# M. L. ABDUL JABHAR SAHIB v. H; V. VENKATA SASTRI & SONS & ORS

- **Citation:** [1969] 3 S.C.R. 513
- **Court:** Supreme Court of India
- **Decided:** 1969
- **Case number:** Civil Appeals Nos. 272 to 274 of 1966
- **Bench:** S. M. S!Kri, R. S. Bachawat, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-l-abdul-jabhar-sahib-v-h-v-venkata-sastri-sons-ors-4609
- **Pages:** 11

## Headnote

Transfer of Properly Act, 1882 (Act 4 of 1882), ss. 3, 59, 73(1) and
100-Security bond charging properties for payment of Rs. 50,000 execuzed to satisfy condition for leave to defend suit under 0. 7 Madras High
Court Original Side Rules-S. 59 of the T. P. Act lvhether attracted to
charge under s. 100-Requirernents of valid attestation-Security bond did
not require attestation but required regist.J'ation under s. 17(1) (b) of Registration Act, 1908 (Act 16 of 1908)-Decree of court mentioning ;hat
charge created by security bond enured for benefit of decree
holderEffect of decree-Rateable distribution when pennissible-Jurisdiction of
High Court-Property situate outside li1nits of original jurisdiction under
Letters Patent--Objection as to jurisdiction whether could be raised
in
circumstances of case.
The appellant filed suit No. 56 of 1953 against H for recovery of certain moni..es on the basis of promissory notes. As the suit was under 0. 7
of the Madras High Court Original Side Rules H was given leave to defend
it on furnishing certain security. Accordingly H executed in favour of the
Registrar, Madras High Court, a security bond charging certain properties 'for the payment of Rs. 50,000.
The document was attested by only
one witness.
At the time of registration it was signed by t\VO identifying
witnesses and the Suh-Registrar.
The trial Judge decreed the appellant's
suit and the decree mentioned that the charge created by H's security bond
would enure for the benefit of the decree holder.
Jn execution proceedings the properties in question were sold and the proceeds deposited
in
court. At this stage the three respondents who also held money decrees
against H applied to the Court for rateable distribution of the assets realised in the execution of the appellant's decree in suit No. 56 of 1953. The
trial Judge dismissed their applications. In Letters Patent
Appeals
the
High Court held that in the absence of attestation by the two witnesses the
security bond executed by H was invalid inasmuch
as a charge on property created unde·r s. 100 o'f the Transfer of Property Act attracted the
provisions of s. 59.
As to the decree passed in suit No. 56 of 1953
the
High Court held that in view of the decree holder's omission to amend
the plaint by adding a prayer for enforcement of the charge the decree
should be conStrued as containing merely a recital of the fact that a secu-
·rity bond had been executed.
On these findings the High Court held that
the respondents were entitled to rateable distribution. Against the High
Court's orders the appellant filed appeals in this Court.
On the question
of attestation he contended that the sub-Registrar and the two identi'fying
witnesses must also he treated as having attested the security bond.
HELD : (i) The essential conditions of a valid attestation under s. 3
of the Transfer of Prope·rty Act are : ( 1) two or more
witnesses have
seen the executant sign the instrument or have received from him a perw
sonal acknowledgment of his signature; (2~ with a view to attest or to
bear witness to this fact ea.ch of them has signed the instrument in
the
presence df the executant.
It is essential that the witness should have put
his signature animo attestendi, that is, for the purpose of attesting that he
has seen the executant sign or has received from him a personal acknowledgment of his signature. If a person puts his signature on the docu-
514
SUPREME COURT REPORTS
(1969] 3 s.c.R.
ment for some other purpose, e.g., to certify that he is a scribe or an idenA
tifier or a registering officer, he is not an attesting witness.
[519 C-D]
Prima facie the registering officer puts his signature on the document
in discharge of his statutory duty under s. 59 elf the Registration Act and
not for the purpose of attesting it or certifying that he has received from
the executarit a personal acknowledgment of his signature.
