Ramakrishna Doss Chandrathna Doss v. P. Kesavalu Chetty

1. The plaintiff sues on an equitable mortgage. Defendant 1 created the mortgage and as he has become an insolvent, defendant 4, the Official Assignee now represents his estate. Defendant 2 is the son of defendant 1 and defendant 3 holds a subsequent mortgage.

2. The first point I have to decide is the one that has been raised on behalf of defendant 2. I must clearly point out that this point has not been urged either by defendant 1, 3, or 4. They have expressly said that they do not desire to urge that contention. The mortgage was created by deposit of title-deeds. It now transpires that defendant 2 is in possession of a portion of the title-deeds relating to this property. He produces them in Court and contends that as the deposit was not of all the title-deeds a valid equitable mortgage could not have been created. (After discusing the evidence it was found that the security was meant to be created over the entire house. The judgment then proceeded.) There remains another point to deal with, a point taken by the counsel for defendant 4. He contends that a valid mortgage was not created as the document of the 27th of June was not registered. His argument is: (1) that oral evidence is not admissible under the Evidence Act as the instrument constitutes the contract between the parties; (2) that the document is inadmissible in evidence under the Registration Act as it affects immovable property but is not registered. The point to be decided in such a case is: Does the document in question constitute the bargain between the parties or is it merely the record of an already completed transaction? Turning to the document it reads thus:

I pledged with you as collateral security the Collector's certificate relating to the said house… on 23rd June, 1924.

3. The document is dated the 27th and it refers to a transaction which had taken place four days previously.

4. The document proceeds to say:

I borrowed from you on the 24th, 25th and 26th sums amounting to Rs. 15,000 and agreed to pay interest.

5. Again it is the past tense that is used. The passage says that the writer had already borrowed money and had already agreed to pay interest.

6. The most authoritative exposition of the law is that contained in the judgment of the Privy Council in Subramanian v. Dutchman(1). The test that was applied in that case was: Was the document in question the bargain between the parties? On the facts of that particular case it was held that the writing constituted the contract, that parol evidence could not, therefore, be given and that the document itself, being unregistered, did not create a valid mortgage. Let us look at the document in that case. It reads thus:

We hand you herewith the title-deeds… This please hold as security… Please also hold this as further security.

7. There can be no doubt that this evidences the transaction itself and is not merely the record of an already completed transaction. In V. Krishnaya v. Poonuswami Iyer(2) the document was held to be the mere record of an already completed transaction. The words in that document are:

So, let it be known that for that I have retained with you as collateral security my document of the Collector's certificate No. 815 in respect of my house.

8. Sir Walter Schwabe, C.J, with whose judgment Ramesam, J., concurred, observed as follows:

If it constitutes the bargain, then, on the well-known rule that, where contracts are reduced to writing, you cannot give parol evidence of their contents, in order to prove the mortgage, the plaintiff would have to attempt to put in as evidence the document, and, if it is a mortgage document, he would be precluded from so doing by the Transfer of Property Act and under the Registration Act.

9. Looking at the document the learned Judges held that it did not constitute the bargain. The present case is a much stronger one. The instrument refers in no uncertain terms to the transaction having been completed some days previously. As was said in that case by Sir Walter Schwabe, C.J:—

In order to arrive at the true facts in respect of that question, I think that the first thing to do is to look at the document itself.

10. In this case there can be no manner of doubt that the document does not require registration. I have carefully followed the oral evidence and it also shows that the transaction had already been completed when this letter was written.

11. The only question that remains is. What are the amounts due to the plaintiff and defendant 3? The plaintiff is content to take a decree calculating simple interest at 15 per cent. I pass a decree for the plaintiff for Rs. 20,343-12-0 with subsequent interest on Rs. 15,000 at 15 per cent, per annum from this date to the date fixed for payment. I pass a similar decree in favour of the defendant 3 for Rs. 11,838-8-0 with subsequent interest upon Rs. 10,000 at 12 per cent, per annum from this date to the date fixed for payment. The costs of plaintiff and defendant 3 shall be paid by defendants 1, 2 and 4. I fix the fee of the defendant's guardian ad litem at Rs. 150, which the plaintiff will be allowed to include in his costs. Time for redemption is three months.

12. The portion of the title-deeds produced by defendant 2 is in Court and the same shall be treated as part of the deeds deposited with the plaintiff.

13. Claim decreed.