RAGHUNATH & ORS. versus KEDAR NATH

RAGHUNA'rH & ORS.

KEDAR NAIB February 3, 1969

[1. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.]

Tran!Jfer of Property Act, 1882, ss. 4 and 54-Jndian Registration Act, 1908, " 49 as amended by Transfer of Property (Amendment) Supple-mentary Act. 1929, s. l~ection 4 of T .P. Act whether makes s. 49 of Registration Act applicable to documents compulsorily registrable under s. 54 of T.P. Act-Unregistered sale-deed whether admissible in evidence.

Construction of documents-Mortgage or sale.

Practice-High Court in appeal whether can give further relief than given to plaintiff by trial court when plaintiff did nor file appeal against decree of trial court.

took loan of Rs. 1700/ - from M, father of the defendants. On 27th July 1922, along with his· grandmother executed possessory mortgage deed (Ex.4) in respect of house for the amount of the afore-D said loan in favour of M. On 23rd February 1953, D's heir sold the said house to the plaintiffs who filed suit for redemption of the house and for accounts. The defendants who were sons of M resisted the suit on the ground that Ex .. 4 was not deed of mortgage though apparently so. According to them when read with Ex. 26 which was executed in October 1922 it was an outright sale. The !rial court decreed the plaintiff's suit for redemption on payment of an amount fixed by it. The first Appellate Court allowed the defendants' appeal. The High Court when finally dis-E posing of the second appeal set aside the judgment elf the lower appellate court and restored the judgment of the trial court. The High Court fur-ther remanded the case to the lower appellate court with the direction that "the defendants be asked to render accounts before they claim any pay· meat from the plaintiff at the time of the redemption of the mortgage". In appeals before this Court the contentions on behal'f of the defendants-appellanls were : ( i) That Ex. 4 was really sale deed and not mortgage deed and it should be read with Ex. 26; (ii) Thats. 4 of the Transfer of Property Act did not make s. 49 of the Registration Act applicable to documents compulsorily registrable by the provisions of s. 54 paragraph 2 of the Transfer of Property Act, and therefore Ex. 26 though unregistered was not inadmissible in evidence; (iii) That in any case since the respon· dents (olaintiffs) had not filed any appeal against the decree of the trial court, the High Court should not have granted them further relief as it did by giving direction that the defendants should be asked to render accOU11ts before they claimed payment from the plaintiff at the time elf the redemption of the mortgage.

HELD : (i) The terms of Ex. 4 clearly showed that it was mortgage deed and not sale deed.

(ii) Ex. 4 could not be read with Ex. 26 because the latter was re-quired to be registered under s. 54 of the Transfer of Property Act. In the absenee of such registration this document could not be received in evidence of any transaction affecting the property in view elf s. 29 of the Registration Act. [500 B--501 EJ

The contention that s. 4 of the Transfer of Property Act did not make s. 49 of the Registration Act applicable to transactions under s. 54 para-

graph 2 of the Transfer of Property Act could not be accepted. Any doubt in this respect was removed by s. 10 of the Transfer of Property 1 Amendment) Supplementary Act, 1929 which introduced the words '"by ""Y provision of the Transfer of Property Act, 1882" in s. 49 of the Re-gistration Act. This amendment made it clear that the documents in the supplemental list i.e. the documents of which registration is necessary under tl'c Transfer of Property Act but not under the Registration Act fall within the scope of section 49 of the Registration Act, and if. not re-gistered are not admissible in evidence of any transaction aifectlng any immovable property comprised therein and do not affect any such immov· able property. (503 F-504 BJSohan Lal & Ors. v . . "v/o/wn Lal & Ors., I.LR. 50 All. 986 and Rama Sahu v. Gowro Ratho, I.LR. [1921] 44 Mad. 55. referred to.

(iii) The appellants were right in contending that when the plaintifi had not filed an appeal against the decree of the trial court the High Court was not legally justified in giving further relief to the plaintiff than that granted by the trial court. Accordingly the portion of the decree of the High Court remanding the case to the IO\ver appellate court with direction that the dofendants should be asked to tender accounts, was liable to be set "'ide. [504 D-E]

CIVIL APPELLATE JURISDICTION : and 458 of 1966.

