AI Structured Summary
Not yet generated for this judgment
Judgment
Coutts Trotter, J.—This is an appeal by the plaintiffs from the Judgment of the Subordinate Judge of Bezwada dismissing their suit and
refusing them the reliefs they asked. The facts out of which the suit arose are these: - The plaintiffs are the proprietors of an estate known as
Gundepalli estate which was apparently of considerable extent, and in the year 1911 they were extremely hard pressed for money. Their lands
were mortgaged to the extent of something like two lakhs and they were indebted to sundry personal creditors in sums which amounted more or
less to another lakh; and they were naturally anxious to borrow money in order to discharge those liabilities and disencumber their lands. Sometime
in the early part of 1911 they seem to have got in touch with the defendants who are so wears in Madras. Various proposals were made first by
sale and then by mortgage for a comparatively modest loan of Rs. 15,000, and then as the negotiations developed, it became obvious that so
modest a sum could afford no substantial relief to the embarrassments of the plaintiffs and thereupon a proposition was set on foot, of the
defendants finding a lender of three lakhs of rupees for which the defendants were to receive a commission. The original figure seems to have been
fixed at 4 par cent. The negotiation went on. The plaintiffs were continually pressing for news as to whether the loan had been arranged and the
defendants were constantly holding out hopes that a loan would very soon be arranged, and so matters went on until, the 11th of September 1911.
In that month the plaintiffs leased to the defendants a considerable piece of property out of their Kamatam lands at a rental Rs. 500 per annum. On
the same date, according lo the plaintiffs'' case, they were given by the defendants a document, which is Ex. S in the case, of which the important
clause is the last which is in these terms. ""If the said loan (that is, the loan of three lakhs to which I have alluded, could not be given to you for any
reason, I shall have the said patta and muchilika (that is the lease of even date to which I have referred) cancelled and execute a deed of release in
your favour."" That was signed by the 2nd defendant. It is not disputed that he had authority to bind his co-defendant. Now the plaintiffs'' case is
this: that the lands comprised in the patta yielded a revenue very greatly in excess of the Rs. 500 rental to be paid by the defendants, and that the
difference between the rent they were paying and the realizable rent, which they put at Rs. 1,500 and which the learned Judge accepts as worth at
least Rs. 1,200, was to be in lieu of the commission which would otherwise have been payable to the defendants on finding the desired lender.
Now in fact the lender was never found. The defendants suggested that one of them had a wealthy father-in-law who was on the verge of lending
money. Whether that be so or not it is impossible now to say. Having regard to the fact that hopes were held out to the plaintiffs'' who it is obvious
from the correspondence, were very helpless and unbusinesslike people, that the loan would be given at a rate not more than 4 per cent, per
annum, I think it extremely questionable whether the whole of the defendants'' story as to the readiness of the father-in-law to come forward was
not a mere bait to induce the plaintiffs to do that which they did. In fact, as I have said the loan was never made, so that the plaintiffs got nothing
and the defendants were of course never in ''a position to earn their commission. The case of the plaintiffs'' is based upon Ex. S They ask that, as
the loan has never been granted to them, the Court should relieve them by ordering the defendants to carry out their covenant in Ex. S and execute
a deed of cancellation of the lease and a deed of surrender to the plaintiffs. The defendants'' case raises two issues, one of fact and one of law. The
issue of fact is as to the genuineness of Ex. S which the defendants ask us to believe was a forgery. It is conceded, and we think it is manifest to the
eye, that if the signature to Ex. S is a forgery it is an extremely good one. Its likeness to the admitted signatures of the 2nd defendant is extremely
striking, so much that the learned Judge in stigmatising this document as a forgery does not suggest that the signature is forged, but makes the
suggestion, which as far as I can see was never suggested in the cross-examination and of which there is nothing even in outline, in the evidence-in-
chief for the defence that it is not unlikely that the 2nd defendant may have given one of the witnesses for the plaintiffs a blank paper with his
signature, in connection with certain criminal proceedings that were then in the air. All I can say is that that seems to me a wholly gratuitous
suggestion and one which a court of law ought not to indulge in for the purpose of branding litigants with the inculpation of a criminal forgery. The
person upon whom this stigma is personally cast, the 5th witness for the plaintiffs, was never asked a single question about it in the cross-
examination, nor was any question put to the 1st plaintiff who went into the box imputing complicity in arty such scheme. I think that it would be
acting contrary to judicial principle to hold Ex. S on the materials before us to, be a forged document. The probabilities seem to me to be all
against its being a forged document. If it were, then-we must suppose that the plaintiffs handed over these valuable lands to the defendants without
a farthing worth of security that they would get anything whatever in return for them. It is quite true, as Mr. Rangachari said, that they were in bad
case. It is quite'' true they ware unbusinesslike people; and it is quite possible that the defendants were ready to take any possible advantage of
them that they could. But at the, same time I cannot bring myself to believe that they went so far as to give away the whole of the lands that were
the recompense of the defendants without a saving clause to ensure that they got something in return for what they gave, It is said that the letters
contain no reference to this agreement Ex. S either before or after the 11th September. I have perused those letters, and it is quite true that they do
not refer to this agreement, But they bear the stamp of being written by men hard pressed for money solely anxious to beseech the defendants to
try and get a loan and extricate them but of the mire into, which they had fallen. I hold that Ex. S was a genunine document and represented a
genuine -transaction.
