SRINIVASSA AYYANGAR Vs. AKAYYA NAIDU

JUDGEMENT

(1.) The only question that I have been called upon to determine in this appeal is whether that portion of Ex. 4 which waives a certain amount of debt due on a mortgage bond is not hit by the provisions contained in Section 17, Registration Act. How this receipt came into existence would be clear by the following facts. Certain properties were mortgaged by defendants 1 and 2 in August 1921 with defendant 3. This was followed by a partition between defendants 1 and 2 under which the properties mentioned in Schedule A attached to the plaint fell to the share of defendant 2 and those described in Schedule B were allotted to that of the first one.

(2.) The properties in Schedule A were sold by defendant 2 in April 1926 to defendant 5. On 26 February 1929, defendant 3, who was a mortgagee of the properties contained in Schedules A and B of the plaint, entered into an agreement with defendant 5 to the effect that the former would accept Rs. 1350 in full satisfaction of his claim from the latter-in regard to the properties mentioned in the A schedule and the balance of the sum due was waived by the mortgagee out of grace . In pursuance of this arrangement, a sum of Rs. 1100 was paid by defendant 5 who also agreed to pay the balance of Rs. 250, within a month. Defendant 3 then executed a receipt (EX. 4) in favour of defendant 5 in which the whole agreement, the terms of which have been briefly stated, was incorporated. The balance of Rs. 250 was not paid within the period mentioned in the receipt and defendant 3 assigned all his rights under the mortgage in October 1929 to defendant 4, who in his turn assigned them to the plaintiff. The equity of redemption in the B schedule properties was sold by defendant 1 to the plaintiff who has brought the present suit on the basis of the mortgage. Defendant 5 naturally pleaded the arrangement arrived at between him and the original mortgagee; and the receipt Ex. 4 incorporating the relinquishment of the balance by the original mortgagee was produced by him in evidence. The plaintiff objected to its admissibility for want of registration but his contention was overruled by both the lower Courts. The plaintiff appeals. It may be stated in passing that a sum of Rs. 1854 was due to the original mortgagee on the date when Ex. 4 was executed. A sum of Rs. 1100 was received by him in cash and he had agreed to receive Rs. 250 in full settlement. A sum of Rs. S04 was thus relinquished by him. In overruling the plaintiff's contention in regard to the admissibility of Ex. 1 the learned District Judge remarked as follows: If a certain amount had been relinquished in a receipt, that receipt cannot be said to be inadmissible, simply because it has not been registered even it the payment of money as well as the relinquishment nave the affect of relinquishing a mortgage right.

(3.) In view of the language used in Section 17(1)(b), Registration Act, it is not easy to agree with this statement. There is obviously a distinction between a receipt of money and a relinquishment of a claim by a creditor. When a receipt does not purport to extinguish a mortgage deed but merely operates to do so, it may be admissible in evidence without registration on account of exception (xi) mentioned in Section 17, Sub-clause 2 of the Act. J5ut when a document is not a receipt of money but something more and does not come within the ambit of exception (xi) it would require registration to be admissible fin evidence for the simple reason that it is a document which purports or operates to limit or extinguish either in present or in future, a right, title or interest of the Value of more than Rs. 100 to or in the mortgaged property. The distinction between a receipt and an agreement of relinquishment of tights in a mortgaged property has been pointed out by a Division Bench of the Allahabad High Court in Gobardhan Sahi V/s. Jadunath Rai ( 31) 35 All. 202 and has boon followed by a Division Bench of this Court in Lakshmana Setti V/s. Chenchuramayya ( 81) 5 A.I.R. 1918 Mad. 331. Bearing the clear words of Section 17(1)(b), Registration Act, in mind it seems to be unnecessary to cite any other cases in support of the proposition that the document, Ex. 4, to the extent that it relinquished more than Rs. 300 was not admissible in evidence without registration. The learned Counsel for the respondent has placed his reliance on the case reported in 43 Mad 8033 at page 806. That is however distinguishable as the learned Judges found in that case that the receipt given by the mortgagee did not expressly extinguish the mortgage interest, although it acknowledged the receipt of the mortgage debt. In view of the words used in exception (xi) of Section 17, Sub-clause 2, a distinction was drawn between a discharge of a debt and the extinguishment of a mortgage interest, though one might be the result of the other and it was pointed out that where a receipt in terms only discharged the debt, it did not require registration to be admissible in evidence. This case has therefore no bearing on the point which has to be decided here. It must therefore be held that the document on which reliance was placed by the defendant to show that the mortgagee had relinquished the sum of Rs. 304 is inadmissible in evidence. The result is rather unfortunate. But, in view of the mandatory provisions of the Registration Act, it cannot be helped. The plaintiff who is an assignee of the mortgagee would be entitled to recover the balance due under the mortgage from defendant 5, whose liability would be limited to the extent of the property purchased by him. The plaintiff would also be entitled to recover interest at the rate contained in the mortgage deed, i.e., 9 per cent, upto the date fixed by the lower Court for redemption on the balance of principal amount due under the mortgage and at 6 per cent, from the date of suit up to the date of realisation. The plaintiff will get his costs of the appeal and the order for costs passed by the lower Courts in favour of the defendants Will be set aside. Leave refused.