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1931 Supreme(Mad) 192
IN THE HIGH COURT OF MADRAS
Madhavan Nair, J.
Ranganatha Ayyangar
Versus
R. Rajagopala Ayyangar and Ors.
Decided On : 21.08.1931
The main legal point established in the judgment is that the assignment of an unpaid vendors lien along with a debt requires registration under Section 17, Clause 1(b), Registration Act if the property is worth more than Rs. 100.
Headnote:
Registration Act - Assignment of Unpaid Vendors Lien - Section 17, Clause 1(b) - T.P. Act, Section 8 - Ex. B-1 - Invalidity of Assignment
Fact of the Case:
Defendant 1 purchased a property and executed a debt-bond in favor of the vendor. The bond was assigned to the plaintiff's father. The plaintiffs sued to recover the amount due on the debt-bond from defendant 1 and the property. The appellant argued that the assignment of the unpaid vendors lien under Ex. B-1 was invalid as it was not registered under Section 17, Clause 1(b), Registration Act.
Finding of the Court:
The court found that the assignment under Ex. B-1 conveyed the unpaid vendors lien along with the debt, and as the property was worth more than Rs. 100, the assignment required registration under Section 17, Clause 1(b), Registration Act. The court held that the assignment was invalid and unenforceable against the suit property.
Issues: The main issue was whether the assignment of the unpaid vendors lien under Ex. B-1 was valid without registration under Section 17, Clause 1(b), Registration Act.
Ratio Decidendi: The court relied on the provisions of Section 17, Clause 1(b), Registration Act and T.P. Act, Section 8 to determine the validity of the assignment. It held that the unpaid vendors lien is an 'interest in immovable property' and as such, the assignment of such an interest in property worth more than Rs. 100 must be compulsorily registrable.
Final Decision: The court set aside the decree of the lower appellate Court in relation to the suit property and modified the decree accordingly, declaring the assignment under Ex. B-1 as invalid and unenforceable against the suit property.
Madhavan Nair, J.
1. Defendant 2 is the appellant. Defendant 1 purchased the suit property from one Saranadha Ayyangar under Ex. A dated 5th October 1915 for a sum of Rs. 400. Towards payment of part of the consideration namely, Rs. 200, he executed a "debt-bond," Ex. B, dated 13th October 1915, in favour of the vendor. This bond was assigned by the vendor to the plaintiffs father by Ex. B-l dated 20th October 1915. The suit property is admittedly worth more than Rs. 100 and the assignment deed, Ex. B, has not been registered. The suit out of which this second appeal arises was instituted by the plaintiffs to recover by sale of the suit land and from defendant 1 personally, the sum of Rs. 351-12-3 due on the "debt-bond" executed by defendant 1 to Saranatha Ayyangar. The contesting defendant is defendant 2. He purchased the suit property from defendant 1 under Ex. 1 dated 3rd November 1921. Reversing the decree of the District Munsif which dismissed the plaintiffs suit, the Subordinate Judge gave them a decree for the sum claimed together with interest against defendant 1 and also against the property.
2. It will be observed that under Section 55, Clause 4(b), T.P. Act, as part of the purchase-money due on the property remained unpaid by defendant 1, the vendor Saranadha Ayyangar had a charge on it in the hands of defendant 1 for the amount of this unpaid purchase-money. It is argued by the appellant that this "charge" called the unpaid vendors statutory lien has been assigned under Ex. B-l and as the assignment deed has not been registered under Section 17, Clause 1(b), Registration Act, the property being worth more than Rs. 100, the learned Subordinate Judge should have held that there has been no valid assignment of the "charge" and the plaintiffs suit should have been dismissed in so far as it asked for relief against the property. Section 17, Clause 1(b), Registration Act, makes compulsorily registrable:
instruments (other than instruments of gift) which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent of the value of one hundred rupees and upwards, to or in immovable property.
3. And by Section 49 it is declared that no instrument required by Section 17 to be registered should be received in evidence in any civil proceeding in any Court unless it had been registered. On behalf of the respondent it is argued that Ex. B-1 is a mere assignment of the simple debt due under Ex. B, that the "vendors lien" is not assigned there under and that it is a mere security which passes to the assignee under Section 8, T.P. Act, as a "legal incident of the transfer; and as such Ex. B-1 does not require registration. Section 8, T.P. Act, runs as follows:
Unless a different intention is expressed or necessarily implied a transfer of property passes forthwith to the transferee all the interests which the transferor is then capable of passing in the property and in the legal incidents thereof. Such incidents include... where the property is a debt or other actionable claim, the securities there for....
4. Before dealing with the main question of law raised by the appellant, I shall first dispose of the argument of the respondent that what was conveyed under Ex. B-l was only the simple debt due under Ex. B and that the vendors lien has not been assigned thereunder except impliedly as an incident of the transfer. The material portions of the assignment deed run as follows:
Deed of assignment executed on 20th October 1915.... I have this day assigned to you the simple debt bond for Rs. 200 executed on 13th October 1915 to me by Kuppuswami Ayyangar.... The amount including the principal and interest due thereon is Rs. 200-5-0 and I have this day received the said sum from you and have assigned to you the said debt bond. As I have, in the manner aforesaid, assigned to you all my rights in respect of the said document, I have hereby assi
