SUKHLAL RAMBAKAS PARDESHI Vs. JETHA OPAJISHET MARWADI

JUDGEMENT

(1.) In this case the plaintiffs sued the defendants to recover Rs. 5,368-13-6 as due on a mortgage passed by the defendants. The mortgage is not disputed; nor is the claim, except in regard to the compound interest fixed by the bond being excessive and the bond therefore unconscionable, and in regard to the liability of the defendants to pay the interest claimed for the period prior to February 1, 1923. The Subordinate Judge held that the agreement to pay compound interest at twelve annas per cent, per month was not unconscionable. It is to be noted that the parties are both traders and money lenders, and there was nothing which showed that there was anything in the nature of undue influence or pressure put upon the defendants when they agreed to pay such compound interest. In my opinion nothing has been shown that would justify our differing from the lower Court's view on this point.

(2.) Therefore, there remains only the question about interest prior to February 1, 1923. The contention of the defendants is that there was a compromise between the plaintiffs and defendant No. 1 as representing all the defendants about the interest due up to the end of January 1923, and that this compromise was arrived at in the mon January, 1928. The written statement asserted that it was then agreed that on the defendants paying Rs. 1,500 more to the plaintiffs the entire claim for interest due till the e January, 1923 would be discharged and the balance of interest would be remitted; that accordingly on February 1, 1928, the defendants paid Rs. 1,500 to the plaintiffs by giving a cheque for that sum, so that the interest only from February 1, 1923, onwards was in arrears; but that the plaintiffs by their notice dated February 16, 1923, claimed Rs. 5,066-1-0 contrary to this compromise. The plaintiffs denied the alleged compromise and they raised an issue, whether evidence of this alleged oral adjustment was inadmissible. The lower Court has held that such oral evidence is inadmissible under proviso (4) of Section 92 of the Indian Evidence Act, That proviso excepts the case of a document which is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents, from the provision that the existence of any distinct subsequent oral agreement to rescind or modify the terms of a document may be proved. It followed the decisions in Jagathnaih V/s. Shankar (1919) I.L.R. 44 Bom. 55, s.c. 22Bom. L.R. 39. and Mallappa V/s. Matum Nagu Chetty (1918) I.L.R. 42 Mad. 41, wherein it was held that a subsequent oral agreement to take less than what is due under a registered mortgage bond is an agreement modifying the terms of a written contract, and if it has to be proved, oral evidence is inadmissible for that purpose under the exception contained in this proviso (4),

(3.) It is contended in this appeal that that view is wrong, Reliance is placed by Mr. Thakor for the appellants upon the distinction that has been made in Mallappa V/s. Matwm Nagu Chetty (1918) I.L.R. 42 Mad. 423, and Ariyaputhira V/s. Muthukotnaraswami (1912) I.L.R. 37 Mad. 423, between an attempt to prove a subsequent oral agreement to rescind or modify a contract contained in a registered document and evidence that in fact a creditor has accepted a less sum than is really due under the registered instrument in whole or part discharge of the mortgage debt. Thus Sadasiva Ayyar J., at page 45, after saying that an oral agreement to substitute a mortgage charge for Rs. 150 payable in instalments in supersession of the mortgage charge for Rs, 175 payable at once under the registered mortgage bonds was inadmissible in evidence, goes on to say : "If, however, the Rs. 150 had been paid up regularly, there would have been a complete discharge and satisfaction of the mortgage debt which could be proved in accordance with the Indian decisions though the oral agreement could not be proved. "He then cites Kattika Bapanamma V/s. Kattika Kristnamma (1906) I.L.R. 30 Mad. 23, upon this question. In that case it was held that evidence of the actual discharge of certain arrears of maintenance by the plaintiff taking possession of certain land and getting the rents and profits thereof was admissible to show that there had been in fact such a discharge, although evidence to prove the agreement so to modify the original registered contract was inadmissible. Similarly, in Karampalli Unni Kurup V/s. Thekku Vittil Muthorakutti (1902) I.L.R. 26 Mad. 195, the creditors gave a discharge for the whole rent due on receiving a less sum, and it was held that that could be proved as a discharge under Section 63 of the Indian Contract Act, and that the fact that the discharge had been given in pursuance of an alleged oral agreement was immaterial. In Ariyaputhira V/s. Muthuhomaraswami (1912) I.L.R. 37 Mad. 423, it was held that a mortgage created by a registered instrument may be proved to have been discharged by admissible evidence (including oral evidence) of payment of the mortgage amount, or by admissible evidence of any other transaction which operates as a mode of payment. It is, therefore, urged that this is not a case of an oral agreement to modify or rescind the terms of the written document, but that the evidence sought to bE put in was merely evidence of a settlement of a past liability for payment of interest, which did not prevent the terms of the agreement operating in future as before and which therefore does not fall at all under Section 92 of the Indian Evidence Act. On the other hand, in Jagannath v. Shanlcar (1919) I.LO.R. 44 Bom. 55, s.c. Bom. L.R. 39, the plaintiff sued to recover Rs. 2,000 as balance due at the foot of an account of two registered mortgage deeds and the defendants pleaded that their father had paid a sum of Rs. 800 to the plaintiff, who accepted it in full satisfaction of the mortgage debts. The Assistant Judge allowed oral evidence to be led by the defendants to show that the plaintiff had agreed to accept Rs. 800 in full satisfaction of his claim, and holding the defendants contention proved dismissed the plaintiff's suit. On appeal the District Judge contained the decree. A second appeal from the decree was dismissed by Batchelor J. But on an appeal under the Letters Patent it was held that oral evidence was inadmissible to prove the alleged discharge of the mortgage debt under Section 92, proviso (4), of the Indian Evidence Act. Macleod C.J. in his judgment (p. 58) says, after referring to Mallappa V/s. Matum Nagu Chetty (1918) I.L.R. 42 Mad. 41. ...But the argument before us has been that there has not been a subsequent oral agreement to rescind or modify the mortgage, but there has been an actual discharge, and that oral evidence was admissible to prove a discharge. In my opinion there is no substance in that argument, The defendant's case must be that the mortgagee agreed to receive Rs. 800 in full satisfaction of the much greater amount which was due on the mortgage, and although he might have said when receiving Ks. 800 I now discharge you from the mortgage , there was none the less an agreement which modified the original agreement of mortgage. It would be an extremely dangerous precedent if oral evidence were allowed of such agreements.