Minor Yegnanarayana Aiyar v. Suppan Chetty

1. The appeal raises a somewhat difficult question of law. The plaintiff owed money to defendant 1 who was conducting a chit fund, on a deed of mortgage. It is common ground that he paid to defendant 1 on 5th July, 1919 a sum of Rs. 3,500. His case shortly is this:—The defendant 1, who had a decree against his father-in-law, asked him to discharge it and that they eventually agreed that the contract rate of interest on the mortgage should be reduced and that the balance of the above sum of Rs. 3,500 should be directed to discharging the decree, which was to be assigned to the plaintiff. An endorsement was made on the deed of mortgage to the effect that it had been fully discharged by a final payment of Rs. 1,500 although much more was due. Defendant 1, however, failed to assign the decree and the plaintiff accordingly brought a suit to recover Rs. 1,500 odd, which was the amount due on the decree. Defendant 1 denied the alleged agreement. The trial Court found against the agreement and dismissed the suit. The lower appellate Court came to a different conclusion on the facts and gave the plaintiff a decree for the amount claimed by him.

2. It is now argued that the agreement set up by the plaintiff to receive a lesser amount than was due on the mortgage in full discharge of it cannot be proved under Section 92(4) of the Evidence Act, and Section 17(b) of the Registration Act.

3. The argument is supported by the decision of a Full Bench of this Court in Mallappa v. M. Naga Chetty(1). The same view was taken in two other cases from this Court Namagiri Lakshmi Ammal v. Srinivasa Aiyangar(2) and Lakshmana Setti v. Chenchuramayya(3) and also in a Bombay case Jagannath v. Shankar(4).

4. Two other decisions have been cited K. Unni Kurup v. T.V Muthorakutti(5) and K. Bapanamma v. K. Kristnamma(6) which seem to lay down that, though the oral agreement cannot be proved, the actual discharge can. They were referred to and relied on in the argument before the learned Judges who decided Jagannath v. Shankar but they preferred to follow Mallappa v. M.N Chetty. I think that decision is conclusive and allow the appeal dismissing the plaintiff's suit with costs throughout.

5. Appeal allowed.