RAGAIYA BAGAVATHAR Vs. KESAVA BAGAVATHAR

JUDGEMENT

(1.) THOUGH the value involved in this second appeal is a very small one, yet it raises an interesting question of law. Defendants 1 and 2 in O. S. 441 of 1965 on the file of the Court of the District Munsif, Arni, who failed before the trial Court as well as the first appellate Court are the appellants before this Court. The admitted facts are as follows:

(2.) THE first appellant herein was having some dealings in javuli with the respondent herein. In the course of such dealings, a sum of Rs. 700 was due by the first appellant to the respondent herein. In view of the fact that the amount was standing unsecured, the respondent wanted to have the same secured, under a mortgage, but the subject-matter of the mortgage belonged to both the appellants. Consequently, on 1-11-1955, the parties entered into an arrangement consisting of execution of a mortgage deed by the appellants herein in favour of the respondent herein, as evidenced by Ex. A-1 and execution of a counter-part varthamanam letter by the respondent herein in favour of the appellants, herein, as evidenced by Ex. B-1. On that date, the respondent, in addition to the sum of rs. 700 already due by the first appellant to him, paid a sum of Rs. 300 to both the appellants and got the mortgage deed Ex. A-1 executed by the appellants for a sum of Rs. 1000 payable with interest at 6 per cent per annum. Under Ex. B-1, the respondent informed the appellants that though the mortgage deed mentioned that interest at 6 per cent per annum was payable on the principal amount of Rs. 1000 since the major portion of the principal amount formed part of the balance due on dealings between the parties, he would not claim any interest and the mortgage would stand discharged if the principal sum of Rs. 1000 was paid by the appellants to the respondent herein. The mortgage deed, Ex. A-1, though dated 111-1955, was registered only on 25-11-1955. Subsequently the appellants herein transferred their interest in the mortgaged property in favour of defendants 3 to 5, imposing an obligation on them to discharge the mortgage. Thereafter, the present suit was instituted by the respondent herein, for recovery of a sum of Rs. 1597-50 from the appellants as well as defendants 3 to 5, the said amount consisting of the principal amount of Rs. 1000 and interest of Rs. 597-50 from 111-1955 onwards. On 4-1-1966, the respondent made an endorsement that a sum of Rs. 1000 was paid to him out of Court by defendants 3 to 5. The appellants herein in their written statement admitted the execution of the mortgage deed, ex. A-1, but contended that in view of the understanding between the parties, as evidenced by Ex. B-1, no interest was payable and even before the institution of the suit, as soon as notice was received from the respondent herein, the appellants had intimated defendants 3 to 5 to pay the principal amount of Rs. 1000 immediately to the respondent herein. Since the principal amount of Rs. 1000 was received by the plaintiff (respondent herein) the only question that had to be considered by the learned District Munsif was whether the respondent was entitled of any interest as provided for in Ex. A-1. He came to the conclusion that since Ex. B-1 was not registered, it could not prevail against the registered document Ex. A-1 and therefore the respondent was entitled to interest, with the result on 27-7-1966, he decreed the suit for Rs. 597-50. With regard to costs, he came to the conclusion that having regard to the fact that the principal amount had been paid, it was a fit case in which the respondent-plaintiff could be awarded half costs and accordingly awarded half costs. As against this judgment and decree of the learned District Munsif, the appellants herein preferred an appeal to the learned District Judge of North Arcot at Vellore. The learned District Judge on 137-1967, dismissed the appeal, A. S. 341 of 1966 agreeing with the conclusion of the learned District Munsif. There was cross-objection by the respondent herein contending that he was entitled to full costs. The said cross-objection was also dismissed by the learned District Judge. Hence the present second appeal by defendant 1 and 2 in the suit and the cross-objections by the plaintiff in the suit.

(3.) AS I have pointed out already, as far as the second appeal is concerned, the sole question for consideration is, whether the respondent is entitled to interest at the rate of six per cent per annum on the principal amount of Rs. 1000 as provided for in the mortgage deed Ex. A-1. Both the Courts below relied on the decision of the Supreme Court in Kashinath Bhaskar Datar v. Bhaskar vishweshwar for coming to the conclusion that any agreement between the mortgagor and the mortgagee with regard to change of rate of interest as originally provided for in the mortgage deed would attract S. 17 (1) (b) of the Indian Registration Act and therefore would require registration. Before the learned District Judge two points were urged on behalf of the appellants herein. One was that the Supreme Court judgment dealt with an agreement subsequent to the mortgage deed under which interest already accrued was given up, and therefore, that decision had no application to the present case where Ex. B-1 was contemporaneous with Ex. A-1. The second point was that the giving up of interest under Ex. B-1 was with reference to future interest that was yet to accrue and therefore that will not fall within the scope of S. 17 (1) (b) of the Registration Act. The learned District Judge rejected both these contentions. With regard to the first contention, the learned District Judge pointed out that the very language of Ex. B1 showed that it was executed after Ex. A-1 was executed and therefore it was a subsequent agreement. With regard to the second contention, the learned District judge relied on the use of the expression, "whether in present or in future" in S. 17 (1) (b) of the Registration Act and came to the conclusion that such an expression would comprehend the giving up of future interest as well. I do not have the slightest hesitation in coming to the conclusion that the learned District Judge was wrong on both these conclusions. As I have pointed out already, Exs. A-1 and B-1 came into existence simultaneously as forming part of one and the same transaction. The circumstances under which they came into existence, I have already given in detail. A sum of Rs. 700 was due by the first appellant alone to the respondent herein, by virtue of the business dealings they had previously and that was an unsecured loan. The respondent wanted to have the same secured by obtaining a mortgage from both the appellants to whom alone the property belonged. It is only for the purpose of inducing both the appellants to execute a mortgage in respect of their property in favour of the respondent herein, the respondent executed Ex. B-1 on the same date. Ex. B-1 itself describes as "adamana Pattirattin Edinedai Vartamana letter. " (Original in Tamil transliterated-Ed.)In his evidence also the respondent has admitted that Ex. B-1 was a counterpart executed by him. Therefore, it is indisputable that Exs. A-1 and B-1 formed part of the same transaction and were brought into existence at the same time. From the very nature of the case, one document had to be written up first before the other could be written up. Therefore, from the sequence alone, it cannot be contended that the mortgage document Ex. A-1 having been written up first and the varthamanam letter Ex. B-1, having been written up later, at the same time and on the same date, Ex-B-1 can be considered to be a subsequent agreement to vary the rate of interest provided for in Ex. A-1. Equally with regard to the second contention, the learned District Judge failed to note the well-settled interpretation put up on the words "in present or in future" in S. 17 (1) (b) of the Registration Act. This is what is stated in Mullah's Commentary on the Indian Registration Act VIIth edn. at page 36: "the words 'in present or in future' were first inserted in Act 30 of 1866. The words 'in future' have reference to estates in remainder or in reversion, or to estates otherwise deferred in enjoyment". In view of this, it is impossible to agree with the learned District Judge that the words "in future" have reference to interest on principal amount that may accrue in future. Consequently, both the reasons given by the learned District Judge for rejecting the case of the appellants herein are not sound.