Andhra HC (Pre-Telangana)
Umde Bhojram vs Wadla Gangadhar on 23 January, 2004
Equivalent citations: 2004(2)ALT367
ORDER G. Yethirajulu, J.
1. This revision petition is filed by the plaintiff in O.S.No.21 of 1999 under Section 115 C.P.C. praying to set aside the order of the Junior Civil Judge, Bhainsa dated 30-9-2002.
2. The plaintiff filed the suit for recovery of Rs. 22,500/- on the basis of an unregistered mortgage deed dated 10-101996 alleged to be executed by the defendant in his favour. The defendant resisted the suit by contending that he never executed the mortgage deed by receiving the said amount. He undertook wood work of the house of the house of the plaintiff and after completion of the work the plaintiff did not settle the accounts and pay the amount to him. During the subsistence of the contract the plaintiff obtained his signature on blank stamped paper by misrepresentation and created a false and fabricated document.
3. During the course of trial of the suit the plaintiff was examined as P.W.1. In the chief-examination the plaintiff intended to mark an unregistered mortgage deed dated 10-10-1996 but the defendant raised objection for marking the same. The lower court therefore took up the matter for consideration whether the unregistered mortgage deed dated 10-10-1996 can be received in evidence for collateral purpose or whether it is liable to be rejected. The lower court after referring to Section 49 of the Registration Act, 1908 (for short 'the Act'), Rulings on this aspect and the contents of the document came to the conclusion that there is no personal covenant in the document to discharge the debt without reference to the mortgaged property. Accordingly, the lower court upheld the objection raised by the defendant and gave a finding that the unregistered mortgage deed dated 10-10-1996 cannot be received in evidence and marked for collateral purpose also.
4. The plaintiff being aggrieved by the said order, preferred this revision petition contending that since the suit is for recovery of money, it can be marked in evidence for collateral purpose to show that there was a loan transaction between the plaintiff and the defendant.
5. The learned counsel for the respondent-defendant contended that since the mortgage deed is a compulsorily registrable document under Section 17 of the Act, it is not admissible in evidence, therefore, it cannot be marked as a document in support of plaintiff's claim.
6. The point for consideration is whether the unregistered mortgage deed dated 10-10-1996 can be received in evidence for the collateral purpose of proof of debt?
Point:
7. The plaintiff is contending that the defendant borrowed Rs. 22,500/- by executing an unregistered simple mortgage deed in his favour mortgaging the land of an extent of Ac.2-11 guntas situated in S.No.115. It is the further contention of the plaintiff that since there is a personal undertaking given by the defendant in the said document to repay the debt, he is entitled to rely on the said document for proving the debt without going into the aspect of creating, declaring, assigning, limiting or extinguishing a right to the property covered by the said document.
8. The defendant while denying the borrowing of the amount and execution of the document contended that as the said document is an unregistered one, it is not admissible in evidence, therefore, it cannot be used even for collateral purpose. The defendant further contended that the contents of the document also do not indicate the personal undertaking of the defendant to repay the amount, therefore, it cannot be marked.
9. Section 17 (1)(c) of the Act reads as follows:
17. Documents of which registration is compulsory:
(1) The following documents shall be registered, if the property to which they relate is situate in a district in which and if they have been executed on or after the date on which, Act No.XVI of 1863, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:
xxx
(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation for extinction of any such right, title or interest;
xxx Provided that the State Government may, by order published in the Official Gazette, exempt from the operation of this sub-section any leases executed in any district, or part of a district; the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty rupees.
xxx
10. The learned counsel for the revision petitioner relied on certain decisions of various High Courts in support of his contention regarding the admissibility of the document.
11. In Muruga Mudaliar v. Subba Reddiar, (FB) a Full Bench of the Madras High Court held that Section 49 (c) of the Registration Act prohibits the use of an unregistered document in any legal proceeding in which such a document is sought to be relied on in support of a claim to enforce or maintain any right, title or interest to or in immovable property. So long as the document is not sought to be relied on as evidence of any right, title or interest to or in immovable property, there is nothing to prevent the document being received in evidence for other purpose.
