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1914 Supreme(SC) 74
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD DUNEDIN, LORD SHAW OF DUNFERMLINE, SIR JOHN EDGE, AND MR. AMEER ALI.
MAHOMED MUSA - Appellant
Versus
AGHORE KUMAR GANGULI - Respondents
On Appeal from the High Court in Bengal.
Decided On : Oct. 22, 23; Nov. 25, 1914
Solicitors for appellants :. T. L. Wilson & Co. Solicitors for respondents: Burton, Yeates & Hart.
The equity of redemption is extinguished when parties act upon a compromise agreement to divide property, even if the agreement is formally defective or unregistered, provided their conduct constitutes part performance (rei interventus) that cures such defects.
Headnote:(A) Registration Act, 1871 - Sections 17 and 18 - Indian Evidence Act, 1872 - Section 92 - Transfer of Property Act, 1882 - Redemption of mortgages - Extinction of equity of redemption - Effect of unregistered compromise agreement - Where a compromise agreement to divide property and extinguish mortgage debts is not registered and no formal conveyance is executed, but the parties and their successors act upon the agreement for several decades, the right to redeem is extinguished. (Paras 15-20)
(B) Part performance - Rei interventus - Where the conduct of parties is founded on an incomplete engagement and is unequivocally referable to the agreement, such actings supply formal defects and exclude the plea of locus paenitentiae. (Paras 21-23)
(C) Equity - Parol contracts concerning land - A defendant is charged upon the equities resulting from acts done in execution of a contract, and the contract will be binding in equity if it is confessed or in part carried into execution. (Paras 24-25)
Facts of the case:
The appellants sought to redeem two mortgages. A compromise agreement had been reached between the mortgagor and mortgagees to divide the property into specific shares, with the mortgage debts being extinguished. Although the agreement was not registered and no formal deeds of transfer were executed, the parties and their successors managed the property based on this division for over thirty years, including executing subsequent mortgages and gifts based on the allotted shares.
Findings of Court:
The right to redeem the mortgages was extinguished. The court found that the long-term conduct of the parties in acting upon the compromise agreement cured any formal defects in the agreement or the subsequent court decree.
Issues: Whether the right to redeem mortgages is extinguished by an unregistered compromise agreement when the parties have consistently acted upon its terms for a prolonged period.
Ratio Decidendi: The court held that the principle of rei interventus applies where parties act upon an incomplete or defective agreement. Such conduct, being unequivocally referable to the agreement and productive of a change in circumstances, prevents a party from resiling from the obligation. In equity, a parol contract for land that is part-performed is binding on the parties.
Result: Appeal dismissed with costs.
Legal Category Hierarchy
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property law
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mortgages
- equity of redemption
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transfer of property
- part performance
- registration
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mortgages
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equity
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doctrines
- rei interventus
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doctrines
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practice and procedure
-
evidence
- parol evidence
-
evidence
Judgement
Appeal from a judgment and decree of the High Court (June 16, 1909) reversing a judgment and decree of the second Additional Subordinate Judge of the 24 Parganas.
The suit was instituted by the appellants to redeem two mortgages of 1848 and 1871.
In 1848 one Fazlul Karim mortgaged his zamindari and in 1850 conveyed it to Khodajanessa, his wife, as a gift. In 1853 she granted a patni lease of it under which there was a malikana amounting to over Rs.15,000 a year. After various immaterial proceedings, in 1870 an agreement was made between Khodajanessa and the then mortgagees by which the amount due upon the mortgage was to be discharged by annual payments out of the malikana.
In 1871 Khodajanessa executed a second mortgage upon the property in favour of a different mortgagee.
In 1873 the mortgagees under the mortgage of 1848 commenced a suit against Khodajanessa to enforce the agreement of 1871, A compromise was agreed to by the parties and a razinama drawn up.
Under the terms of the razinama the amounts due to both mortgagees was agreed and the mortgagees agreed to release the property from the mortgages upon Khodajanessa agreeing to execute deeds of absolute sale or transfer by which a certain proportion of the malikana should be transferred to each of the mortgagees, the balance to remain her property, free from incumbrances. It was also agreed that the mortgagees should get their names registered as proprietors of the proportions of the property to which they were entitled under this arrangement. The compromise was filed, and on November 28, 1873, a decree was made that the suit be decided in pursuance thereof. The terms of the compromise were not recited in the decree.
The compromise agreement was not registered and no transfers or conveyances were ever executed. It appeared, however, that all parties had given complete effect to its terms. Numerous transactions had taken place by the various parties on the basis of the property having been divided in the manner provided by the compromise. As instances of this, in 1875 Khodajanessa mortgaged the share reserved to her, the mortgage deed reciting the arrangement made by the compromise; again, in 1887, she made a deed of gift of that share, the deed of gift being attested by her sons. There had also been transfers of the interests of the mortgagees. In 1878 the respective mortgagees had caused their names to be registered as proprietors of their shares, and there had been registration of mutation of names in respect of subsequent transfers by them.
In 1908 the plaintiffs, as surviving heirs ar I representatives of Khodajanessa, instituted the present suit claiming to redeem the mortgages.
The defendants (respondents) pleaded that the suit was barred by limitation, that under the compromise of 1873 the mortgages had come to an end, and that the respective mortgagees had been in possession of their shares adversely to Khodajanessa and the plaintiffs. The Subordinate Judge made a decree for redemption. He held that the terms of the razinama not being incorporated in the decree and not being registered or stamped could not affect immovable property. He also held that the possession was not adverse.
The High Court allowed the appeal. The learned judges held that the mortgages of 1848 and 1871 were extinguished by the agreement and compromise of 1873 and that the right to redeem thereupon ceased to exist. It was accordingly not necessary to consider the question of limitation.
De Gruyther, K.C., and Dube, for the appellants. The original title of the respondents was as mortgagees, and the onus is upon them to show that the right to redeem is extinguished. The compromise agreement of 1873 was required to be registered by the Registration Act, 1871 , s. 17, and not being registered under that Act it was not effectual to transfer any right in the property Pranal Annee v. Lakshmi Annee. (( 1890) L. R. 26 Ind. Ap. 101.) The decree did not embody the terms of the compromise, and
