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Judgment
Govinda Menon, J.—The house which is the subject matter of this litigation belonged to one Kamakshi Ammal, wife of the first defendant and the mother of the minor second defendant. Under Ex. A. 2, dated 30th November 1938 Kamakshi Ammal mortgaged the same for a sum of Rs. 400 with interest thereon at the rate of Re. 1-2-0 per Rs. 100 per mensem. While matters were in that stage Kamakshi Ammal executed a power of attorney, Ex.A. 1, dated 2nd May 1944 by which she authorized the plaintiff to negotiate for the sale of the house and deliver possession of the same to any purchaser whom he finds and to discharge the mortgage debt of Rs. 400, with interest thereon as per the terms of Ex. A. 2 from and out of the sale proceeds. Nothing seems to have been done in pursuance of Ex. A. 1 for nearly two years. By an coral agreement dated 4th March 1946 the plaintiff was put in possession of the house on the understanding that he would discharge the mortgage under Ex. A. 2 and continue to remain in possession of the property and when Kamakshi Ammal paid him the amount spent by him in redeeming the mortgage, the property would be surrendered over to her. It is now found by both the lower Courts that the plaintiff discharged the, mortgage on 4th March 1946 itself and got into possession of the house. Subsequently under Ex B. 1, dated 6th May 1946 Kamakshi Ammal sold the properly to the third defendant. The present suit is for realization of Rs. 981-12-0 from defendants 1 and 2 who are the legal representatives of Kamakshi Ammal who has since died from and out of the assets of Kamakshi Ammal in their hands and for a charge over the house as against the third defend ant. Various defences were raised of which the important ones were whether the agreement alleged by the plaintiff is true or not and whether the plaintiff is entitled to a charge or any other relief on the suit properly. Both the lower Courts have found that the agreement pleaded by the plaintiff is true and they have granted a decree for the amount claimed and for costs payable from and out of the assets of Kamakshi Ammal, if any, other than the suit house in the hands of defendants 1 and 2 and dismissed the suit as against the third defendant. Hence this second appeal. The oral agreement which has been found to be true by both the lower Courts was to the effect that the house should be put in possession of the plaintiff and in view of his occupation the plaintiff should adjust a sum of Rs. 5 per month towards a portion of the agreed interest on the amount due to the plaintiff which was made up of the amount spent by the plaintiff in redeeming the mortgage and also the sum given to Kamakshi Ammal by way of loan. It was in pursuance of this agreement that the plaintiff paid a sum of Rs. 800 to the mortgagee under Ex. A. 2 on behalf of Kamakshi Ammal on 4th March 1946 and got into possession of the house.
The question for determination is whether the plaintiff is entitled to a charge on the suit house under S. 100 of the Transfer of Property Act or whether he can remain in possession of the property on the footing of a lien as agent who has spent moneys on behalf of his principal until he is reimbursed of that sum.
As regards the first question my attention has been invited by the learned Counsel for the appellant to the decision in Kuppuswami v. Rasappa 44 L.W. 438=A.I.R. 1936 Mad. 865. where Varadachariar and Mockett JJ. held that there is no express provision of law that a charge can be created only by a document and consequently a valid charge can be created orally. It was further laid down that if a charge is created by a document, such a document must be registered where the charge is for a sum in excess of Rs. 100. It may also be mentioned in this connection that the finding of both the Courts below is that the third defendant when he purchased the house under Ex. B. 1 had full notice of the oral agreement between Kamakshi Ammal and the plaintiff so that he cannot be said to be a bona fide purchaser without notice of the agreement. Such being the case if it is found that the plaintiff is entitled to a charge on the suit property or to remain in possession as the holder of lien till his money is paid the third defendant cannot claim the benefit of the rights of a bona fide purchaser. It is pointed out in the decision referred to above that because under S. 9 of the Transfer of Property Act, all transactions exclude which are not required by any ���������.."so far as may be" do not the application of the provisions of S. 59 in respect of a charge under S. 100 of the Act. Therefore when once it is found that a mortgage for Rs. 100 or upwards requires to be registered a charge for a sum equine lent to that should also be by a registered document. Under S. 3 of the Transfer of Property Act registration of a document is notice to all parties concerned and if a charge can be created only by a registered document then the provisions of S. 100 that no charge can be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge would be meaningless for the purchaser in such a case would have notice of the charge if the same is to be by a registered document. Under these circumstances the learned Subordinate Judge felt a doubt that there was no need for a provision under S. 100 that a charge cannot be enforced against a bona fide transferee for value. It is true that registration of a document is notice of the transaction regarding a property to the person acquiring such property or any part of or share or interest therein. If by agreement of parties a charge is created then under the provisions of the amended S. 100 of the Transfer of Property Act it can be done only by a registered document. But there are other ways and methods by which charges can be created. For example a charge can be created by the operation of law, by an award of the arbitrators and by various other means. In such cases the last clause of S. 100 of the Act which says that a bona fide purchaser without notice of the charge is protected would come into play. I do not think that because of the last clause of S. 100 of the Act it is possible to create a charge orally in view of the amendment of S. 100, Therefore, the decision in Viswanadhan v. Menon ILR 1938 Mad. 199=48 L.W. 952 is binding on me. The plaintiff, in my opinion, can retain the property until he is paid off the moneys expended by him for redeeming the mortgage. Under S. 221 of the Indian Contract Act in the absence of any contract to the contrary, an agent is entitled to retain goods, papers, and other property whether moveable or immoveable of the principal received by him until the amount due to himself for commission, disbursement and services in respect of the same has been paid or accounted for to him. In the present case it cannot be doubted that the plaintiff acted as the agent of Kamakshi Ammal as he was directed by her to redeem the mortgage and to recoup himself of the amount by selling the property. It is urged on behalf of the third defendant that the question of agency has not been put forward in the Court below and the trial Court was of the opinion that there was no such plea in the plaint. But Para graphs 5 and 6 of the plaint in my opinion contain sufficient averments by which the plaintiff says that he was the agent of Kamakshi Ammal for the purpose of selling her house The observations in The West of England Beak v. Batchelor 51 L.J. Ch. D. 199 can be applied to the facts of the present case. It seems to me, therefore, that the plaintiff is entitled to remain in possession of the property until he is paid the amount spent by him. The plaintiff is already in possession of the property and he is entitled to continue in possession until all the amounts due to him are paid as he cannot claim a charge on the house. In the result the second appeal fails and is dismissed but without costs. The order of the lower Courts directing the plaintiff to pay costs to third defendant is set asides but the dismissal of the suit is confirmed. No leave.