[520 B-C]
In the present case the evidence did not show that the registering officer and the iden

## Text

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M. L. ABDUL JABHAR SAHIB
v.
H; V. VENKATA SASTRI & SONS & ORS.
Februar,y 4, 1969
[S. M. S!KRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.]
Transfer of Properly Act, 1882 (Act 4 of 1882), ss. 3, 59, 73(1) and
100-Security bond charging properties for payment of Rs. 50,000 execuzed to satisfy condition for leave to defend suit under 0. 7 Madras High
Court Original Side Rules-S. 59 of the T. P. Act lvhether attracted to
charge under s. 100-Requirernents of valid attestation-Security bond did
not require attestation but required regist.J'ation under s. 17(1) (b) of Registration Act, 1908 (Act 16 of 1908)-Decree of court mentioning ;hat
charge created by security bond enured for benefit of decree
holderEffect of decree-Rateable distribution when pennissible-Jurisdiction of
High Court-Property situate outside li1nits of original jurisdiction under
Letters Patent--Objection as to jurisdiction whether could be raised
in
circumstances of case.
The appellant filed suit No. 56 of 1953 against H for recovery of certain moni..es on the basis of promissory notes. As the suit was under 0. 7
of the Madras High Court Original Side Rules H was given leave to defend
it on furnishing certain security. Accordingly H executed in favour of the
Registrar, Madras High Court, a security bond charging certain properties 'for the payment of Rs. 50,000.
The document was attested by only
one witness.
At the time of registration it was signed by t\VO identifying
witnesses and the Suh-Registrar.
The trial Judge decreed the appellant's
suit and the decree mentioned that the charge created by H's security bond
would enure for the benefit of the decree holder.
Jn execution proceedings the properties in question were sold and the proceeds deposited
in
court. At this stage the three respondents who also held money decrees
against H applied to the Court for rateable distribution of the assets realised in the execution of the appellant's decree in suit No. 56 of 1953. The
trial Judge dismissed their applications. In Letters Patent
Appeals
the
High Court held that in the absence of attestation by the two witnesses the
security bond executed by H was invalid inasmuch
as a charge on property created unde·r s. 100 o'f the Transfer of Property Act attracted the
provisions of s. 59.
As to the decree passed in suit No. 56 of 1953
the
High Court held that in view of the decree holder's omission to amend
the plaint by adding a prayer for enforcement of the charge the decree
should be conStrued as containing merely a recital of the fact that a secu-
·rity bond had been executed.
On these findings the High Court held that
the respondents were entitled to rateable distribution. Against the High
Court's orders the appellant filed appeals in this Court.
On the question
of attestation he contended that the sub-Registrar and the two identi'fying
witnesses must also he treated as having attested the security bond.
HELD : (i) The essential conditions of a valid attestation under s. 3
of the Transfer of Prope·rty Act are : ( 1) two or more
witnesses have
seen the executant sign the instrument or have received from him a perw
sonal acknowledgment of his signature; (2~ with a view to attest or to
bear witness to this fact ea.ch of them has signed the instrument in
the
presence df the executant.
It is essential that the witness should have put
his signature animo attestendi, that is, for the purpose of attesting that he
has seen the executant sign or has received from him a personal acknowledgment of his signature. If a person puts his signature on the docu-
514
SUPREME COURT REPORTS
(1969] 3 s.c.R.
ment for some other purpose, e.g., to certify that he is a scribe or an idenA
tifier or a registering officer, he is not an attesting witness.
[519 C-D]
Prima facie the registering officer puts his signature on the document
in discharge of his statutory duty under s. 59 elf the Registration Act and
not for the purpose of attesting it or certifying that he has received from
the executarit a personal acknowledgment of his signature.
[520 B-C]
In the present case the evidence did not show that the registering officer and the identifying witnesses signed the document with the intention
of attesting it.
Nor was it shown that the registering officer signed it in
the presence of the executant. The document could not therefore be said
to have been attested by these witnesses and must be held to have been
signed by one attesting witness only.
