C.R.N. Kandaswamy Chettiar vs Pakkiriswamy Pillai and Another

Madhavan Nair, J.—This second appeal arises out of a suit instituted on a mortgage bond, Ex. A, dated 8th March 1911, executed by

defendant 1 to one Swayamprabai Ammal for Rs 3,000 and assigned by the latter to the plaintiff under Ex. E dated 11th January 1922. In

modification of the decree passed by the District Munsif in favour of the plaintiff, the appellate Court exonerated items 1 and 3 of the suit property

on the ground that these had been redeemed by defendants 4 and 3 respectively. This second appeal by the plaintiff relates solely to those items.

To discharge the mortgage debt defendant 1 sold item 1 under Ex. 1 to defendant 4 for Rs. 1,900 and item 3 under Ex.5 to defendant 3 for Rs

1,000. Under the sale-deeds, these defendants were required to redeem these item) from the mortgage under Ex. A. ''They claim in this suit to

have redeemed those items They obtained receipt, Exs. O and Order 1 from the mortgagee for the gum paid by them. It is admitted that the

payments were made by these defendants. It is also admitted that endorsement was made on the mortgage bond to the effect that the payments

had been made and that the items have been released. Bat this endorsement has not been signed by anybody. The receipts given to those

defendants after reciting the fact of payment state:

This itself shall be treated as receipt for the above sum...having been credited to the above mortgage deed and the said property having been

released from the above mortgage deed, and I have herewith given the title-deed relating to the said property: See Ex. O.

The receipts are stamped each with one anna but these and the endorsement on Ex A have not been registered.

It is argued on behalf of the appellant that the endorsements and the receipts which form the only evidence in support of the plea that items 1

and 3 have been exonerated from the mortgage should not be admitted in evidence as they have not been registered as required u/s 17, Clause (b),

Registration Act, and that, if this evidence is excluded, then there is nothing to show that items 1 and 3 have been released from the mortgage and

that therefore it would follow that these items should remain subject to the suit mortgage. The respondents contend that the receipts by themselves

do not release the property from the mortgage, but they are receipts only for the payment of money which do not require registration and that their

language shows that these items were released from the mortgage before the receipts were executed. Their further contention is that there was an

oral agreement between the vendees and the mortgagee to release these properties, that this was followed by actual payment and that such an

agreement and payment in proof of the discharge of the mortgage liability on these items can be proved without contravening the provisions of

Section 92, Evidence Act

We are satisfied that the language of the receipts shows that the items must have been released from the mortgage before the date of the

receipts, that they do not purport to extinguish or release an interest in immovable property and that therefore, these do not require registration and

are admissible in evidence to prove the factum of payment by the vendees. The plaintiff''s counsel states that the plea that there was an oral

agreement to release the items has not been found as a fact to be true by the learned Subordinate Judge and therefore this part of the argument

should not be accepted. It is true that there is no specific finding on this point by the lower Court. But there are materials in the judgment which

show clearly that the learned Judge''s view was that there was such an agreement between the vendees and the mortgagees. The first Court found

against the agreement. In para 12 the learned Subordinate Judge concludes upon the evidence that the transfer by Swayamorabai Animal

was fraudulent and intended to defraud the defendants by denying the purpose with which she made the endorsement on Ex. A and granted the

receipts Ex. 0 series.

Further he says in para. 14:

I should treat the transactions as redemptions by the mortgagor''s vendees of the particular items with the consent of the mortgages and not as

relinquishments of interest in immovable property made by the mortgagee.

These statements would show that the learned Subordinate Judge was prepared to accept the view that there was an agreement between the

vendees and the mortgagee to redeem the mortgage on these items and that such redemption was effected by the vendees in pursuance of the

agreement by actual payment. The evidence in the ease which we have examined also supports the same view. There is authority to show that one

of several mortgagors can enter into an oral agreement with the mortgagee for the redemption of his share only of the mortgage and that proof of

such an oral agreement by which money is paid and his share is redeemed is not precluded by Section 92 prov. 4, Evidence Act: see G. Subba

Rao v. V. Narasimhanm [1094] 27 Mad. 368 This is what had happened in the present case. By defendant 1''s sale of the various mortgaged

properties to defendants 3 and 4 and others the vendees became along with defendant 1, the mortgagors of the suit property and two of them,

defendants 3 and 4, entered into an oral agreement with the mortgagee for the redemption of the items sold to them, and in pursuance of that

agreement they paid their portion of the mortgage amount and redeemed the items in question. In such circumstances, as pointed in G. Subba Row

v. V. Narasimham [1094] 27 Mad. 368 the proof of the oral agreement and the payment does, not amount to a rescission of the contract of

mortgage, but only shows that, so far as defendants 3 and 4 are concerned as between themselves and the mortgagee, they are discharged from

the contract so far as that is possible. We agree, therefore, with the Subordinate Judge''s view that in the circumstances of this case the vendee of

items 1 and 3 namely, defendants 4 and 3, have with the consent of the mortgagee redeemed those items and that those items are not therefore

subject to the suit mortgage. In the result this second appeal must be dismissed with costs.