Gurdial Singh Kehar Singh and Others vs Kartar Singh and Others

P.D. Sharma, J.—Kapur Singh and Ajmer Singh Defendants Nos. 1 and 4 mortgaged with possession their land including the lanu in dispute, 22 kanals 15 marlas in area, for Rs. 5,500/- in favour of Kenar Singh deceased father of Defendants Nos. 3 to 5. Subsequently, they mortgaged the land in dispute with possession in favour of Kartar singh the revenue authorities entered two mutations in the revenue records, one redeeming the first mortgage, and the second incorporating the subsequent mortgage, but these could not be sanctioned due to the disputes that had arisen between the parties. The Plaintiff Kartar Smgn, consequently instituted the present suit for a declaration that he was a mortgagee with possession of the land in dispute for Rs. 6,500/- and that the first mortgage had been redeemed. He alleged that the sum of Rs. 6,500/- was paid by him, vide receipt dated 8th June, 1956, to the mortgagors'' who in turn redeemed the first mortgage by paying Rs. 5,500/- on the same date to the mortgagees and obtained a receipt in token thereof.

Gurdial Singh Defendant No. 3 maintained that he along with his two brothers Defendants Nos. 4 and 5 was in possession of the land as mortgagee and that they had not received the mortgage money. He denied the Plaintiff''s mortgage. Defendants Nos. 1 and 2, however con-ceded having mortgaged the land for Rs. 5,500/- and not for Rs. 6,500/- in favour of the Plaintiff and further pleaded that the earlier mortgage had been redeemed by them on payment of Rs. 5,500/- to Defendants Nos. 3 to 5. According to them out of the land which had been mortgaged with Defendants Nos. 3 to 5, three kilss were in possession of the Plaintiff as mortgagee and the remaining four kilas were in their occupation.

From the pleadings of the parties the following issues were settled:

(1) Whether Defendants Nos. 1 and 2 mortgaged the land in suit with the Plaintiff for Rs. 6.500/-

(2) Whether the amount of Rs. 5,500/- the mortgage money, had been paid by the Plaintiff through Defendants Nos. 1 and 2 to Defendants Nos. 3 to 5?

(3) Whether the suit in. the present form does not

(4) Relief.

The learned trial Judge decided issue No 1 in favour of the Plaintiff and issue No. 3 against the Defendants. Issue No. 2 was found against the Plaintiff. the suit was dismissed. The learned Senior suborcinate Judge on appeal set aside the judgment and decree of the trial Court find granted Plaintiff the decree prayed for with costs against the Defendants. The first mortgagees, Defendants Nos. 3 to 5, preferred an appeal against the judgments and decree of the learned Senior suborcinate Judge to this Court which came up for hearing before. Khanna J.

The Plaintiff to prove redemption of the earner, mortgage relied upon the receipt dated 9th June, 1956 Exhibit D. 1. The trial Judge held the receipt inadmissible in evidence for want of registration, while the first appellate Court came to a contrary conclusion. The learned Counsel for Respondent No. 1 in the course, of his arguments before the learned Single Judge impugned correctness of the first appellate Court''s finding on the question of admissibility of the receipt in evidence. He referred to an earlier decision of this Court in Kaur Chand Vs. Defendants Raj and Others, , which laid down:

that where the mortgage money is discnargsd in for the mere statement that the mortgage is extinguished would be a mere surplusage because the very fact of the payment of the entire amount would ipso facto put an end to the mortgage. Nothing further has to be done by the mortgagee. It is only in those cases where the mortgage is extinguished on part-payment of the mortgage money that the endorsement which states that the mortgage is extinguished would require registration.

The learned Single Judge observed that in receipt Exhibit D. 1 the words "Arazi Mazkur Far Kar Dee Hai Yani Chhor Uee Hai," were not mere surplusage but an integral part thereof, and as such the receipt fell within the purview of Section 17(1)(c) of the Indian Registration Act and was thus inadmissible in evidence for want if registration. In his opinion the view he expressed was not in consonance with the rule of law as laid down in Kaur Chand''s case, 62'' Pun LR 566 : AIR 1960 Punj 529 and, therefore, desired that the point, "Does a receipt for payment or money, under a mortgage (other than an endorsement on a mortgage deed) issued by a mortgagee require registration when the receipt mentions not only the payment of the full mortgage amount but also the extinction of the mortgage" be decided by a larger Bench, in consequence, it has been placed before us for decision.