[520 DJ
Veerappa Chettiar v. Subramania, I.L.R. 52 Mad. 123'; Girja Datt v.
Gangotri, A.LR. 1955 S.C. 346, Abinash Chandra Bidyanidhi Bhattacharya
v. Dasarath Malo, I.L.R. 56 Cal. 598, Shiam Sundar Singh v. Jagannath
Singh, 54 M.L.J. 43 and Surendra Bahadur Singh v. Thakur Behari Singh,
1939 (2) M.L.J. 762, referred to.
(ii) Section 100 of the Transfer of Property Act does not attract the
provisions of s. 59.
[521 C-D]
The first paragraph of s. 100 consists of two parts. The first part concerns the creation of a charge over immovable property which may be by
act o'f parties or by operation of law. No restriction is put on the manner
in which a charge can be made.
[521 CJ
_
When such a charge has been created the second part comes into play.
It provides that all the provisions hereinbefore contained which apply to a
simple mortgage shall, so far as may be, apply to such charge. The second
part ·does not address itself to the question of creation of a charge. It does
not attract the provisions of s. 59 relating to the creation of a mortgage.
The second part moreover makes no distinction between a charge created
by act of parties and a charge by operation of law.
Obviously the provisions Of s. 59 are not attracted to a charge by operation of law. Likewise
the legislature C'Juld not have intended that the second part would attract
the provisions of s. 59 to a charge created by act of parties.
[521 D-EJ
If a charge can be made by a registerec:f instrument only in accordance with s. 59, the subsequent transferee will always· have notice of the
charge in view of s. 3 of the Act. But the basic assumption of the doctrine
of notice enunciated in the second paragraph is that there may be cases.
when the subsequent transferee may not h'!-ve notice of the cha·rge.
The
plain implication of this paragraph is that a charge can be made without
any writing.
[521 F-G]
If a non-testamentary instrument
creates a charge of the value of
Rs. 100/- or upwards the document must be registered under s. 17(l)(b)
of the Indian Registration Act, 1908.
But the·re is no provision of law
which requires that an instrument creating the charge mu~t be attested by
witnesses.
[521 G-H]
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The object of the second part of the first para¥1'aph of s. 100 is to
make it clear that the rights and liabilities elf the parties in case of a charge
H
shall so far as may be the same as the rights and liabilities of the parties
of a simple mortgage.
It was not intended to
prescribe any particula{
mode for the creation of a charge. [522 Bl
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ABDUL JABHAR v. VENKATA SASTRI (Bachawat, J.)
515
It followed that the security bond in the present case was not required
to be attested by witnesses. It was duly registered
and was valid and
operative. [522 Cl
Viswanadhan v. Menon, I.LR. [1939] Mad. 199 and Shiva Rao v.
Shanmugasundaraswami, I.LR. [1940] Mad. 306, disapproved.
Baburao v. Narayan, I.LR. 1949 Nag. 802, 819-822, approved.
(iii) The decree in suit No. 56 of 1963 on its true construction declared that the security bond created a charge over
the
properties
in
favour of the plaintiffs
1for payment of the decretal ainount and gave them
the liberty to apply for sale of the properties for the discharge of the incumbrance.
Pursuant to the decree the properties
were
sold and the
assets were held by the court.
The omission to ask for an amendment of
the plaint was an irregularity, but that did not affect the construction of
the decree. [522 D-El
(iv) The immovable properties had been sold in execution Of a decree
ordering sale for the discharge of the encumbrance thereon in favour of
the appellant. Section 73(1) proviso (c) therefore applied and the proceeds of the sale after defraying the expenses of the sale must be applied
in the first instance in discharging the amount due to the appellant. Only
the balance left after discharging this amount could be distributed among
the respondents.
[523 BJ
(v) Since the respondents"' own case rested on the assumption that the
properties were lawfully sold they could not be allowed to raise the objection that the High Court had no territorial jurisdiction for sale of properties outside the local limits of its ordinary original jurisdiction. [522 G]
Seth Hiralal Patni v. Sri Kali Nath, [1962] 2 S.C.R.
