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Harkisandas Dharamsey v. Dwarkadas Gordhandas
Factual and Procedural Background
This is a vendor-and-purchaser summons concerning whether the defendants have proved a marketable title to certain leasehold property sold to the plaintiff by written agreement dated 21 July 1934. The title under challenge begins with an alleged mortgage executed on 21 December 1901 by Omar Pir Mahomed in favour of Dossibai Nawroji Gazdar (Ex. A). The mortgage instrument bears the mortgagor's signature with a single attesting witness to the operative witness clause; below that appears a separate receipt clause signed by the mortgagor admitting receipt of Rs. 20,000 and witnessed by two persons (one of whom had attested the mortgagor's signature in the witness clause). Endorsements were made in the Sub-Registrar's office on the same day, including admissions of execution and a statement by an identifying witness, followed by the Sub-Registrar's signature and a later registration entry dated 3 January 1902. The plaintiff challenged the sufficiency of the attestation and raised other objections to the chain of title. The court was asked to answer whether the defendants had established a marketable title.
Legal Issues Presented
- Whether the mortgage dated 21 December 1901 (Ex. A) was validly attested in compliance with Section 59 of the Transfer of Property Act, 1882.
- Whether endorsements and signatures made or recorded in the Sub-Registrar's office (including identifying witness statements and the Sub-Registrar's signature) can be treated as attestation within the meaning of the Transfer of Property Act.
- Whether actions taken in the Sub-Registrar's office (and the registration endorsements under the Registration Act) can be used to prove attestation of a document that requires registration.
- Whether the sale purportedly made by the mortgagee under the first mortgage extinguished a subsequent (second) mortgage and charge, and whether the second mortgagee/chargee are estopped from challenging the first mortgage and its sale (with reference to Section 69 of the Transfer of Property Act).
- Whether an assignment of the equity of redemption in 1931 to two named partners of a firm was insufficient because it did not name all partners of the firm at that date (i.e., whether the assignment should have been made in favour of all then-existing partners of the firm of Vithaldas Vasanji).
- Whether the defendants satisfactorily proved that moneys advanced by named persons (in an earlier mortgage dated 16 October 1923) were self-acquired property, and that no other persons were interested as coparceners.
Arguments of the Parties
Defendants' Arguments (as reported)
- It was contended (by Mr. Munshi for the defendants) that the signatures accompanying the receipt clause on the mortgage constituted sufficient attestation under Section 59 of the Transfer of Property Act.
- Alternatively, the defendants argued that endorsements and identifying signatures recorded in the Sub-Registrar's office (including the identifying witness Sakarlal Jayantilal and the Sub-Registrar's endorsements) could be relied upon to prove attestation of the mortgage even if the attestation did not appear on the instrument before presentation for registration.
- The defendants contended that by reason of the sale purportedly made under the first mortgage, the second mortgage and subsequent charge had been extinguished and the second mortgagee/chargee were bound (citing Section 69 of the Transfer of Property Act) to look to the mortgagee for moneys due under their securities.
- As to the 1931 assignment of equity of redemption to two named partners of a firm, the defendants implied that such assignment was proper or, at least, offered to have all existing partners join in the conveyance if necessary.
Plaintiff's Arguments (as reported)
- The plaintiff argued that the alleged mortgage was not properly attested: the attestation required by Section 59 (two witnesses each having seen the executant sign, or equivalent personal acknowledgement) was not established.
- The plaintiff disputed reliance on the receipt clause signatures as sufficing for attestation, arguing there was no evidence those witnesses had acknowledged the mortgagor's earlier signature as executant of the mortgage instrument.
- The plaintiff challenged the invocation of Section 69 in respect of the second mortgage and charge, on the basis that Section 69 applies only where a sale is made in professed exercise of a valid mortgage power.
