DOTTIE KARAN vs LACHMI PRASAD SINHA

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1930 Supreme(SC) 87

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BLANESBURGH, LORD MACMILLAN, SIR LANCELOT SANDERSON, AND SIR GEORGE LOWNDES.
DOTTIE KARAN - Appellant
Versus
LACHMI PRASAD SINHA - Respondents
On Appeal from the High Court at Patna.
Decided On : Dec. 16. 1930.

Important Points

A mortgage is invalid if not registered per the Indian Registration Act. An unauthorized alteration to a power of attorney results in a lack of jurisdiction for the registering officer, which cannot be cured by "good faith" protections or the principle of estoppel.

Subject

Property Law - Mortgage and Registration

Act Referred

ANDHRA PRADESH RULES FRAMED UNDER REGISTRATION ACT: S.32(c), S.87

Headnote

(A) Transfer of Property Act, 1882 - Section 59; Indian Registration Act, 1908 - Sections 17(1)(6), 32, 33(1)(a), 34(3)(c), and 87 - Mortgage for principal sum of Rs. 100 or upwards - Requirement of registered instrument - Presentation by agent - Validity of registration based on altered power of attorney - If a power of attorney is authenticated on a date prior to the mortgage deed it purports to authorize, and the date within the power of attorney is subsequently altered without the consent of the executants, such document does not constitute valid authority for registration - The registering officer in such a case lacks jurisdiction to accept the document for registration.

(B) Indian Registration Act, 1908 - Section 87 - Protection of registering officers - The provision that nothing done in good faith shall be deemed invalid by reason of defect in appointment or procedure does not apply where there is a complete want of jurisdiction in the registering officer.

(C) Estoppel - Compliance with statutory law - The principle of estoppel cannot be invoked to cure a failure to comply with the express mandatory provisions of the Registration Act regarding the valid registration of a mortgage.

Facts of the case:
A suit was brought to enforce a mortgage. The mortgage deed was presented for registration by an agent who produced a special power of attorney. The special power of attorney was authenticated by a sub-registrar in February, yet it referred to a mortgage deed dated October of the same year. It was established that the date in the special power of attorney had been altered from February to October after authentication, and this alteration was made without the consent or authority of the executants.

Findings of Court:
The court found that the special power of attorney was not a valid authority for the agent to present the mortgage dated October 4 for registration. Consequently, the registering officer had no jurisdiction to accept the mortgage for registration. The mortgage was not a registered instrument and therefore no mortgage was effectively created.

Issues: Whether the mortgage was duly registered under the Indian Registration Act, 1908, and whether any estoppel arose which could cure the defect in registration.

Ratio Decidendi: The court reasoned that since the power of attorney was authenticated before the date of the mortgage it purported to authorize, and the alteration of the date was unauthorized, the registration was invalid. A lack of jurisdiction cannot be cured by the "good faith" clause of the Registration Act, nor can mandatory statutory registration requirements be bypassed by the principle of estoppel.

Result: Appeal allowed.

Legal Category Hierarchy

Advocates:
Solicitor for appellants : H. S. L. Polak.
Solicitors for respondent No. 1: Douglas Grant & Dold.

Judgement

Appeal (No. 92 of 1928) from a decree of the High Court (August 9, 1927) reversing a decree of the Subordinate Judge of Monghyr (December 20, 1923).

The respondents brought a suit against defendants represented by the appellants to enforce a mortgage dated October 4, 1910.

The question arising upon the appeal was whether the mortgage was duly registered under the Indian Registration Act, 1908, and if not whether any estoppel arose which cured that defect.

The High Court (Das and Kulwant Sahay JJ.), reversing the trial judge decreed the suit.

The facts of the case, the material statutory provisions, and the grounds of the decisions appear from the judgment of the Judicial Committee.

1930. Nov. 25. Dube for the appellants. Subba Bow for respondent No. 1.

Dec. 16. The judgment of their Lordships was delivered by

SIR LANCELOT SANDERSON. This is an appeal against a judgment and decree dated August 9, 1927, of the High Court of Judicature at Patna, setting aside a judgment and decree dated December 20, 1923, of the Court of the Subordinate Judge of Monghyr.

The suit was brought on September 12, 1922, by Lachmi Prasad Sinha and his co-plaintiffs, who are members of a Hindu joint family, against Christiana Benshaw and her daughter, Dottie Karan, claiming to recover Rs.21,770-6-3 in respect of principal and interest alleged to be due on a mortgage dated October 4, 1910, and to enforce the said mortgage by sale of the mortgaged property. The Subordinate Judge dismissed the plaintiffs suit with costs.

The plaintiffs appealed to the High Court, which allowed the appeal and made a decree for sale of the mortgaged property in favour of the plaintiffs. Christiana Benshaw died while the appeal was pending in the High Court, and her husband, Samuel Benshaw, and his daughter, Mercia Benshaw, were added as legal representatives of the said Christiana Benshaw.

Dottie Karan, Mercia Benshaw and Samuel Benshaw have appealed against the decision of the High Court to His Majesty in Council.

Christiana Benshaw first married Rai Bahadur Duraj Karan, an Indian Christian. . By him she had a daughter, Dottie Karan, who is the first appellant, and a son, David Karan, who died before this litigation began. After the death of her first husband, Christiana married the above mentioned Samuel Benshaw, by whom she had a daughter, the above mentioned Mercia Benshaw. These two persons are the other appellants. Rai Bahadur Dhiraj Karan died on December 13, 1895, leaving him surviving his widow,. Christiana, his son, David, and his daughter, Dottie.

The plaintiffs case was that after her marriage to Samuel Benshaw, Christiana appointed him her agent, and gave him a general power of attorney, dated April 6, 1898, that on or about May 6, 1909, Christiana Benshaw borrowed Rs.500 from Lachmi Prasad Sinha on a note of hand ; that as she required a further advance she arranged with Lachmi Prasad Sinha through her husband and agent, Samuel Benshaw, that he should advance a further sum of Rs.2500, and that her first husbands share in Mahal Kamarpar should be mortgaged by her and her two children, David and Dottie Karan, as security for the two sums of Rs.2500 and Rs.500, making a total of Rs.3000 and interest thereon.

It was alleged on behalf of the plaintiffs that on October 4, 1910, Christiana Benshaw, Dottie Karan and David Karan executed a mortgage deed in favour of Lachmi Prasad Sinha at Monghyr in the presence of attesting witnesses, and that at that time the sum of Rs.2500 was paid by him to Christiana Benshaw. It was alleged that the month of February had been inserted as the date at the end of the mortgage deed, and that at the time of execution the word 11 February" was crossed or blotted out, and the date October 4, 1910, was inserted. This was done, it was alleged, with the consent of the executants and the alteration was initialled by Samuel Benshaw.

There is no doubt that a date in the mortgage has been crossed out, and it was alleged on behalf of the