Dronamraju Rama Rao and Others vs Vissapragada Vedayya and Others

Phillips, J.—In this suit it has been found one square yard of house site was included in the mortgage deed merely to give jurisdiction to the

Peddapur Sub-Registrar, who registered the document, whereas the property really intended to be mortgaged was situated in Amalapur.

Following the decisions in Harendra Lal Roy Choudhri v. Haridasi Debt 27 M.L.J. 80 and in Biswanath Prasad. v. Chandra Narayan Choudhry

ILR (1921) Cal. 509 it has been held that the mortgage deed is invalid as being ""in fraud of the registration law.

The learned Subordinate Judge has, however, found that the personal covenant to repay is not invalid, and has given a decree for that part of the

claim that is not barred by limitation, holding that Article 116 of the Limitation Act is applicable, in accordance with the ruling of Amir Ali, J. in

Joginee Mohan Chatterjee v. Bhoothnath Ghosal ILR (1902) Cal. 654. In appeal it is contended that that ruling is wrong, and that, as the

registration of the mortgage deed is invalid, the document as a whole must be treated as unregistered, and consequently the covenant to repay must

also be treated as an unregistered covenant.

What was held by the Privy Council in Harendra Lal Roy Choudhri v. Hari Dan Debt 27 M.L.J. 80 and upheld in Biswanath Prasad v. Chandra

Narayan Chowdhry ILR (1921) Cal. 509 was that ""an entry intentionally made use of by the parties for the purpose of obtaining registration in a

district where no part of the property actually charged and intended to be charged in fact exists is a fraud on the registration law, and no

registration obtained by means thereof is valid. ""The principle which I take to underlie this decision is that no person shall be allowed to take

advantage of his own fraud. If that principle be applied to the present case the object attained by the fraud was the registration of the mortgage

deed as such, for had the document been merely a covenant to repay, the Peddapur Sub-Registrar would have had jurisdiction u/s 29 of the

Registration Act (Act XVI of 1908) for under that section parties are at liberty to choose their own place of registration. In so far then as the

document evidenced a mere covenant to repay there was no fraud upon the registration law, and to hold that such registration was invalid would

be to extend the principle above mentioned so as to deprive a party of a right which he had not obtained by fraud as well as of the advantage

gained by his fraud. To do this appears to me to extend the principle to inequitable length and 1 am supported in this view not only by the direct

ruling of Amir Ali, J. in, Joginee Mohan Chatterjee v. Bhootnath Ghosal ILR (1902) Cal. 654, but also by the action of the Privy Council in the

case reported in Biswanath Prasad v. Chandra Narayan Choudhry ILR (1921) Cal. 509, for that case was remitted to the Calcutta High Court for

a decision as to whether the plaintiff had a valid alternative claim for a personal judgment for the mortgage, debt. No doubt there was no finding

that the claim for a personal decree was based upon a contract in writing registered, but it would appear from a perusal of the argument in the case

reported in 25 C.W.N. 985 that a period of limitation of 6 years was contemplated, the argument being that a payment of interest in 1903 would

save limitation for the suit brought in 1908. Unless it was the opinion of the Court that the debt was secured by a registered instrument the

argument would have been of no avail, for such a payment was not within 3 years of institution of the suit, and the suit would have been barred if

based upon the personal covenant. Had that been the case it appears to me improbable that the case would have been remitted for a consideration

of the. claim. I am therefore of opinion that the decision in Joginee Mohun Chatterjee v. Bhootnath Ghosal ILR (1902) Cal. 654 , is right and that

the registration of the personal covenant to repay is not procured by fraud and is consequently valid. The other cases cited Amba alias Padmawathi

v. Shrinivasa Kamathi (1921) 26 C.W.N. 369 and Ramnarayan Singh v. Adhindranath Mukerjee 32 M.L.J. 39 do not appear to have any bearing

on the present case and the facts reported in Shamlal v. Thehariya Lakshmichand (1920) 18 A.L.J. 476 are too vague to give that case any value

here. The Second appeal is accordingly dismissed with costs. The Memo, of Objections must also be dismissed with costs as the lower Court

exercised its discretion in awarding a personal remedy and was entitled in so'' doing to reduce the rate of interest contracted for in the mortgage

deed.

