the petition of Sheo Pal v. Prag Dat, ILR 3 All 229 (FB) (C), Vani v. Bam, ILR 20 Bom 553 (D) and Khantamoni Dassi v. Biswa Nath, AIR 1933 Cal 786 (E).

31. By parity of reasoning it must follow that the document in question, embodying as it does a definite and an express promise to pay, is receivable in evidence as evidence of the simple money debt and can be made the foundation of a suit and decree therein, and I hold accordingly.

32. I need scarcely add that I have assumed for the purpose of this appeal that the document Ex. 1 has been proved, but that assumption could not but be made in so far as the present controversy goes; and it would of course be for the plaintiffs to prove this document as indeed such other matters as have been raised in the suit would have to be proved by the respective parties when the case goes back for trial to the court of first instance. For the reasons mentioned above, this appeal fails and is hereby dismissed with costs.

H.G.P

33. Appeal dismissed.

Mool Singh v. Pokardas And Another

Summary of Judicial Opinion — Appeal by Moolsingh

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant / Defendant (Moolsingh)

Respondents / Plaintiffs

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Mool Singh v. Pokardas And Another

Comments