Civil Appeals Nos. 457

Appeals by special leave from the judgment aind order date\I April 27, 1964 of the Allahabad High Court in Second Appeals Nos. 4940 and 3660 of 1961.

S. P. Si11ha and Shaukat Hussain, for the appellants (in both the appeals).

J. P Goyal and G. Nabi Untoo, for the respondent (in both the appeals).

The Judgment of the Court was delivered by

Ramaswami, J. In the suit which is the subject matter of these appeals the plaintiff alleged that one Dwarka Prasad took loan of Rs. 1700 from Madho Ram, father of the defendants, and that on 27th July, 1922, Dwarka Prasad along with one Mst. Kunta. his maternal grand mother, executed possessory mortgage deed of the disputed house for Rs. 1700 in favour of Madho Ram. The tenns of the mortgage deed were that the mortgagor was to pay interest of Rs. 12, 12/- per month out of which the rent amounting to Rs. 6/-which was the agreed usufruct of the house in suit was to be adjusted and the mortgagor was to pay Rs. 6/12/- per month in cash towards the balance of the interest. The parties agreed that the mortgage would be re-deemable within twenty years after paying the principal amount and that portion of interest which was not discharged by the usu-fruct and other amounts. When Dwarka Prasad wiis unable to pay the amount of Rs. 6/12/- per month, he delivered possession of the house to Madho Ram who let out the house on monthly

rent of Rs. 25. The mortgagors Dwarka Prasad and Mst. Kunta died leaving Mst. Radha Bai as Dwarka Prasad's heir. Radha Bai sold the house in dispute to the plaintiff on 2nd February, 1953 and executed sale deed. The plaintiff, therefore, became entitled to redeem the mortgage and asked the defendants to ren-der accounts. The defendants contested the suit on the ground that Madho Ram was not the mortgagor nor were the defendants mortgagees. It was alleged that in the locality where the house was situated, there was custom of paying Haqe-chaharum and to avoid that payment, the original deed dated 27th July, 1922 was drafted and executed in the form of mortgage though it was actually an out-right sale. According to the defendants, the house was actually sold to Madho Ram and was not mortgaged. The defendants also pleaded that if the deed dated 27th July, 1922 was held to be mortgage, the mortgagees were entitled to get the pay-ment of Rs. 6442/8/- as interest, Rs. 2315 as costs of repairs etc. The trial court held that the deed dated 27th July, 1922 was mortgage deed, that Dwarka Prasad did not sell the house to Madho Ram and that the plaintiff was entitled to redeem the mortgage on payment of Rs. 1709/14/.. The trial court.accord-ingly decreed the plaintiff's suit for redemption on payment of Rs. 1709/14/-. Against the judgment of the trial court the defendants preferred an appeal before the District Judge, Vara-nasi, who allowed the appeal and dismissed the plaintiff's suit. The plaintiff took the matter in second appeal to the High Court which framed an issue and remanded the case back to the lower appellate court for fresh decision. The issue framed by the High Court was "Have the defendants become the owners of the property in dispute by adverse possession ?" The High Court also directed the lower appellate court to decide the question oi admissi-bility of Exts. A-25 and A-26. After remand the lower appellate court held that the deed dated 27th July, 1922 was mortgage deed and not sale-deed, and, therefore, the plaintiff was entitled to re-deem the mortgage. The lower appellate court further held that the defendants had failed to prove that they had acquired title by adverse possession. The lower appellate court made the follow-ing order:-G 'The appeal is allowed with half costs in this way that the suit is decreed for the redemption of the mort-gage in question if the. plaintiff pays within six months Rs. 1700 as principal, Rs. 9.87 N.P. Prajawat paid before this suit and any Prajawat paid by the defen-dants during the pendency of this suit till the plaintiff deposits the entire sum due under this decree and the interest at the rate of Rs. 6/12/- per month from 27-7-19?.2 till the plaintiff deposits the entire sum due

under this decree. The costs of the trial court are made easy. Let the preliminary decree under Order 34, R. 7, C.P.C. be modified accordingly".