Devadoss, J.

The plaintiff brought the suit as transferee of an hypothecation bond executed by the 1st defendant in favour of one Seshayya impleading

defendants 2 to 4, the sons of the 1st defendant, defendants 5 to 7, the undivided sons of Seshayya and the alienees of some portions of the

hypothecation. Various contentions were raised by the defendants. The District Munsif of Amalapuram dismissed the suit on the ground that the

registration of the document was invalid as a parcel of land not belonging to the defendants 1 to 4 was included in the document only for the

purpose of giving jurisdiction to the Sub Registrar who registered the document and that the claim was barred by limitation. On appeal the

Subordinate Judge of Rajahmundry held that the document was invalid as a mortgage deed, and that the suit was not barred by ""limitation and gave

a money decree to the plaintiff. The defendants 1, 2, 4 and 11 have preferred the second appeal.

It is contended by Mr. Narayanamurthi for the appellants that the registration of the document was in fraud of the registration law and that the

document cannot be treated as a registered document for any purpose, and therefore article 116 of the Limitation Act did not apply to the case,

and he relied upon Harendralal Roy Choudhri v. Haridasi Debi 27 M.L.J. 80, Biswanath Prasad v. Chandra Narayan, Choudhri ILR (1921) Cal.

509, Amba alias Padmavathi v. Srinivasa Kamathi (1921) 26 C.W.N. 369 and Kalka v. Mathuradasi 32 M.L.J. 39. In Harendra Lal Roy

Choudhri v. Haridasi Debi 27 M.L.J. 80 the plaintiff brought the suit upon a mortgage deed registered in Calcutta. The defendant contended

among other things that the deed had not been legally registered because no portion of the property mortgaged was situate in Calcutta. It was

found that the only portion of the property alleged to be in Calcutta was described as ""25, Gurudas Street "". But the property so described was

found to be nonexistent. Their Lordships of the Privy Council held ""that this parcel is in fact a fictitious entry, and represents no property that the

mortgagor possessed, or intended to mortgage, or that the mortgagee intended to form part of his security. Such an entry intentionally made use of

by the parties for the purpose of obtaining registration in a district where no part of the property actually charged and intended to be charged in

fact exists, is a fraud on the Registration law, and no registration obtained by means thereof is valid. To hold otherwise would amount to saying that

mortgages relating solely to land in other parts of the Presidency could be validly registered by the Sub-Registrar at Calcutta if the parties merely

took the precaution to add as a last parcel, Government House, Calcutta, or any similar item."" In Biswanath Prasad v. Chandra Narayan

Choudhury ILR (1921) Cal. 509 ""a mortgage bond for Rs. 8,000 which purported to mortgage a 7 annas share in a village in the Dharbhunga

district and a one kauri share in the Mozafferpur district was registered only in the Mozafferpur district. The mortgagor had purchased the one

kauri share shortly before the execution of the mortgage and in order that he might register in Mozafferpur. He paid Rs. 50 for the one kauri share,

but there was no registered instrument or delivery of possession as required by Section 54 of the Transfer of Property Act, 1882. Their Lordships

found that none of the parties intended that the one kauri share should rest in the mortgagor, or pass under the mortgage. "" Viscount Finlay in

delivering the judgment of their Lordships observed: ""In coming to the conclusion that this appeal must be dismissed, their Lordships judgment rests

on the view that none of the parties ever intended that the one kauri share in Muza kolhua should vest in Udit (Narayan) or should pass by the

mortgage from him to the mortgagee. This case differs toto coelo from the case suggested in argument of a mere failure to make a good title to

property dealt with by the instrument, and which both parties had intended should form part of the security. "" With regard to the contention that a

personal decree should be passed in favour of the plaintiff the noble Viscount observed: ""As regards the alternative claim for a personal judgment

for the mortgage debt, it is to be observed that no such claim was made in the Courts in India. There is nothing in the evidence or in the judgments

which would enable their Lordships to deal with such a claim. At the same time their Lordships think it desirable in this case that the plaintiffs

should have an opportunity of bringing this matter before the High Court. If any such application is made, it will be for the High Court to consider

whether any such claim is open upon the present pleadings and, if not, whether any amendment raising it should be made; and further whether

