SATINDRA NATH CHOUDHURY vs JATINDRA NATH CHOUDHURY

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1935 Supreme(SC) 36

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD MACMILLAN, SIR JOHN WALLIS, AND SIR SHADI LAL.
SATINDRA NATH CHOUDHURY - Appellant
Versus
JATINDRA NATH CHOUDHURY - Respondents
On Appeal from the High Court at Calcutta.
Decided On : July 8. 1935.

Important Points

A transfer of an actionable claim including "all right, title, and interest" transfers the associated security. A registering officer's good-faith error in entering a document in the wrong register (Book IV instead of Book I) is a procedural defect that does not invalidate the registration.

Subject

Civil Law - Property and Registration Law

Act Referred

ANDHRA PRADESH RULES FRAMED UNDER REGISTRATION ACT: S.51, S.87

Headnote

(A) Transfer of Property Act, 1882 - Sections 3 and 130 - Indian Registration Act, 1908 - Sections 49, 51 and 87 - Transfer of actionable claim - Transfer of security attached to debt - Registration of document in wrong register - Validity of registration - Interest during extension of time - A debt charged upon immovable property, but not secured by mortgage, constitutes an "actionable claim" under Section 3 of the Transfer of Property Act. A transfer of "all right, title, and interest" in such a debt includes the transfer of the security (charge) attached to it.

(B) Indian Registration Act, 1908 - Section 87 - Registration of a document in Book IV instead of Book I is a defect in procedure. Where the registering officer makes such a mistake in good faith, it does not invalidate the registration or the transfer of rights, as the person presenting the document has no control over the officer's selection of the register.

(C) Interest - A debtor who seeks an extension of time to pay a decree to avoid the sale of charged property may be required to pay interest at the contract rate during the extended period. This prevents a debtor from using an unsuccessful appeal to avoid paying the agreed interest until the date of realization.

Facts of the case:
Two brothers partitioned family property, agreeing to pay their mother an annuity. A charge was created on specific properties as security for these payments. One brother defaulted, and the mother transferred her claim to the arrears and all associated rights to the other brother via a registered deed of gift. The deed was registered in the miscellaneous register (Book IV) rather than the register for non-testamentary documents relating to immovable property (Book I). The transferee sued for recovery of the debt and enforcement of the charge. The High Court upheld the transfer of security and granted an extension of time for payment, allowing interest at the contract rate for that period.

Findings of Court:
The court found that the transfer of the actionable claim included the security. The registration in the wrong book was a procedural error by the registering officer and did not invalidate the transfer. The award of contract interest during the extension of time granted by the appellate court was justified to prevent manifest injustice.

Issues: Whether the transfer of a debt included the transfer of the security charge; whether registration in Book IV instead of Book I invalidated the transfer of security; and whether the court could award contract interest during an extension of time granted to the judgment-debtor.

Ratio Decidendi: The court held that a transfer of "all right, title, and interest" in an actionable claim includes the security attached to it. Furthermore, a good-faith error by a registering officer in selecting the registration book is a "defect in procedure" under Section 87 of the Registration Act and does not nullify the document. Finally, contract interest is payable until realization, and an extension of time granted to a debtor to avoid sale does not exempt them from the agreed interest rate.

Result: Appeal dismissed with costs.

Legal Category Hierarchy

Advocates:
Solicitors for appellant :Watkins & Hunter. Solicitors for first respondent: W. W. Box & Co.

Judgement

Appeal (No. 13 of 1934) from a decree of the High Court (March 1, 1933) modifying a decree of the Subordinate Judge of the 24 Parganas (June 27, 1929).

23 Law Rep. 62 Ind. App. 265 ( 1934- 1935) Satindra Nath C houdhury V. Jatindra Nath C houdhury

124

The appellant and respondent were brothers. By a registered deed of partition dated March 18, 1921, it was agreed that the family property should be equally divided between them and that their widowed mother, in lieu of a share, should receive an annuity of Rs. 12,000 from each of the brothers, payable in instalments at agreed dates with interest at 12 per cent, per annum in default. As security for the payment, their mother was to have a charge on a named property in the share of each brother for the amount due by him with a right of recourse to his other properties, movable and immovable, if the named property was insufficient to pay the debt. The appellant made no payment, and his mother by a deed of gift dated July 22, 1922, transferred to the respondent the amount then due from the appellant with " all the right, title and interest whatever " she had in the money. The deed of transfer was registered in Book IV. under s. 51 of the Registration Act.

On June 13, 1927, the respondent instituted a suit against the appellant for the amount due with interest at 12 per cent, per annum. The Subordinate Judge held that the deed of gift was a transfer of an actionable claim that did not require registration and that it carried with it the charge on the property named in the partition deed, and he decreed the amount claimed with interest at the contract rate to the date of the decree, in default of payment within one month, the property charged to be sold. Subsequent interest was allowed at 6 per cent, and a personal decree for any deficiency given. On appeal by the judgment-debtor the High Court upheld the findings of the Subordinate Judge but substituted for the personal decree a decree for realization of any balance due from other movable or immovable property of the debtor, and on the application of the judgment-debtor, extended the time for payment, allowing interest at the contract rate for the extended period.

1935- June 3, 4, 6. De Gruyther K.C. and Pringle for the appellant. On the true construction of the deed of gift the security was not transferred. There is no express assignment of the charge and the assignment cannot be spelt out of s. 8 of the Transfer of Property Act, 1882. The widow had a charge on the property during the whole of her life. Payments may fall into arrears giving a right to enforce the charge. If the arrears are paid, there is still a charge for future payments. The selection of the method of registration is an indication of the construction the parties put on the document Jagatdhar Narain Prasad v. A. M. Brown . (( 1906) 33 C. 1133, 1153.) If the security was transferred, the document would require registration. It could not be registered in Book I. because there was no description of the property and registration in Book IV. would be ineffective. The deed would therefore be void under s. 49 of the Registration Act. [Reference was made to Parasharampant

v. Rama (( 1909) I. L. R. 34 B. 202.) ; Jambu Parshad v. Muhammad Aftab Ali Khan (( 1914) L. R. 42 I. A. 22.); Maina v. Bachchi (( 1906) I. L. R. 28 A. 655.); Dottie Karan v. Lachmi Prasad Sinha (( 1930) L. R. 58 I. A. 58.); Maung Po Kyi v. Noor Mohammad (A. I. R. ( 1933) Ran. 259.); Najibulla Mulla v. Nusir Mistri (( 1881) I. L. R. 7 C. 196.), and the Code of Civil Procedure, 1908, Order xxxiv., r. 14.] The decision in Subbalakshmi Ammal v. Narasimiah (( 1927) 52 Mad. L. J. 482.) is wrong. Sah Mukhan Lal Panday v. Sah Koondun Lall (( 1875) L. R. 2 I. A. 210.) is distinguishable. If the charge was not intended to be transferred, under the deed of partition, the only right the widow had was to proceed against the property as in a mortgage. She was not entitled to a personal decree. There is no c