747,
751-52,
Bahrein Petrolium Co. Ltd. v. P. J. Pappu, [1966) 1 S.C.R. 461, 462-63 and
Zamindar of Etiyapuram v. Chidambaram Chetty,
I.LR. 43. Mad. 675
(F.B.), referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 272 to
274 of 1966.
Appeals by special leave from the judgment and order dated
July 28, 1961 of the Madras High Court in O.S.A. Nos. 65, 70
and 71 of 1956.
K. N. Balasubramaniam and R. Thiagarajan, for the appellant (in all the appeals).
R. Gopalakrishnan, for respondents Nos. 2 to 4 (in C.A. No.
272 of 1966), respondents Nos. 1 and 2 (in C.A. No. 273 of
1966) and respondent No. 1 (in C.A. No. 274 of 1966).
The Judgment of the Court was delivered by
Bachawat, J.
On February 23,
1953 the appellant instituted C.S. No. 56 of 1953 on the Original Side of the Madras
High Court under the summary procedure of Order 7 of the Original Side Rules against Hajee Ahmed Batcha claiming a decree
for Rs. 40,556/1/2/- and Rs. 8,327 /12/9/- said to be due under
two promissory notes executed by
Haji Ahmed
Batcha.
On
March 9, 1953, Hajee Ahmed Batcha obtained leave to defend
the suit on condition of his furnishing the security for a sum of
SUPREME COURT REPORTS
[1969] 3 S.C.R.
Rs. 50,000 to the satisfaction of the Registrar of the High Court.
. On March 26, 1953 Hajee Ahmed Batcha executed a security
bond in favour of the Registrar of the Madras High Court charging several immoveable properties for payment of Rs. 50,000.
The condition of the bond was that if he paid to the appellant the
amount of any decree that might be passed in the aforesaid suit
the bond would be void and of no effect and that otherwise it
would remain in full force. The bond was attested by B. Somnath
Rao. It was also signed by K. S. Narayana Iyer, Advocate, who
explained the document to Hajee Ahmed Batcha and identified
him.
All the properties charged by the bond are outside the
local limits of the ordinary original jurisdiction of the Madras
High Court.
The document was presented for registration on
March 29, 1953 and was registered by D. W. Kittoo, the Sub·
Registrar of Madras-Chingleput District.
Before the Sub-Regis·
trar, Hajee Ahmed Batcha admitted execution of the document
and was identified by Senkaranarayan, and Kaki Abdul Aziz. The
identifying witnesses as also the Sub-Registrar signed the docu·
ment.
Hajee Ahmed Batcha died on February 14, 1954 and
his legal representatives were substituted in his place in C.S. No.
56 of 1953. On March. 19, 1954 Ramaswami, J. passed a decree
for Rs. 49,891/13/· with interest and costs and directed payment
of the decretal amount on or before April 20, 1954. While passing the decree, he o.bserved :-"It is stated that the defendant has
executed a security bond in respect of their immoveable properties
when they obtained leave to defend and this will stand enured
to the benefit of the decree-holder as a charge for the decree
amount.''
...
Clauses 3 and 4 of the formal decree provided :-
" ( 3) that the security bond executed in respect of
their immoveable properties by defendants 2 to 4 in
pursuance of the order dated 9th March 1953 in application No. 797 of 1953 shall stand enured to the benefit
of the plaintiff as a charge for the amounts mentioned
in clause 1 supra;
( 4) that in default of defendants 2 to 4 paying the
amount mentioned in clause 1 supra on or before the
date mentioned in clause 2 supra the plaintiff shall be
at liberty to apply for the appointment of Commissioners
for sale. of the aforesaid properties."
The appellant filed an application for (a) making absolute the
charge decree date.ct March 31, 1954 and directing sale of the
properties; and (b) appointment of Commissioners for selling
them.
