The value of the interest limited or extinguished by a subsequent agreement varying the interest rate in a mortgage deed must be of Rs.100 or upwards for the agreement to require registration under Section 17(1)(b) of the Registration Act.

JUDGMENT:- Though the value involved in this second appeal is a very small one, yet it raises an interesting question of law. Defendants 1 and 2 in O.S.441 of 1965 on the file of the Court of the District Munsif, Arni, who failed before the trial Court as well as the first appellate Court are the appellants before this Court. The admitted facts are as follows:

2. The first appellant herein was having some dealings in javuli with the respondent herein. In the course of such dealings, a sum of Rs.700 was due by the first appellant to the respondent herein. In view of the fact that the amount was standing unsecured, the respondent wanted to have the same secured, under a mortgage, but the subject-matter of the mortgage belonged to both the appellants. Consequently, on 1-11-1955, the parties entered into an arrangement consisting of execution of a mortgage deed by the appellants herein in favour of the respondent herein, as evidenced by Ex.A-1 and execution of a counter-part varthamanam letter by the respondent herein in favour of the appellants, herein, as evidenced by Ex.B-1. On that date, the respondent, in addition to the sum of Rs.700 already due by the first appellant to him, paid a sum of Rs.300 to both the appellants and for the mortgage deed Ex.A-1 executed by the appellants for a sum of Rs.1000 payable with interest at 6 per cent per annum. Under Ex.B-1, the respondent informed the appellants that though the mortgage deed mentioned that interest at 6 per cent per annum was payable on the principal amount of Rs.1000 since the major portion of the principal amount formed part of the balance due on dealings between the parties, he would not claim any interest and the mortgage would stand discharged if the principal sum of Rs.1000 was paid by the appellants to the respondent herein. The mortgage deed, Ex.A-1, though dated 1-114955, was registered only on 25-11-1955. Subsequently the appellants herein transferred their interest in the mortgaged property in favour of defendants 3 to 5, imposing an obligation on them to discharge the mortgage. Thereafter, the present suit was instituted by the respondent herein, for recovery of a sum of Rs.1597-50 from the appellants as well as defendants 3 to 5, the said amount consisting of the principal amount of Rs.1000 and interest of Rs.597-50 from 1-11-1955 onwards. On 4-1-1966, the respondent made an endorsement that a sum of Rs.1000 was paid to him out of Court by defendants 3 to 5. The appellants herein in their written statement admitted the execution of the mortgage deed, Ex.A-1, but contended that in view of the understanding between the parties, as evidenced by Ex.B-1, no interest was payable and even before the institution of the suit, as soon as notice was received from the respondent herein, the appellants had intimated defendants 3 to 5 to pay the principal amount of Rs.1000 immediately to the respondent herein. Since the principal amount of Rs.1000 was received by the plaintiff (respondent herein) the only question that had to be considered by the learned District Munsif was whether the respondent was entitled to any interest as provided for in Ex.A-1. He came to the conclusion that since Ex.B-1 was not registered, it could not prevail against the registered document Ex.A-1 and therefore the respondent was entitled to interest, with the result on 27-7-1966, he decreed the suit for Rs.597-50. With regard to costs, he came to the conclusion that having regard to the fact that the principal amount had been paid, it was a fit case in which the respondent-plaintiff could be awarded half costs and accordingly awarded half costs. As against this judgment and decree of the learned District Munsif, the appellants herein preferred an appeal to the learned District Judge of North Arcot at Vellore. The learned District Judge on 13-7-1967, dismissed the appeal, A.S.341 of 1966 agreeing with the conclusion of the learned District Munsif. There was cross-objection by the respondent