KASHINATH BHASKAR DATAR vs. BHASKAR VISHWESHWAR KARVE

Case Analysis

KASHINATH BHASKAR DATAR vs. BHASKAR VISHWESHWAR KARVE

April 13, 2025

A) ABSTRACT / HEADNOTE

The landmark case of Kashinath Bhaskar Datar v. Bhaskar Vishweshwar Karve, decided by the Hon’ble Supreme Court of India in 1952, provided critical clarity on the applicability of the Indian Registration Act, 1908, specifically Section 17(1)(b) and its interplay with the doctrines of collateral purpose, part performance, and modification of interest in immovable property. The principal question revolved around the admissibility and legal effect of an unregistered agreement that purportedly modified and extinguished the liabilities under two registered mortgage deeds. The defendant sought to rely on this unregistered agreement to establish satisfaction of mortgage debts. The Supreme Court held categorically that the document could not be used for any purpose, as it squarely fell within the mandatory registration requirement. The Court further clarified that the document itself created, limited, and extinguished an interest in immovable property, which brought it under the domain of Section 17(1)(b) of the Registration Act, thus rendering it inadmissible in absence of registration. The ruling stands as a strong precedent reaffirming the statutory necessity of registration in matters affecting interests in immovable property and restricts circumvention through collateral purposes or part performance when no such performance exists.

Keywords: Registration Act 1908, Mortgage, Interest in Immovable Property, Part Performance, Collateral Transaction, Section 17(1)(b), Section 49.

B) CASE DETAILS

i) Judgement Cause Title:
Kashinath Bhaskar Datar v. Bhaskar Vishweshwar Karve

ii) Case Number:
Civil Appeal No. 140 of 1951

iii) Judgement Date:
22nd February 1952

iv) Court:
Supreme Court of India

v) Quorum:
Saiyid Fazl Ali and Vivian Bose, JJ.

vi) Author:
Justice Vivian Bose

vii) Citation:
1952 SCR 491

viii) Legal Provisions Involved:
Section 17(1)(b), Section 17(2)(v), and Section 49 of the Indian Registration Act, 1908
Section 92, Proviso 4 of the Indian Evidence Act, 1872
Section 53A of the Transfer of Property Act, 1882

ix) Judgments Overruled by the Case:
None explicitly overruled, but distinguished from several prior High Court interpretations.

x) Case is Related to which Law Subjects:
Civil Law, Property Law, Contract Law, Law of Evidence

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The case emerged from a suit instituted to recover money based on two mortgage deeds, dated 7 April 1931 and 17 December 1935 respectively. The defendant contested the suit by asserting that both mortgages stood fully satisfied owing to a subsequent agreement executed by the assignor of the mortgagee rights, Narayan Gopal Sathe. This agreement, however, was not registered. The dispute came down to the legal acceptability of such an unregistered document which modified the interest under registered mortgage deeds. The case traveled through the Court of the Subordinate Judge at Poona, the Bombay High Court, and eventually reached the Supreme Court by way of appeal.

D) FACTS OF THE CASE

The two mortgage deeds were originally executed in favor of Narayan Gopal Sathe for Rs. 9,500 and Rs. 3,500 respectively, involving the same immovable property. Subsequently, Sathe assigned these mortgages to the plaintiff-appellant Kashinath Bhaskar Datar on 28 March 1940. The defendant resisted the plaintiff’s suit on the basis of an unregistered document dated 17 October 1937, claiming it demonstrated full satisfaction of mortgage dues. This document was created when the defendant agreed to act as surety for Sathe, who had been appointed as a Receiver by a court and required to furnish a surety bond of Rs. 10,000.

The agreement detailed modifications in terms: a reduction in the interest rate from 14 annas to 8 annas, restructuring of the lump-sum due into monthly payments, and acknowledgement that no further dues remained under the mortgages. The trial court and the High Court both rejected this unregistered document, holding that it required registration under Section 17(1)(b) of the Registration Act. The Supreme Court’s analysis centered on whether this document was admissible and whether its contents affected the interest in immovable property.

E) LEGAL ISSUES RAISED

i) Whether the unregistered agreement required compulsory registration under Section 17(1)(b) of the Indian Registration Act, 1908?

ii) Whether the document could be used for a collateral purpose or to prove part performance?

iii) Whether the document modified or extinguished an interest in immovable property?