- The plaintiff questioned whether the assignment in 1931 should have been made in favour of all partners of the firm of Vithaldas Vasanji, and whether the persons who advanced moneys in 1923 had self-acquired funds free from other coparcenary interests.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| 52 Mad 123 (Full Bench of Madras) | Held that the signatures of the registering officer and identifying witnesses on the registration endorsement under Sections 58 and 59 of the Registration Act can amount to sufficient attestation under Section 59 of the Transfer of Property Act (where conditions are satisfied). | The court described this decision and its reasoning but explicitly disagreed with it, noting that the duties under the Registration Act differ from attestation duties under the Transfer of Property Act. |
| 54 All 1051 (Full Bench of Allahabad) | Took the view that registration endorsements and identifying witness signatures cannot be treated as attestation under the Transfer of Property Act (i.e., contrary to the Madras Full Bench). | The court agreed with this Full Bench decision and followed its approach, treating registration endorsements as unrelated to attestation required by Section 59. |
| 36 Bom LR 1041 | Explained the meaning of “title free from reasonable doubt” (citing 10 Hare 1): a marketable title is one that can at all times be forced upon an unwilling purchaser; specific performance should not be ordered if the title may be fairly and reasonably questioned. | The court relied on this authority to justify refusing to force the title on an unwilling purchaser where conflict exists between competent authorities; it applied the “free from reasonable doubt” standard to find the title not marketable. |
| 10 Hare 1 | Definition and principle that a marketable title is one that can be forced upon an unwilling purchaser; courts should not order specific performance where the title may be reasonably questioned. | The court cited this principle (via 36 Bom LR 1041) in assessing whether the title could be considered free from reasonable doubt and concluded it was not. |
Court's Reasoning and Analysis
The court examined statutory requirements and the evidence in sequence:
- Statutory foundation: Section 59 of the Transfer of Property Act requires that a mortgage of this character be effected by a registered instrument "signed by the mortgagor and attested by at least two witnesses." The court relied on the definition of "attested" in Section 3 of the Act, which requires that each witness must have seen the executant sign or have received from the executant a personal acknowledgement of his signature and must have signed in the presence of the executant.
- Receipt clause signatures: The court considered whether the two witnesses who signed near the receipt clause could be treated as attesting witnesses for the mortgage. The judge found there was no evidence that those witnesses, when signing the receipt clause, had received a personal acknowledgement from the mortgagor that he had signed the mortgage instrument as executant. Their signatures appeared to be limited to acknowledging the receipt of money at that place and time, not to attesting earlier execution of the mortgage. Consequently, those signatures could not be treated as satisfying the attestation requirement of Section 59.
-
Sub-Registrar endorsements: The court considered the defendants' contention that endorsements and identifying witness statements made in the Sub-Registrar's office could be used to show attestation. The court examined Sections 34, 47, 58 and 59 of the Registration Act (1908) as guidance:
- Section 47 indicates a registered document operates from its effective date, implying a document presented for registration should be complete and valid at the time of presentation.
- Section 34 imposes upon the registering officer the duty to satisfy himself as to whether execution was admitted, and to verify identity. That duty is limited to admission of execution and identity, not to attestation of the signature.
- Endorsements required by Section 58 relate to admission of execution and identity, not to attestation. The registering officer's signature to endorsements need not be made in the simultaneous presence of all endorsing persons, so his signature cannot be equated to that of an attesting witness.
- Evidence on presence and timing: Even if endorsement events could be relevant, the court found no evidence that the identifying witness (Sakarlal Jayantilal) was present when the mortgagor admitted execution, nor that his signature was made in the mortgagor's presence. There was similarly no evidence that the Sub-Registrar signed in the mortgagor's presence. The defendant's submission that, because the document was old, the court should presume contemporaneous presence was rejected—the court declined to make such a presumption.
- Conflict of authority: The court acknowledged conflicting Full Bench decisions: Madras Full Bench (52 Mad 123) had held registration endorsements could suffice for attestation (on facts showing presence and contemporaneous signing), while the Allahabad Full Bench (54 All 1051) agreed with the view that registration endorsements do not constitute attestation. The judge expressly disagreed with the Madras decision and agreed with Allahabad.
- Marketable title standard and practical consequence: Applying the principle that a marketable title is one that can be forced upon an unwilling purchaser (citing 10 Hare 1 and 36 Bom LR 1041), the court found that because of the conflict between competent authorities and the defects in proof of attestation here, the title could fairly and reasonably be questioned. Therefore the title was not free from reasonable doubt.
-
Other points addressed briefly:
- Second mortgage and charge: The court rejected the defendants' reliance on Section 69. Section 69 applies to a sale made in professed exercise of a power under a valid mortgage; the court found there was never a valid first mortgage (for want of attestation), so there could be no valid professed exercise of the power of sale. Hence the rights of the second mortgagee and chargee remained unaffected by the alleged first mortgage sale, and estoppel was not made out because no representation was shown.
- Assignment to partners: The mortgage of 16 October 1923 had been to "the firm of Vithaldas Vasanji among other persons." The 1931 assignment of the equity of redemption to two named partners at that time was held to be sufficient; the court did not require an assignment to all partners existing at that date. Additionally, counsel for the defendants offered that all existing partners would join in conveyance if necessary.
