JAGANNATH AND TWO ORS, SONS AND HEIRS OF THE DECEASED KASHIRAM MANIRAM TAMBOLI Vs. SHANKAR VALAD GANPAT SHIMPI

JUDGEMENT

(1.) This is an appeal under the Letters Patent from the decision of Mr. Justice Batchelor. The trial Court had admitted evidence led by the defendant to show that the two mortgages in the suit were discharged by the mortgagee by a payment of Rs. 800. It was argued in appeal that this evidence was inadmissible on the ground that it rescinded or modified the contract required to be in writing which had been registered according to law. The learned appellate Judge has held that the evidence called and received was directed to a totally different purpose, namely, the purpose of showing that these contracts of mortgage had been terminated by the discharge of the obligation imposed by them, and he saw nothing in Section 92 prohibiting the admission of such evidence. We have been referred to the recent case of Mallappa v. Matum Nagu Chetty (1918) 42 Mad. 41. which seems to be exactly on all fours with the present case. The head-note runs: "A subsequent oral agreement to take less than is due under a registered mortgage-bond is an agreement modifying the terms of a written contract, and, if it has to be proved, oral evidence is inadmissible under Section 92, proviso 4, of the Indian Evidence Act." But the argument before us has been that there has not been a subsequent oral agreement to rescind or modify the mortgage, but there has been an actual discharge, and that oral evidence was admissible to prove a discharge. In my opinion there is no substance in that argument. The defendant s case must be that the mortgagee agreed to receive Rs. 800 in full satisfaction of the much greater amount which was due on the mortgage, and although he might have said when receiving Rs. 800 "I now discharge you from the mortgage," there was none the less an agreement which modified the original agreement of mortgage. It would be an extremely dangerous precedent if oral evidence were allowed of such agreements. In this case it may be noted that the plaintiff himself denied having received Rs. 800, or having given a discharge on the mortgage, although the payment has been proved as a fact. But one can easily imagine that there may be many cases where the mortgagor may set up a false case of such an agreement, and it appears to me that it was to meet such cases inter alia, that proviso 4 of Section 92 of the Evidence Act was enacted. In my opinion the appeal must succeed. The result will be that the defendant will be allowed credit for Rs. 800 which he has proved he has paid to the mortgagee. We allow the appeal with costs in proportion throughout, and remand the case to the lower Court to take an account in accordance with this judgment. Heaton, J.

(2.) I agree. But as the case presents so many possibilities of argument, I would like to put my conclusion in my own way. There are three ways in which the defendant s case might have been presented. The defendant might simply have pleaded that the mortgage was discharged and nothing further. That was not what he did plead, and presumably not what he could have proved. So I come to the second way in which the defendant could make his defence, and that was the way he adopted. He said that an agreement had been entered: into between the mortgagee and the mortgagor according to which, on the payment of Rs. 800, which was only a part of the mortgage debt, the mortgagee would give a complete discharge, and the mortgage-deed would cease to operate. It is found as a fact that Rs. 800. were paid. But this payment Was a payment of part only of the mortgage debt, so the mortgage-deed would still be operative; it would still regulate the relations between the mortgagor and the mortgagee, unless there had been some modification of its terms. The modification suggested is that the mortgage debt should be changed, from what under the deed it would be, to a sum of Rs., 800. That would be a very large modification of the terms of the deed. This modification could not be proved, as is provided by proviso 4 to Section 92 of the Evidence Act, by the method by which the defendant sought to prove it. We cannot therefore take it that the defendant can succeed in this way. He has not shown that the mortgage debt has been discharged because the law of evidence prevents him from showing it.

(3.) The third way in which the defendant might have presented his defence was one which has not been adopted by him, and as to which I will say nothing beyond mentioning it. He might have pleaded that the mortgagee had entered into an agreement to reconvey to him the mortgaged properties on payment of Rs. 800. Whether that defence would have availed him or not I do not know. But I do not wish my judgment to be understood as stating that a defence of that kind would necessarily be excluded by the law of evidence. I, therefore, agree with the proposed order.