Pandit Ram Kumar Missir and Another vs Pandit Ram Nath Missir

Meredith, J.—This second appeal is by plaintiffs in a rent suit. The defendant respondent, Ramnath Missir, owned two annas proprietary share in village Karhari, tauzi No. 2853. On 10th September 1929, he gave six pies out of his two annas share in usufructuary mortgage to the plaintiffs for a sum of Rs. 632-6-0 by a registered deed. Next day, 11th September 1929, he created another rehan in plaintiffs'' favour of a further six pies for a sum of Rs. 632. Later, again, on 18th September 1933, Ramnath Missir executed a third rehan in plaintiffs'' favour for a three pies interest for a sum of Rs. 400. Thus, under the three deeds one anna three pies came to be in mortgage with the plaintiffs.

On the very day of the execution of the third bond the plaintiffs gave back the property in lease to Ramnath Missir by a registered patta. The period of this lease was for the years 1341 to 1347 Fasli. Rent was fixed at Rs. 139-12-0 annually, and there was provision for interest on arrears.

The appellants brought the present suit for realization of the thica rent from the Jeth kisht 1341 Fasli to the Jeth kisht 1345.

The defendant produced from his custody and put into evidence the first mortgage bond and proved a receipt endorsed on its back and purporting to have been signed by one of the plaintiffs, acknowledging the receipt of a sum of Es, 559 in satisfaction of the claim for rent for the years 1341 to 1344 Fasli and further acknowledging the receipt of a sum of Rs. 632-6-0 in satisfaction of the mortgage and stating that the document was accordingly returned.

There was a hot controversy before the learned Munsif with regard to the genuineness of the plaintiffs'' signature upon the receipt. The learned Munsif, however, found that it had been established that the receipt was genuine. It will be observed that the sum of Rs. 559 covers four years'' rent exactly without any interest, and the defendant''s case with regard to that was that interest for those years had been remitted. The learned Munsif accepted this contention, and upon these findings he gave the plaintiffs a decree only for rent at a reduced rate of Rs. 86-10-9 for the year 1345 only. He held that the mortgage having come to an end with regard to six pies of the property and title having passed back to the defendant he was entitled to a proportionate abatement of the rent fixed in the lease.

On appeal by the plaintiffs, the findings and decision of the learned Munsif were upheld by the learned Subordinate Judge.

Mr. S.M. Mullick for the appellants accepts the findings that the receipt was genuine, and that the sums specified therein were actually paid and received by the plaintiffs. He contends, however, first, that the Courts below were not entitled to hold that the first rehan had been extinguished, because the receipt endorsed on the back of the document purporting to extinguish the mortgage was inadmissible in evidence for lack of registration, and this being so, oral evidence was also excluded to prove the extinguishment of the mortgage. Hence he argues that as the Courts could not hold that the mortgage had been extinguished they could not hold that the defendant was entitled to any abatement of rent for the year 1345, and there should consequently have been a decree for rent for the year 1345 at the full rate.

He supports this contention also upon another ground, namely, that the rent being fixed under the lease itself that is to say, under a registered document, it can only be reduced by another registered document. Lastly, upon the same argument, he contends that the plaintiffs should be given a decree for the interest due under the terms of the contract in regard to the rents for 1341 to 1344.

For his contention that the receipt was inadmissible in evidence Mr. Mullick relies upon the provisions of Section 17(2)(xi), Registration Act. u/s 17(1)(b) a document of this nature would ordinarily require registration but Section 17(2) provides that: "Nothing in Clauses (b) and (c) of Sub-section (1) applies to ''inter alia,'' (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 due under a mortgage when the receipt does not purport to extinguish the mortgage." He points out that the exemption covers only such receipts as do not purport to extinguish the mortgage. The receipt with which we are concerned in this case, he says, purports to extinguish the mortgage, because it provides for the return of the document. He is supported in this contention by the case of Jwala Prasad and Others Vs. Mohan Lal and Another, , where it was held that a receipt for money payable on a mortgage which did not expressly state that the payment was accepted in full satisfaction of the mortgage debt, but contained a promise to return the mortgage deed must be taken as purporting to extinguish the mortgage within the meaning of Section 17(2)(xi), Registration Act, 1908, and being unregistered was inadmissible in evidence.

