Munuswami Mudaliar, Sellaperumal Mudaliar, B. Govinda Pillai and N. Ramanatha Aiyar vs Govindaraja Chettiar and Another

Ramesam, J.—The facts out of which this appeal arises are as follows: The first defendant executed a deed of mortgage (Ex. A), dated 30th

October, 1913, for Rs. 3,515 and odd in favour of Subbaraya Mudaliar and Ekambara Mudaliar. The two mortgagees afterwards died each

leaving a minor son. The mortgagor afterwards sold half of the mortgaged property to the fourth defendant under Ex. I, dated 27th March, 1916.

The amount of consideration for sale was paid to the mortgagees. The suit is now brought for the balance due on the mortgage. But the property

sold under Ex. I is also sought to be sold along with the other property. The fourth defendant in his statement pleaded that some time before the

sale he and the first defendant went to the sons of the original mortgagees who were at that time minors represented by mothers as their guardians

and offered to pay them half the mortgage amount then due to them in consideration of their accepting it in full Satisfaction of their claim against the

properties intended to be purchased by him: The mortgagees agreed not to proceed against the property sold, if the consideration is duly paid to

them: Accordingly, the property was purchased under Ex. I and the consideration amount was paid to the mortgagees: A receipt was also taken

which is Ex. II, dated 7th November, 1916. The fourth defendant therefore contended that the property purchased by him under Ex. I has been

released from the mortgage.

In the Court below a question arose as to whether Ex. II was admissible in evidence. The learned Subordinate Judge who tried the case, held

that it is admissible u/s 17(2), (xi) of the Registration Act and therefore dismissed the plaintiff''s suit so far as the property purchased under Ex. I is

concerned. He gave a decree against the rest of the property. The plaintiff appeals seeking to make the property purchased by fourth defendant

also liable.

In so far as Ex. II, is a receipt, no doubt it is admissible in evidence. But there are certain parts of the document which show that it is something

more than a mere receipt. It says:

As Rs. 1,900 has been received by us, we have released only the lands purchased by you from our mortgage deed.

In so far as this portion of it is concerned, it is also a release and from this point of view, the document is not admissible in evidence. But apart

from Ex. II, we have got the oral evidence of D.Ws. 1 and 2. According to D.W. 2 some time before the sale-deed the purchaser and the first

defendant with the help of an intermediary Thangavelu went to the mortgagees and the mortgagees promised them to release half of the property if

the purchaser paid the price into the hands of the mortgagees. The payment was to be made partly in discharge of the mortgage amount and Rs.

625 in discharge of another unsecured debt due by the mortgagees. We think this evidence shows that there was a binding contract between the

parties, the effect of the contract being that if the purchaser paid down the amount to the mortgagees they should give him a release. Afterwards,

when the amount was paid, the mortgagees accepted the amount and at the time of the acceptance they did not show by their conduct that they

wished to resile or go behind the contract already made. The only meaning that could be attributed to the acceptance of the amount is that they

thereby released the property from the mortgage. If according to law the release of a part of the mortgaged property from the mortgage requires to

be in writing and registered, then this will not be enough. But if this is enough to amount to a complete release, we do not see any reason why the

conduct of the mortgagees does not amount to a complete release. It has been held by Krishnan, J., in S.A. No. 797 of 1921 that there is no law

in India whereby a release of mortgage should be in writing and registered. If there is a contract of release between a mortgagor and a mortgagee it

may be that u/s 92(4) of the Evidence Act it should be in writing and then it should also be registered under the Registration Act. But where the

contract to release is not between a mortgagor and a mortgagee but between a mortgagee and a stranger as in this case, neither the Transfer of

Property Act nor the Evidence Act applies and the decision of Krishnan, J., applies; that is, there may be an oral release of the property

purchased, from the mortgagee. It may be that this result cannot be arrived at if the agreement of release is after the purchase, for in such a case

the purchaser would be a representative of the mortgagor. But in the present case the contract to release half of the property was prior to Ex. I. In

such a case there is no legal difficulty in the way of holding that there can be an oral release of part of the mortgaged property. Accordingly, we

hold that in this case with the acceptance of the purchase-money there is a complete release under Ex. I and the plaintiff is not entitled to seek a

decree for sale as against the property sold. The appeal is therefore dismissed with costs. As the first appellant is a minor he will not be personally

liable but only his estate will be liable.

The lower Court disallowed costs to defendants 4 and 5. On the view we have taken we do not see any reason why they should be deprived of

their costs. The Memorandum of objections is allowed but there will be no order as to costs in the Memorandum of Objections.