Sankaranarayana Iyer Venkitachalam Iyer vs Iype Mathen and Others

Plaintiff is the Appellant. The suit is for recovery of amounts due under a hypothecation bond. Ex. E dated 12-1-1098, and a debt bond, Ex. R dated 25-11-1109. The hypothecation bond was executed in favour of the Plaintiff by Mathen Iype, the father of Defendant 1 and 2 and the grand-father of Defendants 3 for 4500 paras of paddy and Rs. 1200/-. The paddy portion of the debt was to carry 7 1/2 per cent, interest and the money portion 9 per cent. There was also a term of three years.

On 22-11-1102 Mathen Iype executed a debt bond in favour of the Plaintiff and after his death it was renewed by Defendant 1 and the deceased father of Defendant 3 on 25-11-1109 under Ex. R. The renewed bond was for 5114 paras 4 1/2 edaucalies of passy, and interest was provided at the rate of 1 3/4 paras per 10 paras of paddy.

It was alleged in the plaint that there was a settlement of accounts between the parties as regards the amounts payable under the two transactions till 30-9-1112, that 6525 paras of paddy was found due under Ex. E and 4822 paras under Ex. R and that out of the total amount of 11347 paras of paddy thus found due the Plaintiff agreed to give up a portion in case Defendants 1 to 3 would execute a sale deed in his favour for the balance amount.

It was also alleged that instead of executing a sale deed, Defendants 1 and 2 executed a mortgage deed on 8-1-1113 of their own accord without the knowledge and consent of the Plaintiff, that the Plaintiff did not accept the same and that it did not come into effect. Defendants 4 and 5 were impleaded as subsequent encumbrancers of the property hypothecated under Ex. E. Defendant 6 who is the mother of Defendant 3 was subsequently impleaded in the case.

Plaintiff claimed in the suit 4500 pares of paddy principal amount due under Ex. E, and interest on that at 7 1/2 per cent per annum from Medom 1106 to 1-2-1116, and thereafter at 6 per cent per annum. The total amount claimed under the hypothecation bond was 7920 paras of paddy which according to the standard measure would come to 6336 pares. 4822 paras of paddy was claimed as the principal amount due under the debt bond, Ex. R, and interest was claimed on this amount at 9 per cent per annum till 1-2-1116 and thereafter at 6 per cent. 360 paras of paddy was given credit to as paddy paid towards interest under the debt bond. The balance interest claimed was 1373 pares of paddy.

Thus, 6195 paras of paddy was claimed as amount due under Ex. R. According to the standard measure, it will come to 4956 paras. Price of paddy was calculated at the rate of 4 1/4 fanams per pare. The total amount of money claimed under the hypothecation bond and the debt bond was 47928 fanams. This amount was claimed as a charge on the plaint property.

Defendants 1, 3 and 4 filed written statements in the case. Defendant 1 admitted the execution of the hypothecation bond and the debt bond and also the settlement of accounts, which, according to him, was towards the end of Karkadakam 1112. He contended as follows: At the time of the settlement of accounts 5175 paras of paddy was found due under the hypothecation bond and 6172 paras under the debt bond.

Out of the total amount of 11347 paces of paddy a portion was remitted by the Plaintiff in view of the tact that the transaction was an old one and that Defendants 1 to 3 had paid large amount by way of interest; and Plaintiff agreed to be satisfied with 8262 paras of paddy. This was converted into Rs. 2754/- and it was agreed that future interest should be paid on this amount at the rate of 80 paras (Kalloorkadan) of paddy per Rs. 1000/-.

A letter embodying the above agreement was given to Defendant 1 by the Plaintiff''s son Mr. Sankaranarayana Iyer at the instance of the Plaintiff. This letter was produced along with the written statement. The first Defendant denied the allegation in the plaint that the remission of a portion of the amount due under Exs. E and R was made on condition that the Defendants executed a sale deed in favour of the Plaintiff for the balance amount.

According to Defendant 1, the agreement between the parties was that the Defendants should execute a mortgage deed in favour of the Plaintiff in respect of the southern one-half of the plaint schedule property for the above sum of Rs. 2754/- and a further sum of Rs. 1000/- which had to be paid in Defendants 4 and 5 who had charges on the property and also for Rs. 26/- which the Defendants a to pay as their portion of the expenses for the execution and registration of the document.

Accordingly, a draft mortgage deed for Rs. 3780/- was prepared by the Plaintiff''s son and the Defendants executed the mortgage deed, Ex. M, on the basis of that draft got it registered and handed it over to the Plaintiff. They also executed a lease deed, Ex. IX agreeing to pay pattom at the rate of 350 pares of paddy per year. But, since the Plaintiff did not pay Defendants 4 end 5 Rs. 1000/- recited in the mortgage deed interest was paid for the balance amount of Rs. 2780/- at the rate agreed upon, viz., 222 paras 4 edangalies of paddy a year. Interest at that rate was paid for the years 1113, 1114 and 1115.