- Allegation about self-acquired moneys: The court viewed the assignment of the equity of redemption to the relevant persons and their partners as sufficient and found no substance in the plaintiff's contention that the advances were not shown to be self-acquired or free from coparcenary interest.
Holding and Implications
Holding:
The court held that the defendants have not made out a marketable title to the property.
Direct consequences and orders:
- The court answered the question submitted to it in the negative and ordered the defendants to pay the plaintiff's costs.
- The court directed that costs be taxed on the same scale as a long cause under Rule 243(1) of the High Court Rules.
Broader implications:
The court refused to treat the registration endorsements and identifying-witness signatures at the Sub-Registrar's office as meeting the attestation requirements of Section 59 of the Transfer of Property Act in the absence of direct evidence of contemporaneous attestation or acknowledgement. Because the decision rested on statutory interpretation and the existence of conflicting Full Bench authorities, the court emphasized that, given that conflict, it would not force the title on an unwilling purchaser. The opinion does not purport to create a new, definitive precedent resolving the conflict between Full Benches; rather, the judge aligned with the Allahabad Full Bench view and declined to adopt the Madras Full Bench view.
Order accordingly.
1. This is a vendor and purchaser summons raising a question whether the defendants have made out a marketable title to certain leasehold property, which by an agreement in writing dated 21st July 1934, the plaintiff agreed to purchase from the defendants-and one Tulsidas Valji. The title begins-in the year 1901 with a mortgage, Ex. A, which was executed by Omar Pir Mahomed, the then owner, on 21st December 1901, in favour of Dossibai Nawroji Gazdar. At the foot of the witness clause the mortgage was signed by Umar Pir Mahomed in the presence of one attesting witness only, and the point is taken that by reason of that fact, it is not as valid mortgage. Below that signature and attestation appears a receipt clause whereby the mortgagor on the very samer day on which he signed the document admitted the receipt of Rs. 20,000, signing his name below the words “I say received,” and that was witnessed by two-persons, one of whom, Mr. Rustomji, Far dunji Mulla, had previously attested the mortgagor's signature to the execution of the document. It is contended on behalf of the defendants that the attestation to this receipt clause is a sufficient attestation to comply with Section 59 of the Transfer of Property Act. On the same day, namely 21st December 1901, as appears from the last page of the mortgage, certain endorsements were made in the office of the Sub-Registrar of Bombay. The first is in these terms:
Omar Peer Mahomed executing party timber-merchant, residing at Memon Mohola, admits execution.
2. And below that is the signature of the mortgagor. Then comes another endorsement in these terms:
Mr. Sakarlal Jayantilal, clerk to Messrs Mulla and Mulla, Solicitors, residing at Bhooleshwar and known to the Sub-Registrar, examined as to identity of the above executant.
3. Below that appears the signature of Sakarlal Jayantilal, and below his signature is the signature of the Sub-Registrar of Bombay. It is contended on behalf of the defendants that this is an attestation sufficient to comply with Section 59 of the Transfer of Property Act. The last endorsement on the mortgage is a statement that it was registered on 3rd January 1902, and the document is signed by the Sub-Registrar to that effect on that date. Section 59 of the Transfer of Property Act, provides that a mortgage of the character with which this case is concerned
4. Can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.
5. What is meant by “attested” appears in S. 3 of the Act as follows:
‘Attested’ in relation to an instrument, means (and shall be deemed always to have meant) attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the direction of the executant, or has received from the exeputant a personal acknowledgment of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant….
6. The point which has been argued is whether that section implies the completion of the document by signature and attestation before it is presented for registration, or whether, as contended by Mr. Munshi for the defendants, if the document has not been attested before presentation to the Sub-Registrar, the endorsements made in the office of the Sub-Registrar may be looked at to prove attestation. Before dealing further with this question, I will first give my opinion as to the effect of the receipt clause. Looking to the definition of “attested” in Section 3 of the Transfer of Property Act, the relevant words in this connexion are:
or has received from the executant a personal acknowledgment of his signature or mark…… and each of whom has signed the instrument in the presence of the executant.