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsel for the appellant argued that the document in question directly affected the rights and liabilities under the two registered mortgage deeds. Therefore, it had to be registered as it created, modified, and extinguished interests in immovable property. The document was the source of altered obligations and stood not as evidence of a prior transaction but as the very instrument effectuating it. Reliance was placed on Tika Ram v. Deputy Commissioner of Bara Banki (26 I.A. 97) which held that a subsequent unregistered agreement modifying a registered deed could not override the original contract.

It was further argued that the terms such as the reduced interest rate and the satisfaction of principal payments clearly altered the rights of the mortgagee and obligations of the mortgagor. This brought the document squarely within the ambit of Section 17(1)(b).

G) RESPONDENT’S ARGUMENTS

i) The respondent’s counsel asserted that the document merely acknowledged a past satisfaction and was in the nature of a receipt, not needing registration. It was contended that the agreement should be treated as a release of part of the debt, and that mere remission did not amount to extinguishment of an interest in property.

Reliance was placed on precedents like Mahim Chandra Dey v. Ram Dayal Dutta (AIR 1926 Cal 170) and Ram Ranjan v. Jayantilal (AIR 1926 Cal 906), where it was held that part releases or acknowledgements of satisfaction need not be registered.

Further, it was argued that the document should be admitted for the collateral purpose of showing payment, or that it fell under the doctrine of part performance under Section 53A of the Transfer of Property Act.

H) RELATED LEGAL PROVISIONS

i) Section 17(1)(b) of the Indian Registration Act, 1908 – Mandates registration of non-testamentary instruments which create, declare, assign, limit or extinguish rights in immovable property valued at more than Rs. 100.

ii) Section 49 of the Registration Act, 1908 – Bars use of unregistered documents for affecting immovable property unless for limited purposes like part performance or collateral evidence.

iii) Section 92 of the Indian Evidence Act, 1872 (Proviso 4) – Prevents oral agreements from modifying written contracts unless the agreement itself is in writing and registered if required.

iv) Section 53A of the Transfer of Property Act, 1882 – Protects possession based on part performance of an unregistered contract if certain conditions are met.

H) JUDGEMENT

a. RATIO DECIDENDI

i) The Court held that the document was inadmissible as it required registration under Section 17(1)(b) because it created and extinguished rights in immovable property. The document did not merely acknowledge a past fact but actively modified the mortgage terms and declared satisfaction of dues. Therefore, it was not a mere memorandum or collateral instrument, but a substantive document of title that had to be registered.

Further, the Court clarified that remission of interest or restructuring of repayment affected the mortgagee’s right to interest and principal under the deed, thus limiting his interest in the property. Therefore, the document could not be used to prove satisfaction unless registered.

The ratio was based heavily on the distinction between evidentiary documents and operational instruments that directly alter legal rights.

b. OBITER DICTA

i) The Court also observed that an unregistered document, even if containing a clause agreeing to execute a future registered document, cannot escape the requirement of registration if the present document itself modifies legal interests. The fallback clause in the agreement stating “if you wish, I will execute a registered document later” does not exempt the present document from registration.

c. GUIDELINES

Any document that limits, extinguishes, or modifies a mortgagee’s rights in immovable property must be registered under Section 17(1)(b).
A document that creates fresh terms or reduces interest/principal payable must be treated as a new agreement and not merely as a receipt.
Collateral use is not allowed if the document is being used to prove the main transaction.
Doctrine of part performance is not applicable unless the document is a transfer and the transferee is in possession.

I) CONCLUSION & COMMENTS

The case is a seminal precedent in understanding the legal demarcation between operational documents that affect immovable property and evidentiary instruments. The judgment makes it clear that unregistered documents which purport to alter rights and obligations under a registered mortgage cannot be enforced or even admitted in evidence unless registered. It strengthens the intent behind registration statutes by disallowing any circumvention under the garb of collateral purposes or equitable doctrines. This judgment remains critical in the realm of property law and evidence in India and is frequently relied upon in litigation surrounding mortgage satisfaction disputes, interest remission, and collateral agreements.

J) REFERENCES

a. Important Cases Referred: