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Chunilal Someshvar Bhatt Vs. Vithaldas Karsandas - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtMumbai
Decided On
Case NumberSecond Appeal No. 502 of 1921
Judge
Reported in(1922)24BOMLR502
AppellantChunilal Someshvar Bhatt
RespondentVithaldas Karsandas
Excerpt:
indian registration act (xvi of 1908), section 17-equitable mortgage by deposit of title-deeds-the deed creating a charge not registered-stipulation to pass another agreement-deed ineffectual to create mortgage.;the defendant borrowed in bombay a sum of money from the plaintiff by depositing title-deeds of property situated outside bombay. the transaction was evidenced by a writing which recited the loan and the deposit and stipulated that the defendant would execute 'a pacca document in respect of the same' when called upon to do bo. the writing was not registered. the defendant admitted the advance. the plaintiff having sued to recover his money by sale of the mortgaged property :-;(1) that the writing in question required registration, although it gave the plaintiff a right to obtain a..........enable him to carry on trade in bombay, and in consideration thereof the defendant deposited the title deed of his house at godhra and created an equitable mortgage thereon for rs. 1,000. the defendant on the same day passed in bombay a chitti in respect thereof. the defendant admitted the payment of rs. 1,000 on the 19th november 1917, and alleged that that amount was to be accounted for in the partnership account at the end of the year, and he further contended that the equitable mortgage and the agreement relied upon by the plaintiff did not come within the jurisdiction of the court, as the agreement took place in bombay, the amount was paid in bombay and the defendant was doing business in bombay and residing in bombay.2. the trial court held that the court had jurisdiction to try.....
Judgment:

Norman Macleod, C.J.

1. The plaintiff sued to recover Rs. 1,000 principal, and Rs. 69-5-0 interest thereon, by sale of the mortgaged house mentioned in the plaint situated at Godhra, or in the alternative for a registered mortgage deed thereof, alleging that he had advanced that sum to the defendant to enable him to carry on trade in Bombay, and in consideration thereof the defendant deposited the title deed of his house at Godhra and created an equitable mortgage thereon for Rs. 1,000. The defendant on the same day passed in Bombay a chitti in respect thereof. The defendant admitted the payment of Rs. 1,000 on the 19th November 1917, and alleged that that amount was to be accounted for in the partnership account at the end of the year, and he further contended that the equitable mortgage and the agreement relied upon by the plaintiff did not come within the jurisdiction of the Court, as the agreement took place in Bombay, the amount was paid in Bombay and the defendant was doing business in Bombay and residing in Bombay.

2. The trial Court held that the Court had jurisdiction to try the suit, but as the chitti, Exhibit 12, on which the plaintiff relied, required registration, the suit failed. This decision was confirmed in appeal, and before us it has been argued, in the first place, that the defendant admitted that there was an equitable mortgage of his property, and therefore, the plaintiff on that admission was entitled to the decree he asked for. But I do not think it can be said that the defendant's pleading admits that there was an equitable mortgage which could be the basis of a decree. He merely refers in the written statement to the plaintiff's allegations and mentions what the plaintiff relies upon for establishing the creation of an equitable mortgage in Bombay.

3. Then it has been very strenuously urged that the document, Exhibit 12, does not require registration: and in order to determine whether it requires registration, we have to consider upon the proper construction of that document whether it creates a charge or an interest in the property mentioned therein; and with reference to documents connected with the deposit of title deeds, what the Court has to consider is laid down in Shaw v. Foster (1872) L.R. 5 E. Ap. 321 referred to in the judgment of the Privy Council in Pranjivandas Jagjivandas Mehta v. Chan Ma Phee I.L.R. (1916) Cal. 895: 'Although it is a well established rule of equity that a deposit of a document of title, without more, without writing or without word of mouth will create in equity a charge upon the property referred to, I apprehend that that general rule will not apply where you have a deposit accompanied by an actual written charge. In that case you must refer to the terms of the written document, and any implication that might be raised, supposing there were no document, is put out of the case and reduced to silence by the document by which alone you must be governed.'

4. In the case before the Privy Council the question was what was the scope and extent of the security, as the title-deeds of several properties had been handed over and the document accompanying them only referred to one property The question whether the document required registration was not before their Lordships.

5. It is difficult to see how Exhibit 12 can be considered as anything less than a mortgage, considering that it states after reciting the taking of Rs, 1,000:

In security of that we have given our one house in Godhra bearing Municipal No. 292 and with superstructure being Sanad No. 7, measuring 85 sq. yds, in mortgage for the above amount). And we have also given to you the copy of the Sanad. We shall execute a Pacca document in respect of the same whenever you may ask us. Its interest is settled at the late of eight annas It is agreed that von should return to us the copy of the Sanad on paying the above amount This is agreeable and binding on us.

6. If that document had been registered, and the mortgagor had thereafter sought to deal with the property, there can be little doubt that the plaintiff would have set up this document as conferring upon him a prior title. If there had been no document accompanying the title deed, then it would have been open to the plaintiff to prove orally what was the intention with which the document was deposited, and whether it was meant to be considered as a security. BUG as the defendant executed this document, we must refer to it in order to ascertain what was the contract. The fact that the defendant agreed to execute another document in formal terms, if he was asked for one, does not affect the value of the document signed, provided it is evidence of a complete transaction which can be spelt out of its wording. There is a certain clash of cases in which the parties only purport to record the terms of the agreement in an informal manner, intending that the formal expression of the oral agreement should be executed thereafter. But if the first document contains every thing that is necessary for the purpose of proving an agreement then the first document takes effect, unless it is stated to be a condition of the first document that it should not take effect unless the second document is executed. But in this case, there is a complete contract to be found in Exhibit 12 although the plaintiff had a right to obtain a mortgage deed drawn up in more formal language. It seems to me, therefore, that the Courts below were right in deciding that Exhibit 12 required registration.

7. Reference was made to the case of Behram Rashid v. Sorabji Rustomji I.L.R. (1913) 38 Bom. 372 16 Bom. L.R. 35 which was decided by Mr. Justice Beaman and myself, and there Mr. Justice Beaman very clearly points out the way in which contemporaneous writings of this kind should be dealt with.

8. The whole point is whether the document created a charge upon the property referred to therein, and once there is a writing with reference to the deposit of title deeds, then it is quite clear that the Court must refer to that writing, and can refer only to it, in order to determine what were the conditions on which the title-deeds were deposited. The plaintiff, therefore, was not entitled to a declaration that he had a charge on the property mentioned in the title-deeds deposited with him, or to an order for sale of that property to satisfy his claim, nor do I think he was entitled to obtain a mortgage deed from the defendant, as, if my construction of the deed is correct, he had already got a mortgage, and the only effect of his getting another document Would be to have the terms of the mortgage settled in a more formal manner. Therefore, if the first transaction is not registered he could not by getting another document cure the dafect. But as the defendant admits the advance, it is certainly open to the Court to consider whether a decree should not be passed against the defendant personally. It is true that the learned trial Judge says that the plaintiff does not want a decree against the defendant personally, but wishes to proceed against the mortgaged property only. But it is not clear that the plaintiff was given an opportunity of endeavouring to prove that he was entitled to a personal decree against the defendant if he failed to get a decree against the property. 1 think he ought to have an opportunity of doing so, and therefore, the suit should go back to the trial Court for a decision on the issue whether the Court has jurisdiction to pass a personal decree against the defendant, and if so, whether such a decree should be passed, We set aside the order dismissing the suit to that extent. The appellant must pay the costs of the appeal.

Coyajee, J.

9. I agree.


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