Sub-sections (1)(c) and (2)(xi) of Section 17 of the Indian Registration Act which are pertinent to the case run as follows:

(1) The following documents shall be registered, it the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, are this Act came or comes into force, namely:

X X X X

(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account or the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and

X X X X

(2) Nothing in Clauses (b) and (c) of Sub-section (1) applies to-

X X X X

(xi)any endorsement on a mortgage-deed acknowledging the payment of the whole or any part of the mortgage-money, any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or

X X X X

The learned Counsel for the Appellants contended that receipt Exhibit D. 1 was for payment of money due under a mortgage and it also purported to extinguisn the mortgage and that being so was not exempt from registration under Clause (xi) of Sub-section (2) of Section 1/of the Indian Registration Act. His contention finds ample Support from the plain language of the above provision or law and the decision taken by Tek Chand and Beckett (sic) in Naman v. Hari Singh AIR 1941 Lah 246, where tek chand J. while delivering judgment of the Court observed:

After giving the matter careful consideration I am or opinion that the exemption in this clause covers any endorsement on a mortgage deed acknowledging payment OR the whole or part of the mortgage money, irrespectively of whether it contains words which expressly or by necessary implication, purport to extinguish the mortgage. But as regards other receipts (i.e., receipts other than endorsements) for payment of money due under a mortgage, the exemption can be claimed only if they do not purport to extinguish the mortgage. This view is supported by, Gopalaswami Iyer v. Kalyana Rangappa AIR 1925 Mad 348, where the identical point was raised, venkata-subba Rao J., after referring to Clause (xi) observed as follows:

This clause contemplates : (1) an endorsement on a mortgage deed; and (Z) any other independent receipt for payment of money. In the case of an independent receipt it is necessary that it must not purport to extinguish the mortgage. But so far as an endorsement on the mortgage deed is concerned, no such limitation is placed.

The same principle was enunciated in (1) Koti Bharma Lingappa Vs. S. Nilakantappayya Wadiar and Others, (2) Muhammad Hussain v. Karm Ilahi AlR 1929 Lah 312 and (3) Mahamad Kasam v. Ranu Yesji Naik 9 Bom LR 254.

In Kaur Chand Vs. Defendants Raj and Others, , the question was whether the endorsements on me mortgage deeds acknowledging the payment of the entire mortgage money were admissible in evidence or not Manahan J. held that the endorsements were clearly admissible in evidence irrespective of the fact that the same purported to. Extinguish the mortgage. His observations could not have any bearing on the point in dispute Before us because here receipt of the mortgage money was not on the dorsal side of the mortgage deed but on a separate paper for which Clause (xi) of Sub-section (2) of Section 17 of the Indian Registration Act provided that such receipts would be admissible in evidence without registration if those did not purport to extinguish a mortgage.

The learned Counsel for Pandit Ram Kumar Missir and Another Vs. Pandit Ram Nath Missir, , which also laid down that endorsement on mortgage deed was inadmissible in evidence to prove extinguishment of mortgage unless registered but it could be used as evidence of payment. This rather supports the stand taken by the opposite party inasmuch as receipt Exhibit D. 1 was relied upon to prove extinguishment of the mortgage.

Another case cited before us was U. Kunhi Kutti Ali Hajl v. Kunnam Mithal Kottaprath Abdul Rahim AIR 19 Mad 288, but in that as well it was held that language or the receipt did not indicate any intention to extinguish or limit the mortgagor''s interest and, therefore, registration was unnecessary. In the instant case the receipt in so many words purports to extinglish the mortgage and so the Madras case can be of no help to the Respondent.

The third case, Rajani Kanta Nath Bhoumik Vs. Ali Noaz and Others, , cited by the Respondent''s counsel also is of no avail to him because it is not clear whether the receipt granted therein by the mortgagee to the mortgagor in so many words purported to extinguish the mortgage the usutructuary mortgagee admitted that his claim had been paid off and that he had released the property to the mortgagor''s possession. The recital did not purport to extinguish the mortgage though the same might have led to it.

Keeping in view the plain language of Sub-sections (c) and (2)(xi) of Section 17 of the Indian Registration Act and the rule of law as laid down in the authorities cited by the learned Counsel for the Appellants we (sic) that a receipt for payment of money under a mortgage (other than an endorsement on a mortgage deed) issued by a mortgagee mentioning not only the payment of the full mortgage amount but also the extinction of the mortgage requires registration. The reference is answered accordingly.

The case should now go back to the learned Single Judge for disposal on merits.

Tek Chand, j.:

I agree.