A stakeholder of a kurivari entered into an agreement with the subscribers and created a charge over certain of his properties for the benefit of the subscribers, presumably to afford them some security for such of their moneys as might be in his hands. He later mortgaged the same property to the third defendant, whose rights subsequently devolved on the eleventh defendant, who is the appellant here.

The contesting respondents in this appeal are two subscribers, one of whom is the plaintiff, who sued for the return of the money subscribed by him. Some difficulty has been created in this case because of a mistake made by the registration department in recording this mortgage in Book No. IV instead of in Book No. I. Two points have been argued by the learned counsel for the appellant. The first is that on account of this mistake of the registration department it would have been impossible for him to have obtained any information, had he so applied, of this charge and that it is not therefore binding on him. The second point argued was that it is shown in the plaint itself that the old contract, including the arrangement for the creating of a charge on the land, came to an end and was replaced by another agreement entered into between the stakeholders and the subscribers whereby the subscriptions were terminated and an arrangement made for the return of the moneys due to the various subscribers.

There can be no doubt in view of the many decisions referred to in the judgment of the lower appellate Court and the cases quoted before this Court that the fact that the registration department makes a mistake in entering a charge or a mortgage in the wrong book does not invalidate the mortgage. The question, however, is whether a third party, such as the appellant, would be entitled to plead that he was not bound by it because of the mistake made. In Sateendranath Chowdhuri v. Jateendranath Chowdhuri1, their Lordships of the Privy Council had to consider the question whether despite the mistake made by the registration department the mortgage was nevertheless valid; and they held that the mistake of the registration department was a mere defect in procedure covered by section 87 of the Registration Act and that therefore the act of registration done in good faith by the registering officer would not render the registration invalid. The learned advocate for the appellant relies on an old case of this Court, Narasamma v. Subbarayudu2, in which the rights of a third party were considered; and it was held that he could not be prejudiced by the negligence of the alienee in not getting the mistake made by the registration department rectified. There is nothing in the judgment, however, to indicate whether the third party in that case applied for an encumbrance certificate or not. This decision was interpreted in a much later case of this Court, Subbalakshmi Ammal v. Narasimiah3. The learned Judges there held that the mistake ‘made by the registration department was a mere defect in procedure which did not invalidate the mortgage, They then proceeded to consider whether the decision in Narasamma v. Subbarayudu2had any bearing on the case under consideration. They held that it did not and said:

“The subsequent observations in the judgment also show that one of the main considerations which influenced them (the learned Judges in Narasamma v. Subbarayudu’) in arriving at their conclusion was the fact that in that case the property had passed to a third party for consideration and that he should not be made to suffer because the parties to the document did not take sufficient care to get the document entered in the proper book in the registration office.”

It was similarly pointed out in the Privy Council decision above referred that it was a transaction which was binding provided it did not injure innocent persons. Can it be said in the present case that the third defendant was injured or suffered by the negligence of the subscribers in not ge