7. Mr. Munshi has to satisfy me that the two witnesses, who put their signature at the side of the mortgagor's signature below the words “I say received”, put their signatures there in his presence-after having received from him a personal acknowledgment of his signature as executant of the mortgage. Mr. Munshi has entirely failed to satisfy me as to this. There is no evidence that the mortgagor made any acknowledgment to these two witnesses at the time they signed the receipt clause that he had previously signed the document as an executant thereof. I can only treat their signatures to the receipt clause as what they purport to be, namely an acknowledgment by them that he admitted the receipt of the money, and that he had signed the document in that place for that purpose. Coming now to Mr. Munshi's contention that there is sufficient attestation to the document to be found from what took place on 21st December 1901, before the Sub-Registrar, although the mortgagor put his signature to the document admitting execution, there is no evidence that he admitted execution in the presence of Sakarlal Jayantilal; and as regards the signature of Sakarlal Jayantilal on the document, that merely indicates that he signed the document after being examined by the Registrar as to the identity of the mortgagor. Whether Sakarlal Jayantilal was present when the mortgagor admitted execution and whether he signed his name on the document in the presence of the mortgagor does not appear. Further there is noevidence to prove whether the Sub-Registrar put his name on the document, in the presence of the mortgagor or in the presence of Sakarlal Jayantilal or afterwards. Consequently, even if Mr. Munshi were right in his contention that what takes place before the Sub-Registrar may be used for the purpose of showing, that the document afterwards registered was duly attested by two witnesses before registration, he has failed to satisfy me by any evidence on this point. He has submitted that this document being over thirty years old, I ought to presume that these persons were all present and made their signatures at one and the same time in each other's presence. I am not, I think, entitled to make any such presumption, and I decline to do so. Apart from authority, I am of opinion that what takes place before the registering officer has nothing to do with attestation, and cannot be looked at for the purpose of proving attestation of a document which requires to be registered. Section 47 of the Registration Act of 1908, says that a registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. This section obviously contemplates that any document presented for registration shall be complete and valid in law before presentation. The duty imposed upon the registering officer by S. 34 is to enquire whether or not the document was executed by the person by whom it purports to have been executed, and to satisfy himself as to the identity of the persons appearing before him and alleging that they have executed the document and any enquiry held by the registering officer is directed to these matters and not to attestation. Similarly the endorsements required by S. 58 to be made upon the document are in reference to admission of execution and the identity of the persons admitting execution, and not, to attestation. And though the registering officer is bound by S. 59 to affix the date and his signature to all endorsements made in his presence, he is not bound to do so at the time they were made, and will comply with the section if he does so on the same day, at a time when the persons who made the endorsements may not be present. Clearly, therefore, this Section does not contemplate that the signature of the registering officer to any endorsement is to be treated as that of an attesting witness in connexion with an admission of execution. In my opinion the relevant sections of the Indian Registration Act assume that the document which is sought to be registered is a document complete in all essentials before it is presented for registration. There is a conflict of authority upon the point in other High Courts. A Full Bench of the Madras High Court in 52 Mad 123 (1), has taken the view that the signatures of the registering officer and of the identifying witnesses affixed to the registration endorsement under Sections 58 and 59 of the Registration Act, are a sufficient attestation within the meaning of Section 59 of the Transfer of Property Act, and its subsequent amending Acts. In that case there had been a finding that the Sub-Registrar had made his signature in the registration endorsement referring to the admission of execution by the executants of the document in the presence of the executants, that the witnesses who identified the executants before the Sub-Registrar were present when the admission of execution was made by the executants, and that both the identifying witnesses had made their signatures in the presence of the executants. In the judgment of the Court delivered by Coutts Trotter, C.J, he said (p. 127):
The argument against this conclusion was that the signatures were made alio intuitu, to satisfy the requirements of the Registration Act, and cannot therefore be invoked in aid for another purpose, viz., attestation under the Transfer of Property Act, though in fact all the conditions laid own by the latter Act are fulfilled. The registering officer and the identifying witnesses had exactly the same duty imposed upon them by the Registration Act as would have rested upon them as attesting witnesses under the Transfer of Property Act, and that duty they discharged.
8. With respect, I do not agree. It is true that the registering officer has imposed upon him by Section 34 of the Registration Act, the duty of satisfying himself whether execution was admitted by the person purporting to execute it, but it is no part of his duty to attest the signature of the executant, and the only duty imposed upon the identifying witnesses is to identify the person who has admitted execution. No duty is imposed upon them to attest the signature of that person as executing the document, and they are not called before the Registrar for that purpose. With respect to that decision, I disagree with it. On the other hand, there is a Full Bench decision of the Allahabad High Court in 54 All 1051 (2), which takes the same view as that at which I have arrived in this case, and with that decision I agree. Whether I am right or wrong in the opinion which I have formed, it would not, I think, be proper to force this title upon an unwilling purchaser having regard to the conflict of opinion which exists, between two Full Benches of different High Courts. In 36 Bom LR 1041 (3), Broomfield, J., at p. 1048, said:
The meaning of a title free from reasonable doubt was explained in 10 Hare 1 (4) as a marketable title which can at all times be forced upon an unwilling purchaser, and it was held in that case that specific performance should not be allowed even though the Court takes a favourable view of the title if it appears that its opinion may fairly and reasonably be questioned by other competent persons.