Plaintiff refused to accept the payment made for the year 1116. It was also contended that the liability under the hypothecation bond and the debt bond been extinguished by the execution of the mortgage deed and that the suit instituted on the basis of the hypothecation bond and debt bond was not maintainable. It was further contended that the suit was barred except to the extent of Rs. 2754/- acknowledged in the mortgage deed, Ex. M.

The guardian of the minor Defendant 3 contended that the debt bond, Ex. R, was not executed by the deceased father of Defendant 3, that the debt bond was not binding on Defendant 3 and that time suit was barred by limitation so far as Defendant 3 was concerned. Defendant 4 contended that the Plaintiff was not entitled to a charge on the plaint property for the amount covered by the debt bond, Ex. R. The Plaintiff flied a replication in which he traversed the contentions of Defendants 1, 3 and 4.

Although the genuineness of the letter produced by Defendant 1 was admitted by the Plaintiff it was contended that it was only a note prepared for ascertaining the amount for which the Defendants were to execute a sale deed in favour of the Plaintiff and that there was no agreement between the parties as contended by Defendant 1. It was further contended that the paddy paid by the Defendants after the date of Ex. IV was paid on other accounts and not as interest on the amount payable under the plaint transactions.

It was also affirmed that the agreement between the parties was that the Defendants should execute a sale deed and not a mortgage deed in favour of the Plaintiff, that the mortgage deed, Ex. M, was executed without the consent of the Plaintiff and that it was repudiated by him when the sum of Rs. 1000/- recited in it was attached in O.S. No. 760 of 1112 of the Alleppey Munsiff''s Court.

The trial Court found that there was a settlement of accounts between the parties on 30-12-1112 with regard to the amounts payable under the hypothecation bond and the debt bond and that the Plaintiff had agreed to be satisfied with Rs. 2754/- as contended by Defendant 1. It was also held that the letter, Ex. IV, was written by the Plaintiff''s son for and on behalf of the Plaintiff with the consent of the latter.

The learned Judge accepted the Defendants case that the understanding between the parties was that the Defendants should execute a mortgage in favour of the Plaintiff for the amount agreed upon but that the mortgage deed (Ex. M) was not accepted by the Plaintiff. It was, therefore, held that the Plaintiff was entitled to recover from the Defendants Rs. 2754/-mentioned in Ex. IV with interest at the rate specified therein, viz., 222 paras 4 eds. of paddy per year.

It was also found that the amounts paid by the Defendants were pail towards interest on the above sum of Rs. 2754/-. Plaintiff was accordingly given a decree for Rs. 2754/- with interest at the rate of 222 paras 4 eds. of paddy per year from 1116 onwards charged on plaint schedule property. Paddy was vadued at the nirak rate on the date of plaint. Plaintiff was also awarded proportionate costs.

The main grounds urged in the appeal are that Ex. IV Is not admissible in evidence, that the remission by the Plaintiff of a portion of the amount due under Exs. E and R was conditional on the Defendants executing a sale deed for the balance amount and that since the condition was not fulfilled the Plaintiff is entitled to get the full amount payable under Exs. E and R. Defendant 1 has filed a memorandum of objection objecting to the award of interest at more than 4 per cent per annum from the date of the Travancore Debt Relief Act. Objection was also taken to the pirak rate at which paddy was valued.

The questions that arise for decision in the appeal are the following: (1) Whether Ex. IV is admissible in evidence. (2) Whether the remission of a portion of the amount due under Exs. E and R was conditional on the Defendants executing a deed of conveyance in favour of the Plaintiff or whether the remission was unconditional. (3) II the remission was conditional, what was the condition? Was it that the Defendants should execute a sale deed or only a mortgage and lease back? (4) Was the mortgage deed, Ex. M, accepted by the Plaintiff? (5) What amount is the Plaintiff entitled to and what is the rate of interest that should he awarded?

So far as the first question is concerned, it was argued for the Appellant that since the amount under the hypothecation bond (Ex. E) is charged on immovable property Ex. IV which purports to limit that charge is a document coming within the ambit of Section 10(a). Travancore Registration Act, 2 of 1087; and is, therefore, a document compulsorily registrable and that u/s 42 of the Act it cannot he admitted in evidence for proving any transaction affecting interest in immovable property.

But, out of the total amount of 11347 paras of paddy was found due to the Plaintiff till 30-9-1112 under the hypothecation bond and the debt bond only 5175 pares was the amount that was due under the hypothecation bond, and the balance, viz., 6172 parar, was amount payable under the debt bond. What was remitted by the Plaintiff under Ex. IV was 3085 pares of paddy. This need not necessarily be from the amount payable under the hypothecation bond.

