Judgement

Appeal from a judgment and decree of the High Court (November 28, 1917) reversing a decree of the temporary Subordinate Judge of Ramnad.

The suit was instituted by the respondents against the appellants to recover the sum of Rs. 23,576 under a written agreement dated March 14, 1907. The material terms of the agreement, and the circumstances in which it was entered into, appear from the judgment of their Lordships.

The Subordinate Judge held that the agreement was supported by consideration, but that it was inadmissible and invalid for want of registration. Upon appeal to the High Court the decree of the Subordinate Judge was set aside and the suit remanded for trial. The Chief Justice was of opinion that the agreement was only intended to operate upon sums realized as they were realized, and that it did

Law. Rep. 47 Ind. App. 188 ( 1919- 1920)

Vyravan C hetti V. Subramanian C hetti 54

not affect the rights of the parties against the mortgaged property. In his view therefore it did not require registration under s. 17 of the Indian Registration Act. Sadasiva Aiyer J. was of opinion that the agreement purported to extinguish the appellants priority of security over the immovable property mortgaged and that it therefore was required to be registered by s. 17. He held however that as the prayers of the plaint did not seek to affect any immovable property, s. 49 of the Act did not prevent the agreement from being admissible in evidence in the suit. He based his view upon the Full Bench decision in Pulaka Veetil v. Thiruthipalli. (( 1909) I. L. R. 32 M. 410.)

1920. April 26. De Gruyther K.C. and Dube for the appellants.

Sir Erle Richards K.C. and Kenworthy Brown for the respondents.

The judgment of their Lordships was delivered by

LORD BUCKMASTER. Their Lordships think it unnecessary to trouble counsel for the respondents in this case.

The appellants are the first mortgagees of certain property. The respondents hold a second mortgage upon the same estates. It is unnecessary to determine the circumstances under which those mortgages arose, or the history of the title of the mortgagor. It is sufficient to say that on March 14, 1907, an agreement was entered into between the first mortgagees and the second mortgagees which has given rise to the present dispute. The effect of that agreement was to put the first and the second incumbrances on a relative position of equality with regard to the security. The appellants having realized part of the estate, the respondents instituted the proceedings out of which this appeal has arisen for the purpose of obtaining their share of the proceeds to which they claimed to be entitled by virtue of the agreement. The answer that was raised was, first, that the agreement required registration, and not having been registered could not be given in evidence ; and, secondly, that in any circumstances no consideration had been given by which the agreement could be supported. With regard to the question of consideration it is sufficient to say that the learned judge before whom the case was first heard found that there was consideration from the fact that contemporaneously with the execution of this agreement there had been an arrangement made by which the defendants had profited by loans that the plaintiffs had made to the extent of Rs. 42,000, and the question was not further raised in the High Court. The point therefore is not open to the appellants ; but if it were, their Lordships think there was abundant evidence to support the conclusion of the Subordinate Judge.

The real question, therefore, which now arises is whether or no the agreement of March 14, 1907, required to be registered for the purpose of enabling it to be given in evidence upon these proceedings. That depends entirely upon the consideration of clause 3 of the agreement. Clause 3 of the agreement, after referring to the total amount of rupees that is owing to both the mortgagees and stating that interest is due to the first and s