Then Mr. Rangachari says, even if it be so, it is in law void and of no effect, because he says the lease is a registered document and it cannot
have its effect varied or altered by an unregistered document which Ex. S admittedly is; and he relies for that proposition upon various portions of
Section 17 of the Registration Act. He says that the effect of Ex. S is to limit or extinguish a right title or interest in immovable property of the value
of Rs. 100, that is Sub-section (b) of Section 17. He further says that if it does not fall within that, it falls within Sub-section (c) of the same section
as being an instrument acknowledging the receipt of consideration on account of the declaration or extinction of such right or interest in immovable
property. The plaintiff''s case is that the apt clause of the section is Sub-section V of Clause (2) of Section 17 which exempts from the necessity of
registration a document which does not itself create or extinguish any right suck as I have described in immovable property but merely creates right
to obtain another document which will when executed create or extinguish such right. He also relies on Section 92 of the Evidence Act, and says
that Ex. S is a violation, of the rule there laid down, that the lease is a document which, contains all the terms of the contract, and that Ex. S falls
within, the mischief of that section, because it is called in evidence for the purpose of adding to or subtracting from it does not matter which way it
is, put - the terms of the lease. He cited a great many authorities to the effect that an unregistered document is not admissible in evidence, which
qualifies the effect of a registered document or adds to or varies its terms. With-that proposition, I am in complete accord. The only point where I
differ is that I do not think that any of these cases apply, because I do not think the present case can properly be put in any way as a violation of
the principle laid down either in the Registration Act or Section 92 of the Evidence Act. In my opinion Ex. S though no doubt in the widest sense
part of the same transaction as the lease and indeed the word that I am going to apply, namely ''collateral'' implies in itself that it sub-serves in some
part the same purpose, though'' as I say it forms a part of the larger transaction of which the lease forms another part, is in my opinion wholly
independent of the lease or of any of its terms. For that view of the document, I rely upon two decisions, one a decision of the Privy Council
Subramaniam Chettiar v. Arunachallam Chettiar ILR (1902) M. 603, and the other known case of De Lassalle v. Guildford (1901) 2 K.B. 215 .
Mr. Rangachariar pointed out that De Lassalle v. Guildford (1901) 2 K.B. 215, was not a suit for specific performance but an action sounding in
damages for breach of contract. That seems to me in no way to detract from its authority as to when in contemplation of law one document will be
held to be a variance or derogation of another, and when it will be held to be embodying a collateral and distinct agreement. In my Judgment Ex. S
is entirely collateral to the lease and was a document within the very terms Of Sub-section V, Clause (2) of Section 17 of the Registration Act,
namely a document which does not itself create or extinguish a right in immovable property, but a document which gives the right to obtain another
document which, and which only, will have that effect If the words of Ex. S are examined, they seem to me quite incapable of any other
construction. The words used are ""I shall have the said patta and muchilika cancelled and execute a deed of release in your favour."" That is the
only operative portion of the document and how anybody can contend that the moment it was found that the loan could not be given, these
documents became ipso facto void and of no effect I cannot conceive. If they were void and of no effect there was not the slightest reason for the
patta and muchilika being cancelled by the defendants, and still less is there any need for a deed of release in favour of the plaintiffs. In my opinion
this contention of the respondents is quite untenable, and I therefore hold that Ex. S is not a document requiring registration, and since it is only
collateral to the lease, I think it is outside the operation of Section 92 of the Evidence Act, whether it be regarded as itself the contract, or as
evidence of an oral agreement to the same effect.
The result is that Ex. S being an enforceable contract, the plaintiffs are entitled to the relief claimed. It is said that the plaint does not properly
frame the relief to which the plaintiffs on the construction this Court has adopted, are in la v entitled. I think that is very likely right. I think the
exactly appropriate relief, was not asked for, although the second head of relief claimed comes very near it inasmuch as the plaintiffs ask for
cancellation of the patta and delivery of it to them. That is at any rate an appropriate statement of a portion of the relief they are entitled to. But
even if I thought that the plaint wholly failed to ask in apt terms of art that which the plaintiffs are entitled to, that would not be the slightest obstacle
to doing them Justice in the case, because it is perfectly obvious that the defendants knew absolutely clearly what it was that was in issue between
them and the plaintiffs, and what the plaintiffs wanted; and the precise way in which it is framed is after all a mere question of words.
The result will be that the Judgment of the Lower Court will be reversed and the defendants will be ordered to cancel and deliver up the patta
and muchilika and to execute a deed of release in favour of the plaintiffs. But they cannot of course obtain specific relief without putting the other
parties in the position they were in before the transaction in question. The evidence of the defendants is that at the request of the plaintiffs they paid
them two years'' rent namely Rs. 1,000 in advance, and they got a receipt for the Rs. 1,000. The plaintiffs do not attempt to deny that they gave
the receipt. They admit they gave the receipt but they ask us to believe that they gave that receipt without getting the money. We do not accept that
story. Whether it is true or not it is impossible to determine, but if parties choose to execute formal documents acknowledging receipt of moneys
which they have not received they have only themselves to thank if a Court of Justice binds them to their written word. Therefore the relief granted
to the plaintiffs will be conditional on their refunding to the defendants the sum of Rs. 1,000 with interest at 6 per cent, per annum from the 4th
October 1911 till payment. The appeal is allowed with costs throughout.
Srinivasa Aiyangar, J.
I agree. I desire to add only this, I doubt whether Section 92 of the Evidence Act can have any application to this document, Ex. S as I read it,
is an agreement in writing. The plaintiffs do not desire to let in evidence of any oral agreement, because I think Ex. S is an agreement in writing and
not merely a memorandum of a, previously concluded oral agreement.