It is not contended for the Appellant that if Ex. IV has the effect of reducing only the amount payable under the debt bond it is a document coming within the ambit of Section 10, Travancore Registration Act. The full amount payable under the hypothecation bond is still payable by the Defendants notwithstanding the remission evidenced by Ex. IV.

We are, therefore, unable to accept the contention of the Appellant that Ex. IV is a document compulsorily registrable. In this view it is not necessary to go into the further question whether a document merely evidencing partial discharge of a debt charged on immovable property is a document compulsorily registrable u/s 10, Travancore Registration Act.

The second question is the most important question for consideration in this case. According to the Plaintiff, the remission of a portion of the amount payable under Exs. E and R was made a condition that the Defendants executed a sale deed in favour of the Plaintiff for the balance amount, while according to the Defendants the remission was unconditional and the agreement to execute a deed of conveyance in fovour of the Plaintiff was a separate and independent agreement.

Their case is that there was settlement of accounts between the parties on 30-12-1112, that the amount payable by me the Defendants was fixed at 8262 paras of paddy, that it was converted into Rs. 2754/- and that there was a further agreement that the Defendants should execute a mortgage deed in favour of the Plaintiff for that amount and pay interest at the rate of 222 paras 4 eds. Paddy per year. The question for decision is which of these versions is true.

(9-11) It has to be stated at the outset that the Plaintiff has not got a consistent case so far as this question is concerned. What is stated in para 5 of the plaint is that on settlement of accounts the amount payable to the Plaintiff under the hypothecation bond and the debt bond was found to be 11347 paras of paddy and that the Plaintiff agreed to give up a portion of the amount in case the Defendants would execute a sale deed in his favour for the balance amount without any delay. No mention was made of Ex. IV and It was also not stated what amount the Plaintiff had agreed to give up in case the Defendants would execute a sale deed in his favour.

Defendant 1 contended in his written statement that at the time of the settlement of accounts the Plaintiff agreed to be satisfied with 8262 paras of paddy, that it was converted into Rs. 2754/-, that future interest for that amount was fixed at 80 paras of paddy a year per Rs. 1000/- and that at the direction of the Plaintiff his son, Mr. Sankaranrayana Iyer, gave a latter to Defendant 1 containing the anove terms of agreement. Exhibit IV was also produced along with the written statement. The written statement was filed on 9-7-1117.

The Plaintiff filed a replication on 8-3-1118. In that replication the Plaintiff only admitted that the letter produced by Defendant 1 was genuine. It was stated that it was only a note showing the amount for which the Defendants were to execute a sale deed in favour of the Plaintiff, that these was no agreement by the Plaintiff to remit any amount and that ii it could be interpreted as an agreement the agreement was invalid and unenforcible and not binding on the Plaintiff. (After reviewing the evidence, on record and construing the documents, the conclusion was reached:) The wording of Ex. IV does not show that the remission of a portion of the amount was made on condition that the Defendants executed a sale deed in favour of the Plaintiff. The document shows that the accounts between the parties were settled, that the amount payable to the Plaintiff was fixed at 8262 paras of paddy, that it was agreed to be converted into Rs. 2780/-, that interest payable on that amount was fixed at 222 pares 4 eds. of paddy and that the Plaintiff agreed to receive the same.

It was further stated that the Plaintiff would take a deed of conveyance for the amount, interest being calculated at the above rate. There is nothing in the document to show that the remission would be made only if the Defendants executed a deed of conveyance. We are, therefore, unable to accept the contention of the Appellant that the remission of a portion of the amount payable under Exs. E and R was made by the Plaintiff on condition that the defendants executed a deed of conveyance in his favour.

It is also seen that the Plaintiff accepted interest paid by the Defendants at the rate fixed in Ex. IV for the years 1113, 1114 and 1115. Exhibit II account of the Plaintiff shows that on 12-9-1114 Defendant 1 paid 450 paras of paddy. According to the Respondents it consist of two years'' interest at the rate of 222 paras 4 eds. of paddy per year and alakkada.

Exhibit II also shows that on 14-9-1115 Defendant 1 paid 222 paras 4 eds. of paddy besides alakkada of 4 paras 1 ed. It is clear from this that the payment was made as per the agreement contained in Ex. IV and that the Plaintiff accepted payment as such. It was contended for the Plaintiff that these payments were made on other accounts. But, in the face of the entries in Ex. II, it is difficult to believe that case.

