JUDGMENT
1. On 21st December 1932 the defendant and his father executed a document (Ex. P-1) described as a conditional deed of sale of immovable property in favour of the plaintiff for a consideration of Rs. TOO. Certain creditors had obtained a decree in a mortgage suit against the defendant and his father, and the plaintiff had paid off this decree by payment of Rs. 700. According to the terms of this deed, the defendant and his father sold a house to the plaintiff subject to the conditions that if they paid off the principal sum without interest within two years they would be the owners of the house and if they failed to pay off this principal sum within that time the plaintiff was to be the owner of the house. It is admitted that the plaintiff was never placed in possession, and it is alleged in the plaint and not denied by the defendants that on 22nd December 1932, the defendant and his father agreed to pay rent for the house at the rate of Rs. 10 per mensem and executed on that date “a rent note in respect of that interest.”
2. Subsequently the matter was referred to arbitrators who gave an award (Ex. P-2) on 9th January 1935. They treated the transaction as a mortgage, and it is now conceded that it was a mortgage.
3. They calculated that Rs. 881 was due on this mortgage including Rs. 10 per mensem by way of interest, and they decided that the plaintiff should take a portion of the mortgaged house by way of payment of Rs. 600 and that the remaining amount of Rs. 231 should remain a mortgage charge on the southern half portion of the house and should carry interest at the rate of 1 per cent, per mensem. They further directed that the defendant and his father should pay off this principal and interest within four years and if they failed to do so the southern portion.
4. “should be put into the possession of the plaintiff after the same being foreclosed. The plaintiff should, according to the above condition, get a preliminary decree passed for this amount in the proper Court.”
5. This award was filed in Court, and a decree was passed on 29th April 1935 of which the relevant portion is:
“There remains a balance of Rs. 231 due to the defendant (i.e the present plaintiff). For this amount there shall be a lien of mortgage on remaining share of the southern side of the house, which is now in possession of plaintiffs 1 and 2 (i.e the present defendant and his father). This amount shall carry interest at 1 p.c p.m and repayable, in four years. If plaintiffs 1 and 2 failed to repay the amount in fixed period, the defendant can get it foreclosed.”
6. Subsequently the plaintiff applied to have this decree amended on the ground that it was not in accordance with the award and that it ought to be a preliminary decree for foreclosure. The Court; held on 5th February 1938 that the decree was in accordance with the award, that it was not intended that there should be a preliminary decree for fore, closure, that the decree could at most be treated as a mortgage deed, and that the defendant (i.e the present plaintiff) had only a right to bring a suit on this mortgage. There was a second application to amend the decree and the Court held on 20th March 1939 that its previous order was conclusive, that the condition in the award was made only to create a mortgage, and that the defendant (i.e the present plaintiff) had a right to bring a suit on the mortgage and then obtain preliminary and final decrees. An application to this Court in revision was dismissed.
7. The award and the decree required registration under Section 17(1)(e) of the Registration Act, and, in the absence of registration under S. 49 of that Act neither the award nor the decree can affect any immovable property comprised therein. Neither document was registered and the plaintiff bases his claim in this suit, which was instituted on 16th October 1940, on the original mortgage. The defendant contended that the original mortgage had been superseded by the award and decree and that the plaintiff had no remedy at all because the original contract had gone and the award and decree could not be enforced without registration. Section 62 of the Contract Act, states that if the parties to a contract agree to substitute a new contract for it, the original contract need not be performed. There must however be a new contract and not merely a new agreement, i.e, there must be a new enforceable agreement, and if the new agreement is not enforceable, then, I think, there is no novatio. That in fact seems clear from the terms of S. 62. This is the view taken by Pollock and Mulla in their commentary on the Contract Act at page 327 of Edn. 7, by Moitra at page 369 of Edn. 2 of his commentary, and by Vankatesa Iyer, Edn. 3, in his Law of Contracts at page 285, and many cases have been cited there in support of that view. It is sufficient to refer to 39 ALL. 178;1 I.L.R (1938) ALL. 714,2 5 Cal. 215,3 14 Bom. L.R 264 and A.I.R 1937 Nag. 104.5 The principle, I think, is well established that if by reason of any want of formality, such as registration, the document containing the contract is inadmissible in evidence or otherwise unenforceable, the original contract will still be operative.
8. It has been suggested that the plaintiff could at least have sued on the decree to enforce a personal liability, but when the plaintiff applied for amendment of the decree it was held that the decree could at most be treated as a mortgage decree and he had only a right to bring a suit on that mortgage. It has also been contended that there was no agreement in the so-called conditional deed of sale to pay interest, but it was pleaded and not denied that there was an agreement to pay interest at the rate of Rs. 10 per mensem. Interest at 7 per cent, per annum is claimed.
9. I, therefore, agree with the lower appellate Court that the plaintiff is entitled to fall back on the original mortgage. At the time of the award he accepted a portion of the mortgaged property in lieu of Rs. 600 and he is now claiming the balance with interest at the rate of 7 per cent, per annum. To that, in my opinion, he is entitled, and the appeal will, therefore, be dismissed with costs. There will be a fresh preliminary decree for foreclosure in the usual form, allowing time for payment up to 15th February 1946. The amount then payable will include interest up to that date. Counsel's fee Rs. 25.
D.R/D.H
10. Appeal dismissed.