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Inderdeo Singh v. Ramlal Singh
Factual and Procedural Background
This second appeal arises from a suit based on a mortgage bond registered at Tikari. The Sub-Registrar at Tikari accepted the bond for registration despite the requirement that the land described must lie within the Tikari jurisdiction. Both lower courts found the land description to be fictitious and registration to have been obtained by fraud involving both mortgagor and mortgagee. Consequently, the deed could not be treated as a registered mortgage deed, and the mortgage debt was not secured on the described property. The Munsif granted a money decree based on the personal covenant in the document, treating it as registered. On appeal, the Subordinate Judge held that the document was not a registered document at all. The limitation period applicable depended on whether the document was registered under Article 116 of the Limitation Act: six years if registered, three years if not. The plaintiff appealed to the High Court.
Legal Issues Presented
- Whether a mortgage bond, the registration of which was obtained by fraud under the law of registration, can be treated as a registered document for the purpose of applying Article 116 of the Limitation Act to a suit on a personal covenant contained therein.
Arguments of the Parties
Appellant's Arguments
- The appellant relied on a decision of the Madras High Court holding that in similar circumstances, registration was valid for the personal covenant and thus Article 116 of the Limitation Act applied, giving six years limitation.
- The appellant argued there was no fraud in registering the personal covenant part of the bond, citing Section 29 of the Registration Act which permits registration of documents without immovable property at any registry office.
- The appellant contended that if the bond contained only the personal covenant, there would be no fraud, and thus the document should be considered as such for the benefit of the mortgagee.
- It was argued that denying the mortgagee the benefit of Article 116 would allow the mortgagor to profit from his own fraud.
- The appellant cited a decision of the Judicial Committee suggesting a personal judgment on the mortgage debt might be possible despite fraud in registration.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| 46 Mad 4351 (Madras High Court) | Registration valid for personal covenant despite fraud in registration of mortgage bond; application of Article 116 of Limitation Act. | The court noted this view but declined to follow it, distinguishing the facts and emphasizing the whole document must comply with registration requirements. |
| 41 CWN 7832 (Calcutta High Court) | Registration obtained by fraud renders the mortgage bond invalid for registration purposes and Article 116 does not apply. | The court adopted this view as correct, holding the document to be unregistered for limitation purposes. |
| AIR 1939 Nag 57 (Nagpur High Court Full Bench) | Adopted the Calcutta High Court's view that fraudulent registration invalidates the document for limitation purposes. | Followed to hold that the mortgage bond is unregistered and limitation runs under the shorter period. |
| 48 Cal 5094 (Judicial Committee) | Considered possibility of personal judgment on mortgage debt despite fraud in registration but did not extend Article 116 benefit. | Held not to imply that Article 116 applies where registration was obtained by fraud. |
Court's Reasoning and Analysis
The court examined the statutory framework under the Registration Act, particularly Sections 28 and 29, which distinguish documents affecting immovable property from those that do not. It held that a document containing a personal covenant affecting immovable property must comply with Section 28, requiring registration within the jurisdiction where the property lies. Fraudulent registration obtained by misrepresenting the land description vitiates the entire registration. The court rejected the appellant's argument that the personal covenant portion could be severed and treated as validly registered under Section 29. It emphasized that the entire document is subject to the registration provisions and that the fraudulent registration cannot be tolerated to benefit the party committing the fraud. The court found the mortgagor and mortgagee to be in pari delicto (equally at fault), and thus the plaintiff mortgagee could not claim the benefit of the longer limitation period under Article 116. The court aligned with the Calcutta and Nagpur High Courts’ reasoning and declined to follow the Madras High Court’s contrary view. The document was therefore treated as unregistered for limitation purposes, limiting the suit to three years.
Holding and Implications
The appeal is dismissed with costs.
The court’s decision directly affects the parties by denying the mortgagee the benefit of the six-year limitation period under Article 116 of the Limitation Act due to fraudulent registration. The mortgage debt is not secured by the mortgage property, and the suit is barred by limitation if not brought within three years. The ruling confirms that fraudulent registration cannot be compartmentalized to preserve validity of parts of a document, reinforcing strict compliance with registration jurisdiction requirements. No new precedent beyond the application of existing principles was established.