under all the circumstances the claim should be entertained at this stage of the proceedings. If the High Court should think it right to enter upon the

consideration of this claim, all defences on the merits or arising out of the lapse of time must be open to the defendants, and the High Court should

have however to impose any terms which it thinks just and to deal with the costs. The appeal so far as it relates to the enforcement of the mortgage

on the land, must, in their Lordships'' opinion, be dismissed. ""In that case the mortgage bond was dated 27th February, 1902; the amount of the

bond was payable on 7-9-1902. The suit was instituted on 14th September, 1908. It may be safely assumed that the plaintiff could not have

expected to get a personal decree against the mortgagor unless Article 116 was held applicable to the case. No doubt the respondents were not

represented before the Privy Council. But it is quite clear, from the order of their Lordships remanding the case to the High Court to enable the

plaintiff to amend his plaint and claim a personal decree, that they thought that the personal remedy was not barred. Though their Lordships did not

say so in so many words in their judgment, it is quite apparent what their view was from the observation of their Lordships in the course of the

argument

With reference to the contention of the appellant''s counsel that ""in any case there is no reason why we should not have a personal decree for

money. ""Sir John Edge observed ""If this was merely a suit to recover money, would not limitation have run ""and counsel for the appellant answered

No, payment of interest saves it. ""Then Lord Shaw said: ""That payment of interest was in 1903.

The contention that the registration which is ineffectual to validate a document required by law to be registered cannot avail for any other

purpose seems untenable.

u/s 17 of the Registration Act, certain classes of documents

(1) gifts of Immovable property;

(2) non-testamentary instruments, which purport, or operate to create, declare, assign, limit or extinguish, any title or interest in Immovable

property of over Rs. 100 in value;

(3) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration,

assignment, limitation or extinction of any such right or interest;

(4) leases of Immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;

are required to be registered in order to be valid, and if they are not registered, u/s 49 of the Act, they cannot affect the Immovable property

comprised therein or shall be received as evidence of any transaction affecting such property. Other documents are registerable at the option of the

parties. u/s 28 of the Act the class of documents mentioned in Section 17, Sub-section (1), Clauses (a), (b), (c) and (d), and Section 18, Clauses

(a), (b) and (c), shall be presented for registration in the office of a Sub-Registrar within whose sub-district the whole or some portion of the

property to which such document relates is situate. By Section 29 every document other than those referred to in Section 28 may be presented for

registration either in the office of the Sub-Registrar in whose sub-district the document is executed* or in the office of any other Sub-Registrar at

which all the persons desire to executing the same. There is nothing in the Registration Act therefore to prevent the registration of a simple money

bond in the office of any Sub-Registrar at which the parties desire to have the document registered.

A simple mortgage usually contains a personal covenant to pay. In fact in almost all the mortgage transactions in this Presidency there is a

personal covenant by the mortgagor to repay the mortgage amounts personally. The portion of the document in which there is a transfer of specific

Immovable property as security for money is severable from the portion in which the mortgagor undertake to repay personally the money

advanced or to be advanced to him. Where a document consists of two or more parts, or where there are two or more covenants in a document,

the mere fact that one part becomes inoperative or invalid by reason of non-compliance, with or violation of the provisions of the Registration Act

need not necessarily make the other parts of the document invalid or inoperative. Though that portion of the document which by law is required to

be registered would be in-Valid unless registered in accordance with the rules governing registration of documents, yet the portion of the document

optionally registerable would be valid as the parties have consented to present it in the office of the Sub-Registrar by whom it is registered. It is

clear from the observations at page ILR 48 Cal. 509 ""the appeal so far as it relates to the enforcement of the mortgage on the land, must, in their

Lordships'' opinion, be dismissed ""that their Lordships did consider the document to be a valid one so far as the claim for a money decree was

concerned.

