1962 (10) TMI 92 - HC - Indian Laws

Summary

Issues Involved:
1. Execution and validity of the khata (Ex. P/1).
2. Admissibility of the unregistered mortgage document.
3. Personal undertaking to pay the loan.
4. Consideration for the loan.
5. Legal implications of an unregistered mortgage.

Issue-wise Detailed Analysis:

1. Execution and Validity of the Khata (Ex. P/1):
The plaintiff alleged that the defendant borrowed Rs. 901/- and mortgaged a shop as security, delivering possession thereof. The defendant denied executing the khata and taking any loan. The trial court decreed in favor of the plaintiff, holding that Ex. P/1 was executed by the defendant and Rs. 901/- was paid at the time of execution. The District Judge upheld this finding, stating that even though the document was not admissible for creating a charge on the property, it was admissible for proving the loan.

2. Admissibility of the Unregistered Mortgage Document:
The defendant argued that Ex. P/1, being an unregistered mortgage deed, could not form the basis of the suit. The court noted that Ex. P/1 is a mortgage deed that should have been registered, as per Section 59 of the Transfer of Property Act. The document was inadmissible for creating any charge on the property due to lack of registration, as stipulated by Section 49 of the Indian Registration Act.

3. Personal Undertaking to Pay the Loan:
The defendant contended that there was no personal covenant to pay any money, making the plaintiff's suit unsustainable. The court examined whether the transaction embodied in Ex. P/1 was an usufructuary mortgage or an anomalous mortgage with a personal undertaking. The court concluded that Ex. P/1 did not contain a personal undertaking by the defendant to pay the amount of Rs. 901/-, as it merely stated that the property would not be claimed until the debt was satisfied, without implying a personal obligation to pay.

4. Consideration for the Loan:
The defendant argued that the plaintiff had not paid Rs. 901/- or any amount at the time of executing the khata, rendering Ex. P/1 without consideration. The court observed that both lower courts had given concurrent findings that Rs. 901/- was paid by the plaintiff to the defendant. However, the court noted that the lower courts had erred by relying on the unregistered document to prove the consideration. The case was remitted back to the lower appellate court to decide on the consideration based on evidence excluding Ex. P/1.

5. Legal Implications of an Unregistered Mortgage:
The court discussed that an unregistered mortgage document could not affect any immovable property comprised therein, as per Section 49 of the Indian Registration Act. However, the plaintiff was entitled to recover the loan amount as a simple debt, independent of the mortgage. The court cited precedent that a creditor could take a judgment for the debt without recourse to the security, and that every mortgage implies a loan, which implies a debt for which the borrower is personally liable.

Conclusion:
The appeal was allowed, setting aside the judgment and decree of the District Judge. The case was remitted back to the lower appellate court to decide based on evidence excluding the inadmissible document (Ex. P/1). Costs in the appeal were to abide by the result.