P T KRISHNASWAMI AIYANGAR Vs. JONNAGADLA GOURIAMMA

JUDGEMENT

(1.) This is an appeal against the decree of my Lord the Chief Justice sitting on the Original Side in C.S. No. 483 of 1930. The facts out of which the suit arose are these: The plaintiff is the junior widow and the executrix of the estate of J. Rangiah Chetty who died on or about 21 June 1921, leaving a will under which he appointed the plaintiff as executrix. One C. Venkatasubbiah Chetty of Madras executed a promissory note dated 2 June, 1919 for Rs. 12,000 with interest at 9 per cent. in favour of the said Rangiah Chetty. It is alleged by the plaintiff that the said Venkatasubbiah Chetty deposited by way of equitable mortgage with the said Rangiah Chetty title-deeds relating to his immoveable properties and premises situated in Madras. Under a compromise decree in C.S. No. 38 of 1923 on the file of the High Court the right to the said promissory note and security represents the legacy due to the minor plaintiff in that suit; and it is vested in the plaintiff and defendant 5 in this suit as trustees for the said minor plaintiff in that suit. Certain payments were made to the plaintiff in respect of the promissory note and the present suit is to recover the balance due by sale of the properties covered by the equitable mortgage above mentioned. Defendant 1 is the widow of the said Venkatasubbiah Chetty. Defendant 2 is his brother-in-law, and defendant 3 is his brother.

(2.) The said three defendants are executors under the will of the said Venkatasubbiah Chetty. Defendant 4 is impleaded as a mortgagee of the suit properties under two mortgage deeds dated 26 June 1924 and 24 November 1924 for Rs. 15,000 and Rs. 5,000 respectively. Defendants 1, 2 and 4 raise the contention that the equitable mortgage on the basis of which the plaintiff files this suit is not valid as it is evidenced by a contemporaneous document which was not registered. The second issue in the case is, is the mortgage invalid as stated in para. 4 of defendant 1's written statement? Issue 5 is, is the mortgage in favour of defendant 4 binding on the estate of the deceased Chevula Venkatasubbiah Chetty? Issue 6 is, what is the amount due to the mortgagees? At the trial the document evidencing the deposit of title-deeds though not mentioned in the plaint was produced by the plaintiff as P.W. 1 but without giving any further information about it. Practically the one point considered by the trial Judge is the question whether this document dated 2 June, 1919 required registration. The document is Ex. 1. It is described as a collateral security bond. After mentioning the execution of the promissory note it proceeds thus: I have this day deposited as collateral security with you the title-deeds of my house and ground.... I shall therefore pay you the principal and interest accruing due on the said promissory note from this date in full and redeem the said title- deeds. To this effect is the collateral security bond executed by me....

(3.) It is now settled by the Privy Council decision in Subramaniam V/s. Lutchman 1923 50 Cal 338, that if such a document requires registration the equitable mortgage falls to the ground. The document is on stamped paper and is attested. It is clear on the face of it that it was intended to be a formal document because it contains the terms of the transaction and it is not a mere letter reciting merely the past fact of the deposit of title-deeds. In Sundarachariar v. Narayana Ayyar 1931 54 Mad 257, the Privy Council observe that if the document is signed and delivered at such time and place and in such circumstances as to lead legitimately to the conclusion that so far as the deposit is concerned it constitutes the agreement between the parties, it requires registration. In the actual case before their Lordships they held that it was a mere memorandum and did not require registration.