12. In Panchapagesa v. Kalyana Sundaram2 the learned Judges of Madras High Court observed at page 480, in paragraph 25, as follows:
To sum up it is well settled in a long series of decisions which have since received statutory recognition by the Amending Act of 1929 (vide the concluding words of the new proviso to S.49 of the Registration Act) that a compulsorily registrable but an unregistered document is admissible in evidence for a collateral purpose, that is to say, for any purpose other than that of creating, declaring, assigning, limiting or, extinguishing a right to immovable property.
13. In Karan Raj v. Chunnilal , a single Bench of the Rajasthan High Court while dealing with Section 58 of the Transfer of Property Act, 1882 and Section 49 of the Registration Act, 1908 held that an unregistered mortgage deed may be received as evidence of personal obligation to pay the debt for the purpose of granting a simple money decree.
14. According to the above rulings, a document required to be registered but not registered can be used as evidence of any collateral transaction not required to be effected by a registered document and it prohibits only the user of the documents for establishing any right, title or interest to or any immovable property.
15. In Pulaka Vetil Muthalakulangara Kunhu Moidin and others v. Thiruthipalli Madhava Memon and others, 19 MLJ 584 (F.B.) a Full Bench of the Madras High Court held that a document which contains a personal covenant to pay a debt and which purports to mortgage immovable property as a security for the debt is, if attested by two witnesses as required by Section 59 of the Transfer of Property Act, admissible in evidence to prove the personal covenant, notwithstanding the fact that it is not registered.
16. In Khantamoni Dassi v. Biswa Nath, AIR 1933 Calcutta 768 the Calcutta High Court held as follows:
Even though a bond, which ought to be registered, is not registered, the promisee can rely on the simple contract contained in the bond for personal covenant to repay; but the suit on such simple covenant cannot affect the immovable property in the subject matter of the bond.
17. In Sanjya v. Chauthmal, the Rajasthan High Court held as follows:
As the document was not registered as required by Section 59 of the Transfer of Property Act, there was no transaction of mortgage at all and it could not be admitted in evidence even for the limited purpose of proving the receipt of consideration in view of Section 17 (1)(c) read with Section 49 of the Registration Act.
18. In Habib Dar v. Smt. Zoona Bhibi, AIR 1965 J & K 48 the Jammu & Kashmir High Court held:
Where the defendant in a suit presented unregistered document inadmissible in evidence under Sec.49 and wish to use the same merely to prove the admission of the executant to have received money, which was a clear defence to plaintiff's suit.
19. In Mon Koch v. Smt. Guneshwari Bora & others , AIR 1968 Assam & Nagaland 10 the Gauhati High Court held that a mortgage deed securing debt of Rs.500/-, but not registered, is inadmissible to prove the mortgage, but can be relied on for the purpose of proving personal covenant to repay the debt when it is severable from other parts of document.
20. In Mangal Singh v. Tek Ram, the Delhi High Court held as follows:
Under Sections 17 and 49 of the Registration Act, a document compulsorily registrable, not registered can be admitted in evidence for collateral purpose of showing nature of possession subsequent to execution of the document.
21. In Sardar Amar Singh v. Smt. Surinder Kaur , the Madhya Pradesh High Court held as follows:
Sec.49 of the Registration Act does not say that an unregistered document which is required to be registered shall not be received in evidence. The only bar is that such a document cannot be received as evidence of any transaction affecting the property. As a matter of fact, the proviso to Sec.49 clearly empowers the Courts to admit any unregistered document as evidence of collateral transaction not required to be registered.
22. In Bhavanarayana v. Official Receiver, 1971 (II) ALT 39 this Court held as follows:
Here a deposit of title deeds was made by a letter in which it was mentioned why the document was deposited. There is nothing but the letter to connect the deposit with the debt. The letter does not show that it is merely evidential of something which either had already been done earlier or to be done in future. Therefore, by Ex.A.7 the bargain was reduced into writing and it embodied the contract of the contract of the mortgage itself between the parties. If that is so, Ex.A.7 required registration and not having been registered, it cannot be used in evidence at all and the transaction cannot also be proved by oral evidence either.