On April 23, 1954 the Court allowed the application,
appointed Commissioners for selling of the properties and directed
that the relevant title deeds and security bond be handed over
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ABl)UL JABHAR v. VEN1'.ATA SASTRI (Bachawat, J.)
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to the Commissioners.
The Commissioners sold the properties
on May 29 and 30, 1954. The sales were confirmed and the sale
proceeds were deposited in Court on July 2, 1954.
All the three respondents are simple money creditors of Hajee
Ahmed Batcha.
The respondents Venkata Sastri & Sons filed
O.S. No. 13 of 1953 in the Sub-Court, Vellore, and obtained
a decree for Rs. 5,500 on March 27, 1953.
Respondent H.R.
Cowramrna instituted O.S. No. 14 of 1953 in the same Court and
obtained a money decree on April 14, 1953.
The two decreeholders filed applications for execution of their respective decrees.
One Rama Sastri predecessors of respondents H.R. Chidambara
Sastri and H.R. Gopal Krishna Sastri obtained a money decree
against Hajee Ahmed Batcha in O.S. No. 364 of 1951/52 in the
Court of the District Munsift', Shimoga, got the decree transferred
for execution through the Court of the District Munsiff, Vellore,
and filed an application for execution in that Court. On June 7,
1954 the aforesaid respondents filed applications in the Madras
High Court for ( i) transfer of their .execution petitions pending
in the Vellore courts to the file of the High Court and (ii) an
order for rateable distribution of the assets realized in execution
of the decree passed in favour of the appellant in C.S. No. 56 of
1953.
The appellant opposed the applications and contended
that as the properties were charged for the payment of his decretal
amount, the sale proceeds were not available for rateable distribution amgngst simple money creditors.
The respondents
contended that the security bond was invalid as it was not attested
by two witnesses and that the decree passed in C.S. No. 56 of
1953 did not create any charge. Balakrishna Ayyar, J. dismissed
all the applications as also exemption petitions filed by the respondents.
He held that the decree in C.S. No. 56 of 1953 did
llOt create a charge on the properties. But following the decisi~
in Veerappa f:hettiar v. Subramania(') he held that the security
bond waa sWliciently attested by the Sub-Registrar and the identifying witnea!les-. The respondents filed appeals against the orders.
On March zs·. 1 %& the Jj)ivisional Bench hearing the appeals
referred t~ a Fult Bench the following question :
"Whether the
decis1ou in
Veerappa
Chettiar v.
Subramania Iyer (l.L.R. 52 Mad. 123) requires reconsi'11raifon."
The Full Bench held :
"fn· our opinion, such signatures of the registering
officer and the identifying witnesses endorsed on a mortgage· document can be treated as those of attesting witH
nesses if ( l) the signatories are those who have seen
Ifie exeeution or received a personal acknowled}lment
(1) l.L.R. 52 Mad. 123.
518
SUPREME COURT REPORTS
(1969] 3 S.C.R.
from the executant of his having executed the docuA
ment, ( 2) they sign .their names in the presence of the
executant and (3) wcile so doing they had the animus
to attest.
The mere presence of the signatures of the
registering officer or the identifying witnesses on the
registration endorsements would not by themselves be
sufficient to satisfy the requirem.~nts of a valid attestaB
tion; but it would be competent for the parties to show
by evidence that any or all of these persons did in fact
intend to and did sign as attesting witness as well."
The Full Bench held that the decision in Veerappa Chettiar's
Case(') can be held to be correct to this limited extent only and
not otherwise. At the final hearing of the appeals, the Divisional
C
Bench held that ( 1) a charge by act of parties could be created
only by a document registered and attested by two witnesses; (2)
the security bond was not attested by two witnesses and was
therefore invalid; (3) the decree in C.S. No. 56 of 1953 should
be construed as containing nothing more than a recital of the fact
of there having been a security bond in favour of the plaintiff;
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and the sale in execution of the decree must be regarded as a
sale in execution of a money decree; and ( 4) the
respondents
were entitled to an order for rateable distribution.