James, J.:— This second appeal arises out of a suit based on a mortgage bond. The bond was registered at Tikari, but the Sub-Registrar at Tikari could not have accepted it for registration unless it had contained a description of land within the jurisdiction of the Tikari Sub-Registry Office. Both Courts have found that this entry was fictitious, and that registration was obtained by fraud to which mortgagor and mortgagee were parties, so that the deed cannot be treated as a registered mortgage deed, and therefore the mortgage debt cannot be regarded as secured on the mortgaged property described in the bond. The Munsif considered that he could give effect to the personal covenant as contained in a registered document, and he gave money decree for the amount of money due under the covenant. The Subordinate Judge on appeal held that the document could not be regarded as a registered document at all. If the document could be treated as a registered document under Article 116 of the Schedule to the Limitation Act, the mortgagee would have six years during which he might sue on the personal covenant; but if the document were regarded as an unregistered document he would have been obliged to institute a suit within three years, and the suit in the present case would have been barred by limitation.
2. The plaintiff has come up in second appeal from that decision. The only question for decision in this appeal is whether, if the registration of a mortgage bond has been obtained by a fraud on the law of registration, the document can be treated as a registered document for the purpose of applying the provisions of Article 116, Limitation Act, to a suit on a personal covenant. The question precisely in this form came before the Madras High Court in 46 Mad 4351 wherein it was held that in similar circumstances the registration was good so far as it was registration of the personal covenant to re-pay the mortgage money, and the mortgagee was entitled to take advantage of the provisions of Article 116 of the Schedule to the Limitation Act. In 41 CWN 7832 a Bench of the Calcutta High Court considering the same question expressly differed from the view of the Judges of the Madras High Court, and in a case recently decided, a Full Bench of the Nagpur High Court has adopted the view taken by the Calcutta High Court: AIR 1939 Nag 57.3
3. Mr. Sarjoo Prasad for the plaintiff-appellant argues in favour of the view taken by the learned Judges of the Madras High Court. He suggests that it should be considered that there was no fraud in obtaining registration of the bond so far as the personal covenant was concerned, because if the bond had contained nothing but the personal covenant, the provisions of Section 29 of the Registration Act, would have applied and the document could have been registered at any Registry Office. The argument appears to be that if the document registered had been something other than what it was, no fraud would have been committed, and we are asked to call the document something other than what it was for the benefit of one of the parties who actually did commit the fraud. I think that it would be more correct to say that if a party desires registration of a document containing a personal covenant he is entitled to obtain registration of it wherever he pleases, provided that the document does not affect immovable property; but if he desires to obtain registration of a document containing a personal covenant which also affects immovable property, he is bound by the provisions of Section 28 of the Registration Act, and he is bound by those provisions for the whole of the document from beginning to end, and those provisions apply to the whole of the document.
4. Mr. Sarjoo Prasad also suggests that the decision of their Lordships of the Judicial Committee in 48 Cal 5094 implies that in that case, although there was a fraud in registration which rendered the mortgage bond invalid, their Lordships considered that it might be valid as a registered contract to repay, because they left it open to the plaintiff of that case to apply to the High Court for a personal judgment on the mortgage debt. But there is nothing in that decision which implies that their Lord, ships considered that the plaintiff should be entitled to any advantage arising from the registration of the document, or that Article 116 of the Schedule would apply to the case.
5. Lord Finlay expressly said that if the High Court should think it right to enter upon the consideration of this claim, all defences arising out of the lapse of time must be open be the defendants, and there is nothing in the decision which suggests that Article 116 of the Schedule would be applicable be the case. Mr. Sarjoo Prasad also suggests that to deny to the mortgagee, seeking a decree on the personal covenant, the benefit of the provisions of Article 116 is to permit a mortgagor to benefit by his own fraud. This is of course to some extent true of a judgment refusing a mortgage decree; but the finding of the Courts below is that the mortgagor and the mortgagee are in this matter in pari delicto: and in those circumstances the position of the defendant is the better, and if one or the other is to profit by the fraud, it cannot be the plaintiff in a suit. I do not consider that any grounds have been made out which would warrant our declining to follow the decision of the Calcutta High Court and the decision of the Full Bench of the Nagpur High Court. The view of the law taken by the learned Subordinate Judge is correct; and I would dismiss this appeal with costs.
Rowland, J.:— I entirely agree. In my view the jurisdiction conferred on the Sub-Registrar by S. 29 is limited to receiving and registering “every document other than a document referred to in S. 28” and once it is found that the document was a document referred to in S. 28 then the result is that if a Registrar had been aware of the facts he would have refused registration. The same consequences must follow as if registration had in fact been refused, that is to say the entire document is on the footing of an unregistered document. Not only does it not affect any immovable property—S. 49, but it must be considered unregistered for the purposes of limitation —Article 116 of the Schedule to the Limitation Act.
D.S/R.K
6. Appeal dismissed.
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