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Ram Autar Vs. Dhanauri and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad High Court
Decided On
Judge
Reported in(1886)ILR8All540
AppellantRam Autar
RespondentDhanauri and ors.
Excerpt:
mortgage - first and second mortgages--registered and unregistered documents--act iii of 1877 (registration act), section 50--fraudulent transfer--act iv of 1882 (transfer of properly act), section 53. - - 135 it seems to me that where one person takes a possessory mortgage of property with full knowledge and notice that another is already in possession of such property under an earlier instrument of a similar kind, he cannot be said to be acting in good faith (see story's equity by grigsby, section 397, and 2 white and tudor, pp......in the agra bank v. barry l.r. 7 h.l. 135 it seems to me that where one person takes a possessory mortgage of property with full knowledge and notice that another is already in possession of such property under an earlier instrument of a similar kind, he cannot be said to be acting in good faith (see story's equity by grigsby, section 397, and 2 white and tudor, pp. 45, 46), and that the principle enunciated in section 53 of the transfer of property act is applicable to such a transaction. in other words, in such a condition of circumstances, the condition of things is that qua the prior title, though created by an unregistered instrument, the status of the second mortgagee under his registered document is affected by his own mala fides; and as, on the one hand, the first mortgagee.....
Judgment:

Straight, Offg. C.J.

1. It has been found as a fact by both the lower Courts, and the appellant's pleader admits it to have been so found, that the plaintiff took his mortgage of the 20th June 1883, with notice of the defendant's possessory mortgage of the 17th January 1881. Both these instruments were for sums of money below Rs. 100, and both were optionally registrable, that of the 20th June 1883, being, in fact, registered, and that of the 17th January 1881, being unregistered.

2. The question then arises, whether the plaintiff, having taken his document of the later date with knowledge of the prior title of the defendant and of his possession, in virtue of it, of the land to which the suit relates, is entitled to enforce the provisions of Section 50 of the Registration Act, 1877? In support of the contention that he is, his pleader referred to Nallappa Goundon v. Ibram Sahib I.L.R. 5 Mad. 73; Madar Saheb v. Subbarayalu Nayudu I.L.R. 6 Mad. 88 and Kota Muthanna Chetti v. Ali Beg Sahib I.L.R. 6 Mad. 174. On the other side our attention was called to Fuzl-ud-deen Khan v. Fakir Mahomed Khan I.L.R. 5 Cal. 336; Dinonath Ghose v. Auluck Moni Dabee I.L.R. 7 Cal. 753; Narain Chunder Chuckerbutty v. Dataram Roy I.L.R. 8 Cal. 597 and Nani Bibee v. Hafiz-ul-lah I.L.R. 10 Cal. 1073 and Bhalu Roy v. Jokhu Roy I.L.R. 11 Cal. 667. Putting aside any question of equitable estoppel, such; as is so forcibly described by Lord Cairns in the Agra Bank v. Barry L.R. 7 H.L. 135 it seems to me that where one person takes a possessory mortgage of property with full knowledge and notice that another is already in possession of such property under an earlier instrument of a similar kind, he cannot be said to be acting in good faith (see Story's Equity by Grigsby, Section 397, and 2 White and Tudor, pp. 45, 46), and that the principle enunciated in Section 53 of the Transfer of Property Act is applicable to such a transaction. In other words, in such a condition of circumstances, the condition of things is that qua the prior title, though created by an unregistered instrument, the status of the second mortgagee under his registered document is affected by his own mala fides; and as, on the one hand, the first mortgagee might avoid it on the ground that it was executed in fraud of him, so, on the other, the second mortgagee cannot, on the strength of his own fraud, pray in aid the provisions of the Registration Law, to give preference to an instrument which records a transaction that in its inception, being fraudulent, was a nudum pactum. In this respect of the matter such document would not be a ' document 'in the sense of Section 50 of the Registration Act, which term, as therein used, I understand to mean a document legally enforcible, and I am confirmed in this opinion by the remarks of Sir Barnes Peacock, C.J., in Rahmat-ulla v. Sariat-ulla 1 B.L.R.F.B. 82. This being the view I take of the question raised by the second plea in appeal, the Courts below were, in my opinion, right in giving effect to the defendant's deed, and I dismiss this appeal with costs.

Mahmood, J.

3. I concur.


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