S G SOMASUNDARAM CHETTIAR Vs. (MAHIBALA) MUTHIRULAPPA PILLAI

JUDGEMENT

(1.) The second appeal arises out of a suit brought by the plaintiff (the appellant) for the recovery of a sum of Rs. 430 alleged to be due on the plaint-mentioned mortgage deed executed by defendant 1 on 23 October 1912 in favour of one Sevugan Chetty. The plaintiff is an assignee of the mortgage bond under a deed of assignment executed by Sevugan Chetty's son, Ramana than Chetty, on 15 March 1924. The original mortgage deed" is styled as a usufructuary mortgage containing a covenant to pay. The plea of defendant 1 is that Sevugan Chetty remitted the whole of this amount by passing a letter on 26 February 1918, whereby the mortgage debt became extinguished. That letter has been filed as Ex. 1. On the basis of this letter, both the Courts below have dismissed the plaintiff's suit. In this second appeal, the main question argued is whether the document Ex. 1 is admissible in evidence without registration. The terms of that letter are as follows: I am very glad to see the notice given to me by vakil Krishnaswamy Ayyar of Sivaganga on your behalf. Let my money go any way. It is enough if you are happy. This has been written to let you know that I do not require the sum of Rs. 430, which I paid on your behalf to Andiappa Chetty.

(2.) It is beyond doubt that this sum of Rs. 430 is the amount due under the plaint-mentioned mortgage bond to Sevugan Chetty. Ex. 1 is the letter written by Sevugan Chetty (the mortgagee), whereby he expressly relinquishes the amount of Rs. 430, the principal sum due thereunder. The question is whether this document comes within the purview of Section 17, Sub-section (1), Clause (b), Registration Act. That clause makes registration compulsory in the case of any non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish any right, title or interest of the value of Rs. 100 and upwards to or in immovable property. On a perusal of Ex. 1, it is clear that it does not in terms purport to extinguish the mortgagee's interest in the mortgaged property. It is argued that it does operate to extinguish such interest. The distinction between the words purport" and "operate" is clearly explained in the judgment of Srinivasa Ayyangar, J., in the case reported in Gopalaswami Ayyar V/s. K. Rangappa AIR 1925 Mad 348. Dealing with Clause (b) of the aforesaid section and Excep. (2) to that clause which deals with a receipt for payment of money due under a mortgage, when the receipt does not purport to extinguish the mortgage, the learned Judge observes that the omission of the words or operate" in Excep. (2) has some significance. He states that the obvious conclusion to be drawn from this deliberate difference in the wording is, that receipts granted for money paid may extinguish the debt and may there fore operate to extinguish the security, but if they do not purport in terms to extinguish the security, they need not be registered. This is so with reference to the wording of Excep. (2), Clause (b), Section 17. But the wording of Clause (b) itself is wider and the significance of the wider language used in that clause is also stated by the learned Judge in the following passage: If the document should be merely an agreement to reduce the amount payable under the mortgage, it is conceivable that it might fall within the terms of Clause (b), Section 17, because it may, though not purporting to do so, operate to limit or extinguish rights in immovable property.

(3.) These observations are very pertinent to the present case. I adopt the opinion of the learned Judge and hold that Ex. 1, though it does not purport to extinguish the mortgage debt, does operate to extinguish the mortgage security. If the mortgagee states in writing that he forgoes the entire amount due in respect of the mortgage deed, the legal effect of such relinquishment; is the extinguishment of his interest in the mortgage security. In other words such relinquishment operates to extinguish his interest in immovable property of a value of more than Rs. 100. The decision in Gobardhan Sahi V/s. Jadunath Rai (1913) 35 All 202, seems to me to be on all fours with the present case. In that case, the agreement was by the mortgagee to relinquish a portion of the principal and all interest, past and future, due under the mortgage bond. That document does not in terms purport to extinguish the mortgagee's interest in the mortgage security. It has been held that that document was clearly an agreement to forgo in part the mortgagee's rights as against the mortgaged property in consideration of services rendered. I understand this observation to mean that the agreement operated to extinguish the mortgagee's interest in the security, within the meaning of Clause (b), Section 17, Registration Act. This decision has been referred to with approval in a decision of a Division Bench of this High Court reported in Lakshmana Setti V/s. Chenchuramayya (1918) 44 IC 132. In that case the question was discussed at some length and it was held that an agreement in writing whereby the mortgagee relinquishes a sum of more than Rs. 100 out of the mortgage money is compulsorily registrable and is inadmissible in evidence if not registered. It is true that in that agreement there are the words "we shall return the documents," but the whole reasoning of the learned Judges does not seem to turn upon the introduction of those words in the agreement. The trend of their decision seems to be, that the mere fact of the relinquishment of a sum of more than Rs. 100 out of the mortgage money operates to extinguish the mortgagee's interest in the mortgage security to that extent, and therefore registration is necessary. As the document in question in the present suit is in no sense a receipt, Excep. (2), Clause (b), Section 17, does not apply and requires no consideration. In view of these authorities, I am of opinion that Ex. 1 is inadmissible in evidence for want of registration. The view of the lower appellate Court is clearly erroneous, for the document, Ex. 1, can in nonsense be deemed to be a receipt. I there-fore hold that Ex. 1 must be ignored for the purpose of deciding the suit.