Against the judgment and decree of the lower appellate court both the plaintiff and the defendants filed appeals before the High Court. The plaintiff prayed that the decree of the lower appellate court should be set aside and the decree of the trial court should be restored. The defendants, on the other hand, prayed that the decree of the lower courts should be set aside and the plaintiff's suit should be dismissed with costs. By its judgment dated 27th April, 1964 the High Court dismissed the secoind appeal pre-ferred by the defendants but allowed the plaintiff's appeal and set aside the judgment of the lower appellate court and restored the judgment of the trial court. The High Court further remanded the case to the lower appellate court with the direction that "the defendants be asked to render accounts before they claim any payment from the plaintiff at the time of redempti® of the mort-gage". The present appeals are brought by special leave against the judgment of the Allahabad High Court dated 27th April, 1964 in second Appeals Nos. 4940 and 3660 of 196!.In support of these appeals it was contended by Mr. Sinha that the deed Ex. 4 dated 27th July, 1922 was sale deed and not mortgage deed. It was pointed out that there was subse-quent deed of sale dated 8th Ock!ber, 1922 Ex. A-26 which is named 'Titimma Bainama'. The contention was that the docu-ment Ex. 4 dated 27th July, 1922 rr.ust be construed along with Ex. A.26 which forms part of the same transactio!l and so cons-trued the transaction was not usufructary mortgage but was an outright sale. We are unable to accept the argument put forward on behalf of the appellant. Ex. A.26 dated 8th October, 1922 is not registered document, and is hence not admissible in evidence to prove the nature of the transaction covered by the registered mortgage deed Ex. 4 dated 27th July, 1922. If Ex. 4 is taken by itself, there is no doubt that the transaction is one of mortgage. The document Ex. 4 recites that in consideration of moaey advanced the executants "mortgage the said house 'Bhog Bh!\Q.dak' bearing No. 64/71 situate Mohalla Gola Dina Nath.'' Clause 2 provides period of twenty years for redemption of the mortgage. Clause 6 of the document stipulates that the cost of refJairs will be borne by the mortgagors. Clause 1 states :

"That the said sum of Rupees Seventeen hundred half of which is Rupees Eight hundred and fifty will carry interest at the rate of twelve annas per cent monthly. The sum of Rupees six wiH be deducted to-wards rent monthly from the interest which will accrue. The possession of the house has been delivered to the

said mortgage Mahajan (money lender). The mort-gagors will pay the balance of Rupees six annas twelve month by month to the said mortgagee after deducting the rent of Rupees six after giving the possession of the said house and shop".

Clause 4 provides :

"That we will go on paying the said Mahajan the sum of Rupees six twelve annas the balance of the inte-rest monthly. If the whole or part of the interest re-mains unpaid we will pay at the time of redemption. ll this amount of interest is not paid the said house shall not be redeemed".

The reading of these terms clearly shows that Ex. 4 was mortgage deed and not sale deed. It was contended on behalf of the appel-lants that in order to avoid the payment of Haqe-ehaharum, the original deed dated 27th July, 1922 was drafted and executed in the form of mortgage but it was actually meant to be an out-D right sale. Tn support of this argument reference was made to Ex. A.26 dated 8th October, 1922. As we have already said Ex. A.26 was required to be registered under section 54 of the Trans-fer of Property Act. In the absence of such registration this docu-ment cannot be received in evideince of any transaction affecting the property in view of s. 49 of the Registration Act. It was, i, however, urged on behalf of the appellants that the effect of section 4 of the Transfer of Property Act was not to make section 49 of the Registration Act applicable to documents which are compulsorily registrable by the provisions of s. 54, paragraph 2 of the Transfer of Property Act. In support of this contention reliance was placed on the decision of the full bench of the Allahabad High Court in Sohan Lal & Ors. v. Mohan Lal &: Ors.([1 ]}

Section 4 of the Transfer of Property Act states :

"The chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Regis-tratio,n Act, 1872.

And sections 54, paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the Indian Regis-tration Act, 1908".

Section 54 of the Transfer of Property Act reads :

" "Sale" is transfer of ownership in exchange for price paid or promised or part-paid and part-pro-mised.

(I) I.LR. 50 All. 986.

Such transfer, iC1 the case of tangible immoveaoJe property of the value of one hundred rupees and up-wards, or in the case of reversion or other intangible thing, can be made only by registered instrument.

In the case of tangible immoveable property, of value less than Qlle hundred rupees, such transfer may be made either by registered instrument or by delivery of the property".

