Lal Chand vs Kasturi Lal and others

B.S. Yadav, J.—It is not necessary to give the facts in the present case as the only question involved is if the receipt, Exhibit P. 1, executed by Lal Chand Defendant is admissible in evidence or not. Suffice it to say that Kasturi Lal Plaintiff (now Respondent) had filed a suit against the present Appellant Lal Chand for possession of the suit land on the ground that he had redeemed the mortgage by paying the mortgage money amounting to Rs. 872/- to the said Defendant. The other Defendants, who are now Respondent Nos. 2 to 6, were made proforma Defendants. Lal Chand Defendant had denied the receipt of the money and about the redemption of the land. During evidence the Plaintiff produced receipt Exhibit P. 1 about the payment of Rs. 872/- to Lal Chand Defendant in connection with the said mortgage. The learned trial court held that the receipt required compulsory registration and as it was not registered, it was not admissible in evidence. Consequently, the Plaintiff''s suit was dismissed. Feeling aggrieved, he filed an appeal which was heard by learned Senior Subordinate Judge (with Enhanced Appellate Powers), Ambala. He held that the receipt was admissible in evidence even though not registered. Consequently, he accepted the appeal granted a decree for possession of the suit land in favour of the Plaintiff. Now Lal Chand Defendant has come to this Court in Second Appeal.

Before I proceed further it becomes necessary to reproduce here the relevant provisions of the Registration Act.

17(1). The following documents shall be registered, if the property to which they relate is situated 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, or this Act came or comes into force, namely,-

(a) xx xx xx

(b) other non-testamentary instruments which purports or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contigent, of the value of one hundred rupees and upwards, to or in immovable property;

(c) 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, title or interest; and

XX XX XX XX

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

to-

XX XX XX XX

(xi) 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 under a mortgage when the receipt does not purport to extinguish the mortgage; or

XX XX XX xx

I may also take notice here of the contents of the receipt Exhibit P. 1 which has been proved to have been executed by Lal Chand Defendant. It is Urdu. When translated into English its relevant portion somewhat reads as follows:-

I, Lal Chand ..............have received Rs. 872/-, half of which is Rs. 436/- in connection with about 9 kanals of mortgaged land from Babu Kasturi Lal.................. Receipt has been executed so that it may be used at the time of need.

The question that arises is that under which of the above quoted clauses of Section 17 of the Act the receipt in question falls.

The learned Counsel for the Appellant argued that the above receipt falls either under Clause (b) or (c) of Section 17(1) of the Act. In support of his contention he has relied upon AIR 1934 970 (Lahore) In that case the receipt recited four oral mortgages which were said to have been executed previously. The document recorded the receipt of the consideration of those mortgages on the date of execution of the receipt. It was held that the document in question falls within Section 17(1)(c) of the Act and required compulsory registration. For arriving on that conclusion it was remarked:-

The document in question records the receipt of the money due upon these four oral mortgages. It is clear that the money due upon the mortgages can only be properly described as the consideration of these mortgages. The words of S. 17(1) (c) are as follows:-

''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, title or interest.''

that is, any right, title or interest in the immovable property. Such instruments under this Act require registration. The important words in this clause are "the payment of any consideration on account of the creation.........of any such rights.

When the oral transactions alluded to in the document were entered into the consideration was agreed between the mortgrgor and the mortgagee. It does not appear to us to matter whether that consideration was paid at the time or paid later. Any document which acknowledges the receipt of that consideration clearly comes under the terms of S. 17(1)(c)." Clearly the present receipt cannot be said to be falling under Clause (c) of Section 17(1) as it does not acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment limitation or extinction of any such right, title or interest.