The fact that the Plaintiff accepted payment of interest in accordance with the terms of Ex. IV for three years even though no sale deed was executed by the Defendants in his favour goes a long way to show that the agreement to remit a portion of the amount due under Exs. E and R was not conditional on the Defendants executing a sale deed in his favour. We hold that the remission was unconditional and that the Plaintiff had agreed to receive Rs. 2780/- in full settlement of the claims under Exs. E and R.

According to the Defendants, Rs. 26/- was included in Ex. IV as their portion of the expenses for executing the mortgage deed in favour of the Plaintiff. The Court below accepted this version. We also find no reason to disbelieve Defendant 1 on this point. This case was put forward in his written statement and it was not specifically denied by the Plaintiff in the replication. The price of 8262 paras of paddy mentioned in Ex. IV at the rate of three paras of paddy per rupee will come to only Rs. 2754/- and not Rs. 2780/-. We, therefore, hold that the amount that was really payable to the Plaintiff by the Defendants as per the settlement of accounts made on 30-12-1112 was Rs. 2754/-.

The next question for consideration is whether the understanding between the parties at the time of the settlement of accounts was that the Defendants should execute a sale deed in favour of the Plaintiff or only a mortgage deed. (It was observed that the words used in Ex. IV,...prima facie indicated that the understanding was that a sale deed should be executed.)

But, in the previous portion it is stated that 222 paras 4 eds. of paddy was to be paid as interest in the month of Medom.

These words go to support the defence case that the agreement wits to execute a mortgage deed and lease back providing for payment of interest at the rate of 222 paras 4 eds. of paddy in Medom every year. It is, however, not necessary to decide this question in this case.

It cannot be that it is proved in this case by convincing evidence that the mortgage, Ex. M, executed by the Defendants was accepted by the Plaintiffs and that it was executed with his consent. The document was produced for registration by the executants themselves and got back by them. The consideration for the document is Rs. 3780/- consisting of Rs. 2780/- mentioned in Ex. IV and Rs. 1000/- reserved with the mortgagee to be paid to the mortgagors subsequently.

There is no independent evidence in the case to show that the Plaintiff had agreed to pay this additional amount of Rs. 1000/-. This amount was attached in execution of a decree against the Defendants in O.S. No. 760 of 11l2 of the Alleppey Munsiff''s Court and when notice of attachment was given to the garnishee (Plaintiff) he filed Ex. O petition in Court on 30-4-1114 contending that the mortgage. Ex. M, was executed by the Defendants without his knowledge and consent and that he had not agreed to pay the amount recited in the document. The Defendants did not file any statement in Court denying the contention of the Plaintiff.

Exhibit IX is the lease deed executed by the Defendants in favour of the Plaintiff on the date of the mortgage. The pattom provided in the lease deed is 350 pares of paddy per year. It is, however, seen that the Defendants were paying only 222 paras 4 eds. of paddy a year which is the interest fixed in Ex. IV. That also goes to show that Ex. M was not acted upon by the parties.

We, therefore, confirm the finding of the Court below that Ex. M was not executed with the consent of the Plaintiff and that it was not accepted by him. The Plaintiff is, therefore, entitled to claim the amount provided in Ex. IV, viz., Rs. 2780/- minus Rs. 26/- which was included as the Defendants'' share of the expenses for the execution and registration of the deed of conveyance.

The interest provided for in Ex. IV is 222 paras 4 eds. of paddy. Exhibit II shows that interest at this rate was paid for the years 1113, 1114 and 1115. The Plaintiff is, therefore, entitled to get interest only from the year 1116 onwards. The Court below awarded interest from that year at the rate of 222 peras 4 eds. of paddy per year. In the memorandum of objection filed by Defendant 1 he contends that he is liable to pay only 4 per cent, interest from the date of the commencement of the Debt Relief Act, i.e., 1-2-1116. It is not disputed that the debt as one which comes within the purview of the Act. Section 12 of the Act provides that.

no future interest exceeding simple interest calculated at 4 per cent. Per annum in the case of money debt and 6 per annum in the case of paddy debt shall be chargeable from the date of the commencement of the Act on any debt to which the Act applies.

The question for consideration is whether the debt in question is a money debt or a paddy debt. It will be seen from Ex. IV that the amount of debt payable to the Plaintiff under the hypothecation bond and the debt bond was fixed at 8262 paras of paddy. Although its value was fixed at Rs. 2780/- it cannot be said that the debt was not a paddy debt. We, therefore, hold that the interests chargeable is at the rate of 6 per cent, per annum. Plaintiff is allowed to realise interest at this rate on Rs. 2754/- From 1-2-1116.

It has to be noted that in the plaint also interest was calculated at the rate of 6 per cent. per annum from 1-2-1116. The decree of the Court below is modified to the above extent and confirmed ii other respects. The appeal is dismissed with costs. The memorandum of objection is allowed to time extent mentioned above.