Accordingly.
the Divisional Bench allowed the appeals, directed attachment of
(he sale proceeds and declared that the respondents were ~ntitled
to rateable distribution along with the appellant.
The present
appeals have been filed after obtaining special leave from
this
E
Court.
The following questions arise in these
appeals : ( 1) Is the
securitv bond attested bv two witnesses: (2) if not. is it invalid?
( 3) does the decree in· C.S. No. 56 of 1953 direct sale of the
properties for the discharge of a charge thereon. and ( 4) are the
respondents entitled to rateable distribution of the assets held bv
court ~ As to the first question. it is not the case of the appellant
that KS. Naravana Iver is an attesting witness.
The contention
is that the Sub-Registrar D.W. Kittoo and the identifying witnesses
Senbranarayana and Kaki Abdul Aziz attested the document.
In our opinion. the High Court rightly rejected this contention.
Section 3 of the Transfer of Property Act gives the definition
of the word "attested'' and is in these words :-
"Attested". in relation to an instrument. means and
shall be deemed to have meant attested by two or more
witnesses each of whom has seen the executant sign or
affix his mark to the instrument. or has seen some other
person sign the instrument in the presence and by the
(1) I.LR. 52 Mad. 12).
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ABDUL JABHAR v. VENKATA SASTRI (Bachawat, J.)
519
direction of the executant, or has received from the executant a personal acknowledgment of his signature or
mark, or of the signature of such other person, and each
of whom has signed the instrument in the presence of
the executant; but it shall not be necessary that more
than one of such witnesses shall have been present at the
same time and no particular form of attestation shall be
necessary.''
It is to be noticed that the word "attested", the thing to be defined,
occurs as part of the definition itself. To attest is to bear witness
to a fact.
Briefly put, the essential conditions of a valid
attestation under s.
3 are : ( 1) two or more witnesses
have seen the executant sign the instrument or have received
from him a personal acknowledgment of his signature; (2) with
a view to attest or to bear witness to this fact each of them has
signed the instrument in th~ presence of the
executant.
It is
essential that the witness should have put his signature animo
attestandi, that is, for the purpose of attesting that he has seen
the ex.ecutant sign or has received from him a personal acknowledgment of his signature. If a person puts his signature on the
document for some other purpose, e.g.,
to certify that he is a
scribe or an identifier or a registering officer, he is not an attesting
witness.
"In every case' the Court must be satisfied that the names were
written animo attestandi", see Jarman on Wills,
8th ed. 137.
Evidence is admissible to show whether the witness had the intention to attest.
"The attesting witnesses must subscribe with the
intention that the subscription made should be complete attestation of the will, and evidence is admissible to show whether such
was the intention or not," see Theobald on Wills, 12th ed. p. 129.
In Girja Datt v. Gangotri (')the Court held that the two persons
who had identified the testator at the time of the registration of the
will an<l had appended their signatures at the foot of the endorsement by the Sub-Registrar. were not attesting witnesses as their
sirnatures were not put "animo attestandi". In Abinash Chandra
Bidrnnidhi Bhattacharya v. Dasarath Malo( 2 ) it was held that a
person who had put his name under the word "scribe" was not an
attesting ":itn~ss as he had put his ~ignature only for the purpose
0f authent1catmg that he was a "scnbe". In Shiam Sundar Singh
v. lagannath Singh (3 ) the Privy Council held that the legatees
wh? had put_ their signatures on the will in token of their consent
to 11~ execution were not attesting witnesses and were not
disqualified from taking as legatees.
The Indian. Reg_istration Act. 1908 lays down a detailed procedure fo~ _reinstrallon of documents.
The registering officer is
(I) A.l.R. 1955 S.C. 346. 351.
(l) 54 M.L.J. 43.
(2) T.l.R. 56 Cal. 59~
s20
SUPREMlE COUR<Jl RIEPORTS
[1969)3 S.C.R.
.under a duty to enquire whether the document is executed by
the person by whom it· purp<!>rts to have been executed and to
satisfy himself as to the identity of the executant, s. 34 ( 3). He
can register the document if he is satisfied about the identity of
the person executing the document and· if that person• admits
execution, [s. 25 ( 1) ].
