An unregistered mortgage deed is admissible in evidence to prove the personal liability of the mortgagor if the mortgage is not operative as a mortgage.

Mahajan, J.

1. This second appeal arises out of a suit filed by the plaintiff for recovery of Rs. 816/- on account of principal and interest on the basis of a document held to be inadmissible. The trial Court decreed the suit holding that the document could be looked into for a collateral purpose, namely, to decree the plaintiffs claim on the basis of the personal liabilities of the defendant. The lower appellate Court has taken a contrary view. It is against this decision that the present second appeal has been preferred. The document in question reads thus :-

"This is to declare that I, Gulzara Singh son of Dharman, caste Jat resident of Nurpur, Tehsil and District Ludhiana, have received Rs. 600/- (Rupees six hundred only) double of Rs. 300/- (Rupees three hundred only) for purchase of a buffalo from Sucha Singh son of Kishan Singh, caste Jat, resident of Nurpur Tehsil and District Ludhiana, and mortgaged two plots of land, bearing (Khasra) No. 3519/102 measuring 0-12-2 (Khasra) No. 1027 measuring 0-7-2 total area whereof comes to 0-19-6 of Nehri Chahi kind with turn of well and canal. I have made over the possession of the land. I will get the entry made orally by the Patwari and will get the mutation sanctioned by the Tehsildar Sahib. Hence I have executed this receipt (mortgage deed?) so that it may serve as an authority.

Note : - I have (also ?) executed a receipt No. 273 for Rs. 600/- which is quite correct"

The contention of the learned counsel for the appellant is that though the document purports to be a usufructuary mortgage with possession, the possession was not delivered and therefore, under Section 68(d) of the Transfer of Property Act, the personal liability of the mortgagor to return the mortgage money arose, and as such the document is admissible under Section 49 of the Registration Act. He relies on a Single Bench decision of the Lahore High Court in Wadhawa Singh v. Kunj Lal, A.I.R. 1938 Lah. 497, wherein Tek Chand, J., observed as under :-

"If, however, Exhibit P.1 is the document embodying the terms of the

mortgage a claim for refund of the amount advanced, if the mortgage transaction implied a personal liability of the mortgagor to repay the amount. This would depend on the nature and terms of the mortgage. If for instance the transaction was one of a simple mortgage or an English mortgage, it would necessarily imply a personal covenant to repay, and the unregistered deed evidencing the mortgage would be admissible for a collateral purpose of enforcing the personal convenant. If however the mortgage is `usufructuary or is one by way of conditional sale, and the mortgagee has taken posssession of the property, the mortgagor does not in the absence of an express or implied stipulation to the contrary, incur any personal liability."

It is significant that the learned Judge pertinently pointed out that in order to effectuate the usufructuary mortgage the mortgagee must have taken the possession of the property mortgaged. A similar matter came up before a Privy Council in case Ram Narain Singh v. Adhindra Nath Mukherji, I.L.R. 44 Cal. 588, and their Lordships of the Privy Council at Page 402, observed as under :-

"Their Lordships, after hearing the respondents, see no reason to differ from the conclusion arrived at upon the first hearing of this appeal, to the effect that the nature and terms of the deed of the 14th April, 1896, are such as to show that it was not originally intended that the mortgagor should be personally liable. They think, however, that the respondents ought to be given an opportunity of proving the allegations of paragraphs 6 and 7 of their plaint, and of establishing that those facts are sufficient to bring the 68th Section of the Transfer of Property Act into operation. It is to be observed that the position of the mortgagor under this section cannot, by reason of non-attestation of the deed, be better than it would have been if the mortgage had been duly attested."

In Pars Ram