The next authority relied upon by the learned Counsel for the Appellant was Wadhwa Singh v. Kunj Lal A. I. R. 1938 Lah. 397: (1938) 40 P. L. R. 833. In that case the receipt was executed about the receipt of mortgage debt. The receipt further recited that the mortgagee had been put in possession of the mortgaged land and that he would remain in possession till redemption by the mortgagor by payment of the mortgage money in the month of Magh or Jeth and during that period the mortgagee was to receive the rents and profits accruing from the property and appropriate the same in lieu of interest. In the grounds of Second Appeal it was averred that it was merely a memorandum of an already accomplished transaction but that contention was abandoned at the hearing and it was conceded by the learned Counsel for the Appellant that the document contained all the terms of the mortgage and it was the sole repository of the transaction. Clearly, those arguments brought the document falling under Clause 17(1)(b) of the Act. Faced with that situation it was urged in the alternative that the document was merely a receipt acknowledging payment of Rs. 600/- as consideration of the mortgage. In view of that description given of the document, it clearly fell under Clause (c) of section 17(1) of the Act and relying upon Ghulam Mohammad''s case (supra) it was held by his lordship who decided that case that it was not admissible as receipt. That ruling is also not applicable to the facts of the present case.

I am of the opinion that the document in question falls u/s 17(2) (xi) of the Act. That clause can be split into two parts. One part relates to an endorsement on a mortgage-deed acknowledging the payment of whole or any part of the mortgage-money. The latter portion relates to an independent receipt for payment of money due under mortgage when it does not purport to extinguish the mortgage. Such receipt is exempt from registration. In the present case we arc concerned with an independent receipt falling under the latter part of that clause. The language of the receipt does not indicate any intention to extinguish or limit the mortgagor''s interest. Therefore, registration is not required. Reference can be made to Kaur Chand Vs. Defendants Raj and Others, wherein it was remarked after quoting above Clause (xi).

There is a conflict of opinon as to the interpretation of this provision, but it seems to me that the correct view is that where the mortgage money is discharged in full 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. I am fortified in my view by the decision of the Bombay High Court reported as Mohammad Kasam v. Renu Yesji. 9 Bom. L. R. 254 wherein Batty J. observed as under:-

Endorsements or receipts acknowledging satisfaction of a mortgage by the payment of the whole mortgage money, would not be compulsorily registrable under Clause (n) of the same section. But the clause indicates that an operative instrument which not merely evidences the satisfaction of a mortgage, but which is a transaction annulling an interest by a new act of will between the parties, is compulsorily registrable as ruled in Uppalakandi v. Kunnam, I. L. R. 19 Mad. 288. The distinction more explicity stated appears to be as follows. A payment made in discharge of an existing obligation, as in paying off a mortgage-debt according to its tenor, is a payment made in satisfaction of that obligation and is not technically "consideration" paid in order to obtain the extinction of that obligation. In other words, the extinction of an obligation, when it is effected by the performance or satisfaction of the obligation according to its terms, follows from the terms of that obligation and is not induced by any new consideration. And neither Clause (b) nor Clause (n) requires registration in respect of the mere satisfaction or performance of the pre-existing obligation. Those clauses require registration only when money or other value is paid or passed as consideration for a novation or new agreement by a fresh act of the parties, the effect of which is to do away with the old obligation not by accepting performance thereof, but on receiving a sum paid for the benefit of the new agreement.

Though that case related to the receipt of mortgage money on the dorsal side of the mortgage deed but I do not find reason as to why that could not be applied to an independent receipt falling under that clause. The effect of the receipt Exhibit P. 1 is not to do away with the old obligation. It only recties the receipt of money due under the mortgage.

On behalf of the Appellant reliance was also placed upon Gur-dial Singh Kehar Singh v. Kartar Singh A. I. R. 1964 P&H 141, wherein a Division Bench of this Court remarked as follows:-

Keeping in view the plain language of Sub-Sections 1 (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 hold that a receipt for payment of money under a mortgage (other than an endorsement on a mortgage deed) issued by a mortgage mentioning not only the payment of the full mortgage amount but also the extinction of the mortgage requires registration.

As noticed earlier, the document in question, expressly or impliedly does not purport to extinguish the mortgage.

For the foregoing reasons it is held that the receipt in question is not compulsorily registrable and is, therefore, admissible in evidence.

No other point was raised. Consequently, I do not find any force in the present appeal and the same is hereby dismissed with no order as to costs.