The signatures of the executant and of
·every person examined with reference to the document are endorsed on the document, (s. 58). The registering officer is required
to affix the date and his signature to the endorsements ( s. 59).
Prima facie, the registering officer puts his signature on the document in discharge of his statutory duty under s. 59 and not for the
purpose of attesting it or certifying that he has received from the
·executant a· personal acknowledgment of his signature.
The evidenc~ does not show that the registering officer o, W.
Kitto put· his signature on the document with the
intention of
attesting it Nor is it proved that he signed the document in the
presence of the executant.
Tn these circumstances he cannot be
regarded as an attesting witness, see Surendra Bahadur Singh v.
Thakur Behari Singh('). Likewise the identifying
witnesses
Senkaranarayima and Kaki Abdul Aziz: put their sigmtures on
the document to authenticate the fact that they ha j identified the
executant.
It is not shown that they put their signatures for the
purpose of attesting the document. They cannot therefore be
regarded as attesting. witnesses.
It is common case that B. Somnath Rao attested the document.
It follows that the document was attested by one witness only.
As to the second question, the argument on behalf of the respondents is that s. 100 of the Transfer of Property Act attracts s.
59 and· that a charge can be created only by a document signed,
registered and attested by two witnesses in accordance with s. 59
where the principal money secured is Rs. 100 or upwards. The
High Court accepted this contention following its earlier decisions
in Viswanadhan v. Menon(') and Shiva Rao v. Shanmugasundaraswami(') and held that the security bond was invalid, as it was
attested by one witness only. We are unable to agree with this
<ipinion. Section 100 is in these terms :-
"Where immoveable property of one person is by act
of parties or operation of la_w made security for the payment of money to another, and the transaction does not
amount to a mortgage, the latter person is said to have a
charge on the property: and all the provisions hereinbefore contained which, apply to a simple mortgage shall,
so far .. as. may be, apply to such charge.
(I) (1939) 2 M.L.J. 762.
(2) I.L.R. [1939] Mad. 199.
(J) I.L.R. [1940] Mad. JOS._
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ABDUL JABHAR v. VENKATA SASTRI (Bachawat, J.)
521
Nothing in this section applies to the charge of a
trustee on the trust property for expenses properly incurred in the execution of his trust, and, save as otherwise
expressly ·provided by any law for the
time being in
force, no charge shall 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."
The first paragraph consists of two parts: The first part con-·
cerns the creation of a charge over immoveable property. A charge
may be made by act of parties or by operation of Jaw.
No restriction is put on the manner in which a charge can be made.
Where such a charge has been created the second part comes into
play.
It provides that all the provisions hereinbefore contained
which apply to a simple mortgage shall, ;o far as may be, apply
to such charge.
The second part does not address itself to the
question of creation of a charge. It does not attract the provisions
of s. 59 relating to the creation of a mortgage.
With regard to the applicability of the provisions relating to a
simple mortgage, the second part of the first paragraph makes no
distinction between a charge created by act of parties and a.
charge by operation of law. Now a charge by operation of law
is not made by a signed; registered and attested instrument. Obviously, the second part has not the effect of attracting the provisions of s. 59 to such a charge. Likewise the legislature could not
have intended that the second part would attract the provisions
of s. 59 to a charge created by act of parties. Had this been the
intention of the
legislature the
second part would' have been
differently worded.
If a charge can be made by a registered instrument only in
accordance with s. 59, the subsequent transferee will always have·
notice of the charge in. view of s. 3 under which registration of the
instrument operates as such a notice. But the basic assumption
of the doctrine of notice enunciated in the· second paragraph is
that there may be cases where the subsequent transferee may not
have notice of the charge. The plain implication of this paragraph
is that a charge can be made without any writing.
If a non-testamentary instrument creates a charge of the value
of Rs. 100 or. upwards; the document must be registered under s.
