Judgment

Bose, J. - This is a defendant s appeal in a suit on two mortgages. The first was executed on 7th April 1931 by the defendant and his father. The second was dated 17th December 1935 and was executed by the defendant alone. The first was for a sum of Rs. 9,500, the second for Rs. 3,500. The same property was mortgaged each time. The claim on the two deeds together was for Rs. 20,774-3-0.

2. These mortgages were in favour of one Narayan Gopal Sathe. On 28th March 1940, the mortgagee assigned them both to the plaintiff who now sues on them.

3. The defence was that both mortgages were satisfied. The main evidence on which the defendant relied to prove satisfaction was an agreement dated 17th October 1937 executed by the mortgagee Narayan Gopal Sathe in favour of the defendant. The document has been excluded from evidence by the trial Court as well as by the High Court on appeal on the ground that it required registration. If this document is excluded, then there is a concurrent finding of fact by both the Courts that the rest of the evidence is not good enough to prove satisfaction. They have disbelieved it and decreed the plaintiff s claim in full. The only questions before us are (1) whether this document required registration and (2) whether, if it did, it cannot still be used for what the defendant claims is a collateral purpose, namely proving full payment of the mortgage amount.

4. The agreement came about in this fashion. The mortgagee, Narayan Sathe, was appointed Receiver of two Cinemas in Poona. The Court appointing him required him to produce a surety in the sum of Rs. 10,000. The defendant agreed to undertake the responsibility and as a consideration for that the mortgagee executed the agreement in question. The portions of the document relevant for the present purpose are as follows. The mortgages are there described as the "transactions of give and take."

"(3) It is extremely necessary to explain beforehand the transaction of give and take outstanding between both of us.

(4) Whereas to transactions have been done between you and me.. Therefore you have agreed to stand surety ... And only for that reason I am executing this agreement and giving it to you in writing and thereunder. I am settling and formulating some new terms and I am confirming some very terms which were declared before.

(5) Although in the matter of the transaction relating to the aforesaid mortgage deeds the rate of interest mentioned in the documents purporting to be the mortgage deeds is 14 annas per mensem per centum, still the actual interest is to be received only at the rate of annas per mensem per centum, so it is settled between you and me and I have also agreed to the same. And even at the rate I have also been receiving the interest and I shall also receive hereafter...

(6) As regards the transaction of the second mortgage deed ... if as agreed at that time between you and me you pay me Rs. 1,800 in the lump then it well be understood that the transaction of give and take subsisting between you and me has been wholly completed and fully paid up. As you have no sufficiency of funds to make up and pay in full the above sum at once it is settled that you are to pay to me Rs. 80 per month and thus you are to make payment in full. In accordance with the agreement arrived at between us both subsequent to the document purporting to be the second mortgage deed the said documents and papers ... and the written receipts in respect of interest given to you by me relating to the payment in full made by you in respect of interest and principal on account of the first transaction dated 7-4-31 have been kept with me ...

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(8) As mentioned above (vide paras 5 and 6) no interest of any nature whatever has remained claimable by me from you in accordance with the agreement arrived at between us both from the date of your Suretyship onward and prior to it and in like manner I understand that the whole of the principal has been fully paid.

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(10) If