23. In B. Narayanamma v. Ramaiah, (1975) 2 APLJ 298 the A.P. High Court held as follows:
An unregistered document of transfer which is required to be registered and not registered is admissible in evidence to prove the date of entering into and the fact of possession of the transferee and to show the character of his possession. Though an unregistered document required to be registered under law is not admissible in evidence to claim any right under it, it would be admissible in evidence for a collateral purpose i.e., for a purpose other than that for which the document was created.
24. In State Bank of India v. Smt. B. Laxmamma, 1975 (1) APLJ 252 (H.C.) a Division Bench of this Court while dealing with the proviso to Section 49 of the Registration Act held that the unregistered letters of guarantee executed by the surety in favour of the Bank for the amounts borrowed by the borrower giving immovable property as collateral security are enforceable to the extent of personal guarantee of the surety.
25. In L. Yadava Reddy v. Anasuyamma and others, 1977 APHCN 166 the A.P. High Court held that the proviso to Section 49 of the Registration Act is attracted to the facts and circumstances of the case, and as such an unregistered usufructuary mortgage, executed by the defendant, is admissible in evidence to prove the collateral transaction viz., the borrowal by the defendant by which he agreed to pay the amount borrowed.
26. In Hari Waman v. Pappula Narsimulu, a learned single Judge of this Court while dealing with the proviso to Section 49 of the Registration Act held that an unregistered usufructuary mortgage deed is admissible in evidence to show the nature and character of possession. The order refusing to admit such document in evidence is liable to be set aside.
27. As per the above decisions of various High Courts, including this Court, an unregistered mortgage deed can be admitted in evidence for collateral purpose of recovery of money covered by an unregistered mortgage deed without touching upon the right regarding the property when there is a personal covenant to repay the debt, which is severable from other parts of the document.
28. The learned counsel for the respondent-defendant relied on a judgment of this Court in P. Narayana Rao v. Smt. K. Venu Kumari, wherein a single Judge of this Court held that unregistered simple mortgage deed not disclosing any covenant undertaking to discharge liability personally by mortgagor without reference to mortgaged property is not admissible in evidence to prove the borrowing and the suit on the basis of such document is not maintainable.
29. In the above decision, the learned Judge made the position clear that if the document in question contains a covenant whereby the executant undertakes to discharge the liability personally and without reference to the mortgaged property and if that document is not registered, still it can be admitted in evidence for the purpose of proving the personal liability and the borrowing. But, since the document referred in the case covered by the above decision does not contain any covenant undertaking to discharge the liability personally without reference to the mortgaged property, the Court held that the document is not admissible in evidence to prove the borrowing also.
30. In the light of the principle laid down by the majority of the Courts, I am also of the view that an unregistered simple mortgage deed disclosing any covenant undertaking to discharge the liability personally by the mortgagor without reference to the mortgaged property is admissible in evidence to prove the suit debt.
31. In the case on hand, the relevant portion of the unregistered simple mortgage deed dated 10-10-1996 reads as follows:
by this deed I agree that I will repay the entire amount prior to Ugadi 1997 and will get back my land and this document. If in case of my failure to repay the amount, the period of agreement will be extended for one more year automatically. Till the amount is repaid, I or my legal heirs or successors will not claim any right in possession, if any. Such claim if made will be null and void and its entire responsibility will be mine.
32. The lower court after going through the said document observed that there is no covenant undertaking to discharge the liability personally without reference to the mortgage property and from the above recital it cannot be said that the executant agreed to pay the money personally. The lower court erred in not taking into consideration the above underlined portions of the unregistered simple mortgage deed regarding the personal undertaking given by the executant. Since the suit is for recovery of money covered by the claim, it can be marked for collateral purpose for the recovery of money. The order of the lower court is therefore liable to be set aside.
33. In the result, the revision petition is allowed. The impugned order dated 30-9-2002 of the lower court is set aside. The lower court is directed to admit the unregistered simple mortgage deed into evidence for the purpose of recovery of money on payment of stamp duty, if not already sufficiently stamped or paid. No order as to costs.