Dr. Mitter for the respondent relying upon Gopalaswami Aiyar v. Kachi Kalyana Rangappa Kalaka Thola AIR 1925 Mad. 348 contends that the two parts of Clause (xi) of Section 17(2) must be read disjunctively, and consequently the proviso that the receipt must not purport to extinguish the mortgage applies only to receipts other than endorsements on the mortgage deed itself, and in the case of endorsement on the mortgage deed there is no such limitation to the exemption from registration. The ruling cited does undoubtedly support Dr. Mitter upon this point. In my view, however, it is a very doubtful authority. A different view was taken in Antaji v. Dattaji 19 Bom. 36 at p. 41, and there are several, other cases where a different view has been adopted by implication. It will be noticed that the wording of the clause in question clearly implies that the endorsement on the deed is also regarded as a receipt since the expression used is "any other receipt," and my own view is that the limitation of the exemption is intended to apply to all such receipts including those which might be endorsed on the mortgage deed itself.

In my view, Mr. Mullick''s contention that the endorsement was inadmissible in evidence to prove extinguishment of the mortgage must be accepted. But Mr. Mullick concedes that this ban would not prevent its being taken into evidence in proof of the payment of the money. As I have said, he accepts the findings mainly based on this receipt that the money specified therein had been paid. This being so, it appears to me immaterial whether direct evidence could or could not have been given to prove the extinguishment of the mortgage. Mr. Mullick''s argument really rests on this proposition, that the mortgage having been created by a registered agreement, any agreement putting an end to it must also be registered. An Unregistered agreement to extinguish the mortgage is inadmissible in evidence, and that being so oral evidence of any such agreement will also be excluded.

The fallacy in the argument, in my view becomes at once apparent. A mortgage is not extinguished only by a subsequent agreement between the parties. It is extinguished ordinarily by operation of law after satisfaction. Thus, a mortgage can come to an end without any subsequent registered agreement, and in fact ordinarily does. This being so, I see no reason why evidence, either oral or in the nature of unregistered receipts, should not be led to prove actual payment of the mortgage dues. Once the payment of the full dues under the mortgage has been established, then the extinguishment follows as an inference of law. It is not a case of any subsequent agreement which needs registration. No doubt, the mortgage could be extinguished also by a subsequent registered agreement, for example, where part payment was accepted in full satisfaction, but this is not such a case. The evidence led and the findings thereupon dearly establish that the full amount of the mortgage money was paid. Not only that but the mortgage bond was produced from the custody of the mortgagor, and this being the case, there followed a presumption u/s 114, Evidence Act (vide Illustration I), that the mortgage had been discharged. I cannot see that there was any evidence of any sort in the present case to rebut that presumption.

In the circumstances the findings of the Courts below regarding the satisfaction and discharge of the mortgage are, in my opinion, findings legally arrived at upon the evidence, and I can see no reason why they should not stand.

This being so, the Courts below were, in my opinion, right in giving proportionate reduction of the rental for the year 1345. What was asked for was really not an alteration of the rate of rent fixed under the agreement by substitution of a second agreement, but for an abatement on the ground that the lessee was not in possession of that portion of the property in the year in question. Of course, physically the defendant did remain in possession, but his possession for that year was not possession as a lessee under the lease but possession as full owner after redemption of the mortgage. In my view, the learned Munsif was quite entitled to allow an abatement of the rent.

There remains the point with regard to interest for the years 1341 to 1344. The defendant''s case here, as I have said, was that the interest had been remitted. The finding is that it was remitted. That is a pure finding of fact. It is not a question of any alteration of the rate of rent, but merely of a remission of a particular sum due. With regard to this remission there was not only the receipt, but there was independent oral evidence, evidence which has been accepted, and I cannot see any reason at all for holding that such evidence to prove the fact of remission was inadmissible.

In the result therefore this appeal fails on all points, and is accordingly dismissed with costs.