1. In this case the defendants executed a promissory note in favour of Rajah Venugopala Bahadur and effected an equitable mortgage at the same time by deposit of title-deeds. Rajah Venugopala Bahadur subsequently endorsed the promissory note to the present plaintiff and at the same time handed over to him the title-deeds which had been deposited with him.
2. The case was posted on the undefended board, but at the hearing, it was objected for the defendants, that the plaintiff was not entitled to any relief in respect of the mortgage for want of registration.
3. The objection came to this, that the registration was requisite both under Section 54 of the Transfer of Property Act, and under the Registration Act. With regard to the first, great reliance is placed upon an observation of Ramasami Pattar…(Defendant No. 2) v. Chinnan Asari…(Plaintiff) .*(1), in which he expressed his dissent from the decision of Subramaniam v. Perumal Reddi(2). I might content myself with saying that decision is binding upon me more especially as the remarks of Sir V. Bhashyam Iyengar were purely obiter. The question before him was whether a mortgagee in a suit for redemption could Set up in answer an agreement with the mortgagor giving him a right of pre-emption. The ground upon which Sir V. Bhashyam Iyengar was disposed to think that the transfer of a mortgage required registration under Section 54 of the Transfer of Property Act, was that he considered that it came within the words of intangible thing in Section 54 of the Transfer of Property Act, and that therefore a transfer of mortgage for consideration amounted to a sale, whereas the learned Judges, who decided Subramaniam v. Perumal Reddi were of opinion that it did not. Admitting however that the language of S. 54 taken by itself may be wide enough to cover such a transaction, I am not satisfied that it therefore follows that the learned Judges who decided Subramaniam v. Perumal Reddi were wrong in the result at which they arrived. Apart from the definition, a transfer of a mortgage is a transfer of the mortgage-debt with its attendant securities rather than a sale of immovable property, and what we have to see is whether, taking the provisions of the Transfer of Property Act as a whole, it is right to hold such a transaction comes within the definition of such a sale in S. 54. Admitting that a mortgagee has an interest in immovable property, still it is undoubtedly accessory to, and attendant upon, the mortgage debt. With the extinction of the mortgage debt, the interest ceases, and with the transfer of the mortgage debt, the beneficial interest, at any rate, of the original mortgagee also ceases.
4. Now the Transfer of Property Act has provided for the transfer of a mortgage debt, that is to say, that it may be transferred in the same way as any other actionable claim, and it has further provided by S. 8 that, “Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof. Such incidents include……. where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer.” If it be held that in the case of all mortgages of immovable property a registered transfer is necessary to pass the mortgage interest to the transferee, that seems to me to be inconsistent with the terms of this section. Mortgages of immovable property are by far the largest and most important class of securities and it scarcely seems to me that if the legislature contemplated that such securities should only pass from the mortgagee to the transferee by means of a registered instrument, they would scarcely have inserted this provision in such general terms. If a registered instrument is really required, it is not true to say that when the property is a debt, the securities therefor pass to the transferee. The conclusion to which I am disposed to come to is that the special provisions relating to the transfer of mortgage debts and the transfer of securities for such debts are applicable rather than the perfectly general provisions of S. 54. Generalia specialibus non derogant: General provisions do not derogate from special provisions; and it certainly seems to me the most satisfactory course to hold that registration is not required under the Transfer of Property Act to pass a mortgage security on immovable property from the transferor to the transferee. If that be not so, it is difficult to see what is to become of the mortgage security when the debt is lawfully transferred. Is it to become extinguished? Aa pointed out in Tarvadi Bholanath v. ??? Kashi(3) by Sir Lawrence Jenkins, that is not anyone's care. The only other alternative would be to hold that the transferor-mortgagee is a trustee for the transferee, and that seems to me to be inconsistent with, and opposed to the provisions of Section 8 of the Transfer of Property Act. For these reasons, both on the authority of Subra maniam Chetty v. Perumal Reddi which is binding upon me, and also or principle, I am of opinion that registration is not required under the Transfer of Property Act for a transfer of the mort gage by the mortgagee.
5. The next objection is that the registration is necessary under the terms of the Registration Act. In this case we are dealing with a mortgage by deposit of title-deeds. It is not necessary for me to consider the question whether the trans, for of an ordinary mortgage created by a registered instrument requires to be registered under the terms of the Registratior Act. I think it is quite clear that a transfer of a mortgage by deposit of title-deeds does not require registration. Reliance was placed upon the decision of Ganpat Pandurang v. Adarji Dadabhai(4). That case is distinguishable from this because there, there was a document of transfer set out in Westropp, G.J's judgment, which provided for the transfer not only of debts but of securities held with them. It was held that document required registration, and was consequently inadmissible, and that the terms of the contract having been reduced to writing, no other evidence could be looked to. At the same time in the Court below Sir Charles Sargent expressly held that an equitable mortgage by deposit of title-deeds was transferable without registration; and in this connexion he referred to a case, Kedarnath Dutt v. Shamlall Khettry(5), which is a very strong case though it is not a case of transfer. There, as held by the appellate Court?, there was a promissory note which recited a deposit of title-deeds, so that it might be said it was an agreement which required registration under the Registration Act, but the appellate Court held that this was a mere recital and that it did not require registration. The case here is very much stronger because in this case there is no agreement reduced to writing at all about the transfer there is merely an endorsement on a promissory note and handing over of the title deeds. The present case therefore seems to me much stronger than the one in Kedarnath Dutt v. Shamlall Khettry. I therefore hold that this objection also fails.
6. In the result there will be the usual mortgage, decree for the plaintiff for Rs. 19,991 with further interest on the principal amount at contract rate for six months and costs. Sale in default. Personal decree for the balance.
S.N/R.K
7. Suit decreed.