9. Having regard to the difference of opinion which exists. I cannot say that the opinion which I have myself expressed might not fairly and reasonably be questioned by other competent persons. In such circumstances, it seems to me that I cannot possibly say that the title here is a title free from reasonable doubt. The opinion which I have arrived at is in itself sufficient to dispose of this matter; but as other points have been argued, I will very briefly deal with them. The mortgagor, on 6th October 1907, executed a second mortgage of the proper by (Ex. B), and on 21st April 1909, he created a further charge thereon (Ex. C). No re-conveyance in respect of the second mortgage is forthcoming, nor any release in respect of the charge. The mortgagee under the original mortgage in purported exercise of his power of sale sold the property by public auction on 20th November 1910. The property was purchased by one Abdul Mujid Yalli Mahomed, and the mortgagee executed a deed of assignment of the property in favour of Abul Mujid Yalli Mahomed on 7th November 1911. The mortgagor also executed an assignment on 5th November 1913, in favour of the said Abdul Mujid Yalli Mahomed on the last day of the term of the lease, and the present defendants derive their title to the property through the said Abdul Mujid Yalli Mahomed. The defendants have contended that by reason of the sale the second mortgage and the charge have been extinguished, and that the second mortgagee and the chargee are estopped from challenging the mortgage and sale, inasmuch as the second mortgage and charge were subject to the first mortgage. Mr. Munshi referred to Section 69 of the Transfer of Property Act, and contended that there had been a sale made in professed exercise of the power Contained in the mortgage as contemplated by sub-s. (3), of S. 69, and that the second mortgagee and chargee by reason of sub-s. (4) would be bound to look to the mortgagee for any moneys due to them under their second mortgage and charge. In my opinion, this contention is entirely unfounded, inasmuch as S. 69 contemplates a sale in professed exercise of a power under a mortgage, which is a valid mortgage, and if, as I hold is the fact in the case before me, there never was a valid mortgage, there could not be a professed exercise of sale under the mortgage. Accordingly in my opinion, the rights of the second mortgagee and chargee are entirely unaffected by the first mortgage and the sale professsed to be made thereunder. As regards estoppel there is no suggestion of any representation having been made, which would give rise to an estoppel, and in my judgment no question of estoppel exists.
10. The next point taken by the plaintiff arises in connexion with a mortgage of the property on 16th October 1923, in favour, among other persons, of Vithaldas Vasanji, a firm, the partners in that firm at that date being Vasanji Premji and Jeewandas Trikamdas. As the mortgage-moneys under that mortgage were not paid off, an assignment of the equity of redemption was executed by the mortgagors on 8th April 1931, in favour, among other persons, of Vasanji Premji and Jiwandas Tricumdas, as being the partners in the firm of Vithaldas Vasanji. At the date of the said assignment, there were three other partners in that firm in addition to Vasanji Premji and Jiwandas Tricumdas. The purchaser has contended that the said assignment ought to have been made in favour of all the partners in the firm of Vithaldas Vasanji at the time of the assignment. I do not agree. The mortgage was to the firm of Vithaldas Vasanji among other persons. That means in law that it was a mortgage to those persons among others who were partners in the firm at the time, namely, Vasanji Premji and Jiwandas Tricumdas. The equity of redemption has been assigned to those two persons, and in my opinion that is sufficient. Even if that were not the case, Mr. Munshi on behalf of the defendants expressed his willingness that all existing partners in the firm of Vithaldas Vasanji should join in the conveyance of the property to the purchaser.
11. The last point taken by the plaintiff also related to the mortgage dated 16th October 1923, which was made in favour of Gordhandas Govindji Bhanji, Ramdas Girdhardas Kuverji and Tulsidas Valji, in addition to the abovementioned firm of Vithaldas Vasanji. The plaintiff says that the defendants have failed to satisfy him that the moneys advanced by the said persons were their self-acquired property and that no other persons were interested in the said moneys as their coparceners but the equity of redemption has been assigned to those persons and to the partners of the ??? of Vithaldas Vasanji, and in my opinion there is no substance in this point. The result is that I answer the question submitted to me in the negative, and hold that the defendants have not made out a marketable title to the property. I order the defendants to pay to the plaintiff the costs, and as this matter is, in my opinion, one of importance. I order the costs to be taxed on the same scale as a long cause under R. 243(1), High Court Rules.
B.D/R.K
12. Order accordingly.
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