Chundooru Lakshmana Setti v. Duggisetty Chenchuramayya

Abdur Rahim, J. — The only question that we have to deal with in this Second Appeal is whether Exhibit V, which is in these words—“Now if you will pay Rs. 3,000 towards the debt due by you on the two documents we shall receive the money and return the documents,’ is admissible in evidence having regard to the provisions of Sect. 17 of the Registration Act.

On the date of Exhibit V more than Rs. 3,000 was due and the balance which the plaintiff agreed to relinquish under Exhibit V amounted to more than Rs. 100. We do not think, though the question under consideration has been argued very elaborately before us, that the matter admits of any real doubt. Sect. 17, cl. (b) says that “other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent of the value of Rs. 100 and upwards, to or in immoveable property'’ must be registered. The exception which, it is argued, applies to Exhibit V is dealt with in cl. (.11) of Sub-Sect. 2, which lays down that “any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the mortgage money and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage “need not be registered. It seems to me that an agreement by which the mortgagee agrees to relinquish a portion of the debt is one which ‘purports to limit or extinguish interest in immoveable property.’ It was argued by the learned vakil for the respondent that in considering what the interest is we are not to take into consideration the amount of money payable under the mortgage, but only the security apart from the amount due. Such a construction seems to be opposed to the language of the Section, for in clause (b) the legislature says that an instrument has to be registered, if the interest or right affected by it is of the value of one hundred rupees or upwards. Now that would indicate that the interest of a mortgagee cannot be computed without taking into consideration the amount for which the property is made security. Then cl. 11 of Sub-Sect. 2, in exempting from the operation of that clause receipts purporting to extinguish the mortgage tends to support the same view. Though cl. (c) was also referred to in the course of the argument, I do not think that it has any application to this case. It seems to me, also, that the question is concluded by authority. In Abdullah Khan v. Basharat Husain the question arose with reference to an agreement come to between the mortgagee and the mortgagor as to the mode in which the profits of the property which was usufructuarily mortgaged were to be dealt with: and their Lordships of the Privy Council held that a document like that was inadmissible by reason of the provision of the Registration Act.

It is difficult to see how that case can be distinguished from the present case. I take it that the rukka which introduced a new mode of paying off the mortgage money was held to be inadmissible, on the ground that it was an instrument ‘purporting to limit or extinguish interest in immoveable property’ within the meaning of cl. (b) of Sect. 17. In Durga Prasad Singh v. Rajendra Narayan Bagchi their Lordships affirmed the judgment of the Calcutta High Court reported in 37 Cal., 293 in which it was held that a subsequent unregistered agreement for reduction of rent payable under a registered lease was inadmissible for want of registration.

In Tika Ram v. The Deputy Commissioner of Bara Banki the agreement which was held by the Judicial Committee to be inadmissible was on the part of the mortgagee to pay a higher rate of interest. It is difficult to understand how agreements of the above character could be substantially distinguished from the agreement in question in this case.

The exact point was decided in Gobardhan Sahi v. Jadunath Rai, where it was held that “an agreement executed by a mortgagee after the date of the mortgage whereby he relinquished a certain part of the principal and all interest, past and future, on the mortgage in lieu of certain services rendered by the mortgagor to the mortgagee was a document which required registration to make it admissible in evidence, and it could not be said to be an acknowledgment of payment within the meaning of the exception contained in Sect. 17, cl. (n) of the Indian Registration Act 1877, which corresponds to cl. (11) of Sub-Sect. 2 of the present Act.

On the other hand, Mr. Krishnaswami Aiyar for the respondent referred us to two cases one of which is reported in Shid-lingapa v. Chenbasapa. That was a case under the Old Registration Act. The question raised there was whether certain receipts for payment of money were inadmissible for want of registration; and it was held that they were not. I do not think that his decision really throws much light upon the question we have to deal with here. There is a decision however in Kailash Chandra Nath v. Sheikh Chhenu, which does support the respondent's contention. The learned Judges say: “we can find nothing in the law or in any authority which would require such waiver to be registered, the waiver alluded to being that of the right to compound interest. We do not find that any of the decisions to which we have referred are alluded to in the judgment or in the summary of the arguments at the bar. Nor does it appear from the judgment that Sect. 17, cl. (b) of the Registration Act was discussed, and the learned Judges refer only to Sect. 92 of the Evidence Act which requires that such an agreement must be in writing.”

I hold therefore that Exhibit V is inadmissible in evidence.

The appeal will be allowed with costs and there will be the usual mortgage decree for the full amount due under Exhibit H. Time for payment six months from the date of the decree.

Napier J.—I entirely agree with my learned brother that this matter is covered by authority of the Privy Council. I would only add a few words on the construction of the section of the Act itself. It would hardly be possible to find words of wider import than we have in cl. (b) of Sect. 17 of the Registration Act “which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest.” If words of that extremely wide character are not sufficient to cover a case where a mortgage debt is by agreement of parties largely reduced, it seems to me difficult to find words which will have that effect. Then there is this further reason, namely, that the language of the cl. (b) actually imports into the consideration of the necessity for registration the question of the value of the interest for it speaks of the right, title or interest being of the value of one hundred rupees and upwards, and it is a little difficult to see how, if no question with regard to the amount is, as argued by Mr. Krishnaswami Aiyar, a question affecting interest, the amount can be a test for limiting the application of the section. There is to my mind, further, a complete answer to the argument to be found in the amendment introduced by the Act of 1886 and now incorporated in the present Act of 1908. The language of cl. (b) as I have pointed out contains the words ‘limit or extinguish’ and turning to Sub Sect. 2 which is the amendment, we find this “Nothing in cl. (b) applies to . . . . . . . .”, then cl. (1) “any endorsement on a mortgage deed acknowledging the payments of the whole or any part of the mortgage money and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage.”

Now, here clearly we have a case of extinction; so a receipt for the money must be an instrument which operates to extinguish within the language of cl. (b). The same meaning must of course be attached to the words ‘right, title and interest’ when you are dealing with the question of extinction, and if extinction by receipt applies to the right, title and interest and thereby makes the amount covered by the security interest within the meaning of that clause, it necessarily follows, it seems to me, that where the effect of the document is to limit, you must also apply the same meaning to the word ‘interest’ and read it as applying to the amount of money secured. One result of holding that the words “limit or extinguish” the interest do not apply to words that limit the amount of money to be recovered in future, would be that whereas under this proviso ‘any other receipt for payment of money due under a mortgage’ is only exempted from registration when ‘it does not purport to extinguish’ the mortgage; if this view was to be upheld that limitation and extinction do not apply to the amount of money; it would be absolutely immaterial whether a receipt for money did or did not purport to extinguish the mortgage, because on that reading of cl. (b) the document itself would not be necessarily registrable under cl. (b) so that that portion of Sub-Sect. 2, cl. XI, which takes such receipts out of the operation of cl. (b) and also that part which leaves them within it, would neither of them have any operation on the reading suggested by Mr. Krishnaswami Aiyar as there would be no interest to be extinguished and so the whole of cl. XI would be meaningless.

I am therefore clear that cl. (b) must be given the meaning which the cases show has been applied to it with the result that this agreement falls within its mischief.

The appeal must therefore be allowed with the result stated in my learned brother's judgment.

C. K.Appeal allowed.