17 (1 )(b) of the Indian Registration Act. · But there is no provision of law which requires that an instrument creating the charge
must be attested by witnesses.
·Before s. 100 was amended by Act 20 of 1929. it was well
settled that the section did not prescribe any particular mode of
· creating a charge. ,The amendment substituted the_ words "all -
;522
SUPREME COURT REPORTS
[1969] 3 S.C.R.
the provisions hereinbefore contained which apply to a simple
mortgage shall, so far as may be, apply to such charge," for the
words "all the provisions hereinbefore contained as to a mortgagor
shall, so far as may be, apply to the owner of such property, and
the provisions of sections 81 and 82 shall, so far as may be, apply
to the person having such charge." The object of the amendment
was to make it clear that the rights and liabilities of the parties in
case of a charge shall, so far as may be, the same as the rights and
Jiabilities of the parties to a simple mortgage.
The amendment
.was not intended to prescribe any particular mode for the creation
of a charge.
We find that the Nagpur High Court came to a
similar conclusion in Baburao v. Narayan('). It follows that the
security bond was not required to be attested by witnesses.
It
was duly registered and was valid and operative.
As to the third question, we find that the decree dated March
19, 1954 declared that the security bond in respect e>f the immove.
able properties would enure for the benefit of the appellant as a
charge for the decretal amount.
This relief was granted on the
~ral prayer of the plaintiffs.
We are unable to agree with the
High Court that in view of the omission to amend the plaint by
adding a prayer for enforcement of the charge, the decree should
be construed as containing merely a recital of the fact that a
security bond had been executed. In our opinion, the decree on
its true construction declared that the security bond created a
charge over the properties in favour of the plaintiffs for payment
of the decretal amount and gave them the liberty to apply for sale
of the properties for tl).e discharge of the incumbrance. Pursuant
to the decree the properties were sold and the assets are now held
by the Court. The omission to ask fot an amendment of the plaint
was an irregularity, but that does not affect the construction of
the decree.
It was suggested that the decree was invalid as the High Court
had no territorial jurisdiction ·under clause 12 of its Letters Patent
to pass a decree for sale of properties outside the local limits of
its ordinary original
jurisdiction.
For the purpose of these
appeals, it is sufficient to say that the respondents cannot raise this
question in the present proceedings. If the decree is_ invalid and
the sale is illegal on this ground, the respondents cannot maintain
·their applications for rateable distribution of the assets.
They
can ask for division of the sale proceeds only on the assumption
that t~e properties were lawfully sold. It is therefore unnecessary
to decide whether the objection as to the territorial jurisdiction of
the High Court has been waived by the
judgment-debtor and
cannot now be agitated by him and persons claiming through him
·having regard to the decisions in Seth Hiralal Patni v. Sri Kali
.(!) l.L.R. [1949] Nag. 802, 819-822.
A
B
c
D
E
F
G
H
A
8
c
ABDUL JABHAR v. VENKATA SASTRI (Bachawat, J.)
523
Nath('), Behrein Petroleum Co. Ltd., v. P. J. Pappu( 2 ), Zamindar
of Etiyapuram v. Chidambaram Chetty( 3 ).
As to the 4th question we find that the immoveable properties
have been sold in execution of a decree ordering sale for the discharge of the encumbrance thereon in favour of the appellant.
Section 73 (I) proviso ( c) therefore applies and the proceeds of
sale after defraying the expenses of the sale must be applied in
the first instance in discharging the amount due to the appellant.
Only the balance left after discharging this amount can be distributed amongst the respondents. It follows that the High Court
was in error in holding that the respondents were entitled to rateable distribution of the assets along with the appellant.
In the result, the appeals are allowed, the orders passed by the
Divisional Bench of the Madras High Court are set aside and the
orders passed by the learned Single Judge are restored.
There
will be no order as to costs.
G.C.
(1) [1962] 2 S.C.R. 747, 751-2.
(2) [1966] l S.C.R.461.462·3.
(3) 1.L.R, 43 Mad. 675 (F.B).
Appeals allowed.