The case in 26 C.W.N. 369 has no application to this case. Their Lordships observe: ""It was not and is not disputed that those two deeds

cannot be given in evidence or enforced if they have not been duly registered Their Lordships are clearly of opinion that as the appellant was not

only a minor but a married woman, her father had ceased to be her natural guardian and had never been appointed her legal guardian and was not

therefore her assignee or representative within the meaning of Section 3 of the Registration Act, 1877. He was not an executant of the said deeds

or either of them. Neither was within the meaning of Section 34 of that Act the representative, assign or agent duly authorised on behalf of Krishna

Kamakthi deceased, the only executant. The presentation by him of the two deeds for registration was in direct conflict with the express provisions

of the 34th section. The deeds were consequently never legally registered. The registration of them which was procured was illegal, invalid and a

nullity; and if that be so, as in their Lordships'' opinion it must be held to be, it is not disputed that the deeds would be void and unenforcible. "" In

that case there was no valid presentation of the document, and not as in the present, all the parties to the document wanted to get round the

provisions of the Registration Act by recitals intended to mislead the Sub-Registrar, to do what he would not otherwise have done. The registration

of a document by false personation would be no registration at all, and the documents being a fraudulent document becomes unenforcible, against

the party sought to be bound by it as he never consented to the registration being effectual by a person falsely personating the executant. That class

of cases differs from the present where both parties with their eyes open get a document registered with the intention of treating the document as a

validly registered document, but for purposes of convenience or other reasons they violate the specific provisions of Section 28 which requires that

documents of a certain class should be registered by a Sub-Registrar within whose sub-district the whole or any portion of the property comprised

in the document is situate. The case in 50 I.C. 220 is of the Judicial Commissioner''s Court of Oudh. No doubt the Judicial Commissioner held that

when registration is invalid for one purpose it is invalid for all purposes. This view is evidently on the assumption that all the covenants in a

document and all the parts of a document form one indivisible whole. A mortgage deed, as I have said above, contains more than one part and

more than one covenant. A mortgagee can give up his security and sue on the personal covenant alone. He may choose to sue for all or any of the

remedies in respect of it. To read an ordinary mortgage document as one indivisible whole is opposed to the recitals therein and the intention of the

parties to the document.

Mr. Lakshmanna for the respondent relied upon Ram Narayan Singh v. Adhindranath Mukherjee 32 M.L.J. 39. It was a case in which a

mortgage document which by law is required to be attested by two or more witnesses was not so attested. Their Lordships of the Privy Council

held that the document could not be treated as a mortgage document as it contravened the provisions of law which laid down the essentials for a

valid mortgage deed, and the absence of the necessary requisite prevented the document, taking effect as a mortgage. But it was treated as a

simple money bond. The case which is directly in point is the decision of Mr. Justice Ameer Ali (now a member of the Judicial Committee of the

Privy Council) reported in Joginee Mohun Chatterjee v. Bhut Nath Ghosal ILR (1902) Cal. 654. The learned Judge observed: ""I am not satisfied

that there was any such property as No. 251-2 belonging to the defendant within the jurisdiction of the Sub-Registrar of Sealdah so as to give him

u/s 2800 of the Registration Act jurisdiction to register the document. If I am right in that conclusion, it follows that the document cannot take effect

as a mortgage deed; but as it is registered, although the suit has been brought more than three years after the date of execution, the claim is not

barred as was contended for by the defendant''s counsel. "" This decision was long before the ruling of the Privy Council reported in ILR 41 Cal.

972 , which settled the law on this point. Though the learned Judge did not give reasons for holding that the document which was invalid as a

mortgage on account of want of jurisdiction of the Sub-Registrar who registered the document was a valid document for purposes of limitation, yet

his opinion is entitled to great weight, and it is in consonance with reason. The Registration Act does not prohibit the use of a document as a

registered one if the provisions of Section 28 of the Act are contravened. If a document is otherwise properly registered there can be no objection

to the use of it as a registered one. I therefore hold that the plaint document is a registered document so far as the personal covenant contained in it

is concerned, and therefore Article 116 of the Limitation Act applies to the case. The Subordinate Judge has rightly held that the suit is not barred

by Limitation. The second appeal fails and is dismissed with costs.

The plaintiff did not sue in the first instance or the personal covenant alone. He based his suit on the footing of a valid mortgage and prayed for

a mortgage decree. In the circumstances the rate of interest allowed to him by the Lower Appellate Court is fair, and there is no reason to interfere

with the discretion of the lower appellate Court. The memorandum of objections is dismissed with costs.