Equivalent Citation: AIR1952SC153, 1952(54)BOMLR543, [1952]1SCR491
IN THE SUPREME COURT OF INDIA
Decided On: 22.02.1952
Appellants:Kashinath Bhaskar Datar
Vs.
Respondent:Bhaskar Vishweshwar Karve
Hon'ble Judges/Coram:
S. Murtaza Fazal Ali and Vivian Bose, JJ.
Indian Registration Act 1908 - s. 17(1)(b)—Subsequent document varying terms of the previous document—“Interest” in Immovable property being limited and extinguished
Indian Registration Act (XVI of 1908), Section 17(1)(b), 17(2)(v)(xi)-Indian Evidence Act (I of 1872), Section 92, prov. 4-Mortgage-Mortgagee entitled to certain rate of interest under mortgage bend- Subsequent written agreement between mortgagor and mortgagee reducing rate of interest-Whether agreement requires registration.
One part of the "interest" which a mortgagee has in mortgaged property within the meaning of Section 17(1)(b) of the Indian Registration Act, 1908, is the right to receive interest at a certain rate when the document provides for interest. If that rate is varied, whether to his advantage or otherwise, then his "interest" in the property is affected. If the subsequent agreement substitutes a higher rate, then to the extent of the difference it "creates" a fresh "interest" which was not there before. If the rate is lowered, then his original "interest" is limited.
U Po Thin v. The Official Assignee (1938) R.L.R. 293 : s.c. [1938] A.I.R. Ran. 285, approved.
Tika Ram v. Deputy Commissioner of Bara Banki (1899) L.R. 26 I.A. 97 100 : s.c. 1 Bom. L.R. 692 referred to.
There is a difference between a receipt acknowledging payment of the mortgage debt and a remission or a release by the mortgagee. A receipt is not the payment, nor does the document in such a case serve to extinguish the mortgage or limit the liability. It is the payment of the money which does that and the receipt does no more than evidence the fact. Not so a release. The extinguishment or diminution of liability is in that event effected by the agreement itself and not by something external to it. If the agreement is oral, it is hit by proviso 4 to Section 92 of the Indian Evidence Act, 1872, for it "rescinds" or "modifies" the contract of mortgage. If it is in writing, it is hit by Section 17(1)(b) of the Indian Registration Act, 1908, for in that case the writing itself "limits" or "extinguishes" the liability under the mortgage.
If the mortgagee cannot, in the face of the subsequent agreement, enforce the terms of his bend, then the subsequent undertaking has effected a modification, and if that has the effect of limiting or extinguishing the mortgagee's interest, it is hit either by Section 17(7)(b) of the Indian Registration Act, 1908, or a. 92, prov. 4, of the Indian Evidence Act, 1872. But when there is a mere payment of money, that is done under the terms of the bend, for the contract of mortgage postulates that the mortgagor should repay the money borrowed, and (that when he does so, the mortgagee's interest in the property shall be "limited" to the extent pf the repayment or, when all is repaid, be wholly extinguished ; nor does a payment have to be made by a written or registered instrument, or oven evidenced by one. Clause (xi) to Section 17(2) of the Indian Registration Act is based on this principle. It draws a distinction between a document which, by force of its terms, effects the extinguishment, or purports to do so, and one which merely evidences an external fact which brings about that result.
If a document itself creates an interest in Immovable property, the fact that it contemplates the execution of another document will not exempt it from registration under Section 17(2)(v) of the Indian Registration Act, 1908.
Vivian Bose, J.
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