1. The respondent sued the appellant for a settlement of the accounts of the profits, income and expenditure of the Sri Krishna Talkies, Guntur, in which he claimed a three-annas share. The defendant's answer to the plaintiff's claim was that the plaintiff had owed her a sum of Rs. 750, for which and interest she had filed a suit for Rs. 929-8-0, asking for a charge on the three-annas share of the plaintiff for the suit amount. The suit resulted in a compromise, according to which the defendant was to be given a charge on the three-annas share until the 31st July, 1940. If, by that date the plaintiff had paid Rs. 600, it would be accepted in full satisfaction of the decree against him. If he did not, then the plaintiff's three-annas share in the suit property would become extinguished and the defendant in full satisfaction of the suit claim would take the three-annas share. The learned District Munsiff held that since the plaintiff had not paid the Rs. 600 within the stipulated date in accordance with the terms of the decree, the defendant was entitled to the suit property, the plaintiff's right in the suit property having become extinguished. He therefore dismissed the suit on the ground that there was no subsisting cause of action.
2. It was objected by the plaintiff that since the compromise had not been' registered, the defendant had obtained no right under the decree. Relying on. Seetharamacharyulu v. Venkata Subbamma A.I.R. 1940 Mad. 824, the learned District Munsiff held that under Sub-section (2), Clause (vi) of Section 17 of the Registration Act, registration was not necessary, since the property concerned in the compromise had been the subject-matter of the suit. The learned Subordinate Judge on appeal did not discuss the effect of Clause (vi) of Sub-clause (2) of Section 17 of the Registration Act, but said:
That under the terms of the compromise the charge becomes a transfer of immoveable property which requires registration under Section 17 of the Act and therefore the decree becomes inadmissible under Section 49 of the Registration Act. The rights under the decree can only be implemented through a Court of law or by virtue of a private arrangement....It must be recognised by a proper application within three months from the date thereof....We do not know whether this concern was run together or separately or whether there is any show or not or whether any amounts were collected and profits have to be paid. So all these things have to be considered by the learned District Munsiff having regard to the observations above and the law on the subject. If necessary the issues will have to be recast. The parties may be given opportunity to adduce oral and documentary evidence....
The learned Subordinate Judge thereupon remanded the suit for fresh disposal.
3. The appeal was improperly disposed of. The judgment of the learned Subordinate Judge was a reversing one; and he should have discussed fully various points raised by the learned District Munsiff. He did not, as already stated, refer at all to Sub-section (2), Clause (vi) of Section 17; and if the learned District Munsiff's interpretation of that clause was correct, then there was no need to consider all the other matters referred to in the above quoted passage.
4. It is true that the plaint in the suit is not available; but the preamble to the decree shows that the suit was one in which a charge on the property was prayed for; and during the course of the proceedings in the trial Court the parties admitted that that was so. Under the decree the whole of the plaintiff's interest in the business become extinguished and passed to the defendant if Rs. 600 was not paid within the specified period, whereas only a charge was asked for in the plant; but the immoveable property which was the subject-matter of the compromise decree was also the subject-matter of the suit; and so Section 17, Sub-clause (2), Clause (vi) has a direct application to the facts of this case. The learned District Munsiff was therefore right in holding that the plaintiff's interest in the property had become extinguished and that no suit lay.
5. The appeal is allowed with costs in this Court and in the lower appellate Court and the decree of the District Munsiff restored.