Section 1 7 of the Registration Act states :

"1 7. (1 ) The following documents shall be regis-tered if the property to which they relate is situate in 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 lindian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely :

(a) instrument of gift of immoveable property;

(b) other non-testamentary instruments which pur-port or operate to create, declare, assign, limit or ex-tiinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property;

(c) non-testamentary iristruments which acknow-ledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limita-tion or extinction of any such right, title or interest; and

( d) leases of immoveable property from year to year, or for any term exceeding one year, or reserving yearly rent;

( e) non-testamentary instruments transferring or assigning any decree or order of Court or any award when such decree or order or award purports or ope-. rates to create, declare, assign, limit or extinguish whether in present or in future, any right, title or inte-rest, wheiher vested or contingent of the value of one hundred rupees and upwards to or in immoveable property".

Section 49 of the Registration Act prior to its. amendment in 1929 read:

"No document required by section 17 to be register-ed shall-

(a) affect any immoveable property comprised therein, or

(b) confer any power to adopt, or

( c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered".

By section 10 of the Transfer of Property (Amendment) Sup-plementary Act, 1929, section 49 was amended as follows:-

"No document required by section 17 or by any pro-vision of the Transfer of Property Act, 1882 to be regis-tered shall-

( a) affect any immoveable property comprised there~, or

(b) confer any power to adopt, 01

( c) be received as evidence of any transaction affecting such property or conferring such power unless it has been registered. Provided that an unregistered document affecting immoveable property a'1d required by this Act or the Transfer of Property Act, 1882, to be registered may be received. as evidence of contract in suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of contract for the purposes of section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be affected by re-gistered instrument". The inclusion of tbe words "by any provision of the 'l;'ransfer of Property Act, 1882" by the Amending Act, 1929 settled the doubt entertained as to whether the documents of which the re-gistration was compulsory under the Transfer of Property Act, but not under section 17 of the Registration Act were affected by sec-tion 49 of the Registration Act. Section 4 o.f the Transfer of Pro-perty Act enacts that "sections 54, paragraphs 2 and 3, 59, 107 and 123 shall be read as supplemental to the India,n Registration Act, 1908". It was previously supposed that the effect of this section was merely to add to the list of documents of which the registration was compulsory and not to include them in section t 7 so as to bring them within the scope of section 49. This was the view taken by the Full Bench of the Allahabad High Court in Sohan Lal' s case('). The same view was expressed in Madras Case Rama Sahu v. Gowro Ratho(') and by MacLeod C.J. in Bombay case Dawal v. Dharma('). We are however absolved

(I) l.L.R. SO All. 986.

i2) I.L.R. [1921] 44 Mad. 55.

(3) l.L.R. [1918] 41Born.550.

in the present case from examining the correctness of these dec1-,ions. For these decisions have been superseded by subsequent legislation i.e. by the enactment of Act 21 of 1922 which by in-serting in section 49 of the Registration Act the words "or by any provision of the Transfer of Property Act, 1882" has.made it clear that the documents in the supplemental list i.e. the docu-ments of which registration is llCCCSSary under the Transfer of Property Act but not under the Registration Act fall within the scope of section 49 of the Registration Act and if not registered are not admissible as evidence of any transaction affecting a.ny immoveable property comprised therein, and do not affect any such immovable property. We are accordingly of the opinion that Ex. A.26 being umegistered is not -admissible in evidence. In our opinion, Mr. Sinha is unable to make good his argument on this aspect of the case.Mr. Sinha contended that in any event the High Court should not have remainded the case to the lower appellate court with direction that the defendants should be asked to render accounts before they claim any payment from the plaintiff at the time of redemptiqn of the mortgage. It was pointed out that the plaintiff did not file an appeal against the decree of the trial court and in the absence of such ·an appeal the High Court was not legally justified in giving further relief to the plaintiff than that granted by the trial court. In our opinion, there is justification for this argument. We accordi,ngly set aside that portion of the decree of the High Court remanding the case to the lower appellate court with direction that the defendants should be asked to render accounts. Otherwise we Sflirm the decree of the High Court allowing the plaintiffs appeal with costs and setting aside the judgment and decree of the lower appellate court and restoring judgmanit and decree of the trial court dated 31st October, 1956.

Subject to this modification we dismiss these appeals. There will be no order as to costs in this Court.

Appeals dismissed.