Chundooru Lakshmana Setti vs Duggisetty Chenchuramayya and Others

Abdur Rahim, J.—The only question that we have to deal with in this second appeal is whether Ex. 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 Section 17 of the Registration Act.

On the date of Ex. V. more than Rs. 3000 was due, and the balance which the plaintiff agreed to relinquish under Ex. V. amounted much 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. Section 17, Clause (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 one hundred rupees and upwards,

to or in Immovable property"" must be registered. The exception which it is argued, applies to Ex. V is dealt with in Clause (11) of Sub-section 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 Immovable 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 Clause 11 of Sub-section 2, in exempting from the

operation of that clause receipts purporting to extinguish the mortgage, tends to support the same view. Though Clause (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 Hussain ILR (1912) A. 48 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 rukkee which introduced a new mode of paying

off the mortgage money were held to be inadmissible, on the ground that it was an instrument ''purporting to limit or extinguish interest in

Immovable property'' within the meaning of Clause (b) of Section 17. In Durga Prasad Singh v. Rajendra Narain Bagshi ILR (1913) C. 493 their

Lordships affirmed the judgment of the Calcutta High Court in Durga Prasad Singh v. Rajendra Narain Bahshi ILR (1906) C. 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 Banhi (1899) I.L.R 26 C. 707. (P.C.) 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 Gobardan Sahi v. Jadhunath Rai ILR (1913) A. 202 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 Section 17 Clause (n) of the Indian

Registration Act, 1877, which corresponds to Clause (11) of sub-section 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 Shidlingappa v.

Chenbasappa ILR (1879) B. 235. 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 this decision really throws much

light upon the question we have to deal with here. There is a decision however in Kailash Chandra Nath v. Sheik Chenu ILR (1914) C. 546 which

does support the respondents'' 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 Section 17,

Clause (b) of the Registration Act was discussed; and the learned Judges refer only to Section 92 of the Evidence Act which requires that such an

agreement must be in writing,

I hold therefore that Ex. V is inadmissible in evidence.

The appeal 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 Clause (b) of Section 17.

Sub-section 2 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

Clause (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 any 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 Clause (b), as I have pointed out, contains the words ""limit or extinguish"" and turning to

sub-section 2 which is the amendment, we find this ""Nothing in Clause (b) applies to...clause (IX) ""any endorsement on a mortgage deed

acknowledging the payment, of the whole or any part of the mortgage money, and another 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 Clause (b). The same meaning must of course be attached to the words '' right, title, and interest'' when you are dealing with the

question of limitation as 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 an ''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 does 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 Clause (b) the document itself would not be necessarily registrable under Clause (b), so that that portion of sub-section 2 Clause (XI)

which takes such receipts, out of the operation of Clause (b), and also that part which leaves them within it would neither of them have any

operation on the reading suggested by Mr. Krishnaswami as there would be ''no interest'' to be extinguished and so the whole of clause XI would

be meaningless.

I am therefore clear that Clause (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.