DATTATRAYA SHANKER MOTE & ORS. versus ANAND CHINTAMAN DATAR & ORS.

Citation: [1975] 2 S.C.R. 224 · Decided: 03-10-1974 · Supreme Court of India · Bench: P. JAGANMOHAN REDDY · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

224 
:OATTATRAYA SHANKER MOTE & ORS. ' 
v. 
ANAND CHINTAMAN DATAR & ORS. 
October 3, 1974 
[P. JAGANMOHAN REDDY, M. H. BEG AND A. ALAGIRISWAMI, JJ.] 
Transfer of Property A.ct (4 of 1882) s. 100, proviso-If protecthm Is afforded 
to a simple mortgagee.-Compromlse decree 
creating charge, If covered b)• s. 
100-l'ransferee for cmtsfderaricm if includes mortgagec-'ln the hands of 
mea11ink of-Lis pendens applicability. 
The appellants filed a suit for the recovery of a money debt against the res· 
pondents. The suit was compromised and by the compromise decree three items 
of the respondent's property were1 sought to be charged. The compromise decre~ 
was presented in the Registrar's office and was noted in Book No. 1, but, due to 
the negligence of that office only ,the charge on one item of property was ·specifi· 
cally rec~rded in the registers mentioned in s. 51 and the Indices mentioned in s. 
55 of the Registration Act. The appellants, after realising some money by the 
sale of the itec1 of property with respect to which the charge was specifically re· 
corded in the Regist.rar's office, filed on execution application for the recovery 
bf balance of monel by the sale of one of the items of property with respect to 
which the Registrars office had not recorded the charge. That property, in the 
meanwhile, war. mortgaged under two simple mortgages. The mortgagee, claim-
ing to be ignorant of the prior charge, objected to its sale in the execution pro-
ceedings initiated by the appellants; but his objection was overruled and the pro· 
perty was sold in execution. 
The mortgagee under the two simple mortgages field a suit for recovery of 
the amount due to him. The suit was dismissed by the trial court on the ground 
that though he had no actual or constructive notice of the charge in· favour of 
the appellants, yet, the charge had priority over the subsequent mortgages and 
could be enforc.ed against the mortgagee in as much as a simple mortgage with-
out possession, did not give the mortgagee the protection given by the amended 
proviso to s. 100 of the Transfer of Property Act, 1882, which provides that a 
charge shall not 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, 
On appeals against the order arising out of the execution application of the 
appellants and against the judgment dismissing 
the mortgagee's suit, the High 
Court held against the appellant• on the ground that the .mortgage in favour of 
the respondent was protected under the proviso to s. 100 and was free from the 
charge in favour of the appellants. 
In appeals to this Court, on !he question of competing priorities between a 
charge created by the decree and the subsequent simple mortgage, 
HELD : 
(Per Curiam) : The appeals should be dismissed. [243 D-E; 
258 CJ 
(Per Jaganmohan Reddy and Alu.giriswumi, JJ : ) 
(I) The charge created by the terms of the decree is covered by s. 100 of the 
Act. A compromise decree, not being the result of a decision by the court, but an 
acceptance by the court of something to which the parties had agreed, if it creates 
a charge on imn1ovable property and is duly registered, it amounts to the creation 
of security by act of parties within the meaning of ~. I CO of the Act. [232 B-CJ 
A 
B 
c 
D 
E 
F 
G 
(2) The finding of the courts below that the mortgagee had no notice actual 
or constructive of the prior charge created by the decree is correct. [231 E-C] 
(a) Jt was an admitted positi.on that even on a careful inquiry the mortgagee 
H 
would not have known that the property was charged in favour of the appellants, 
in as much as, neither the property cards nor the municipal records nor the in-
dii:es contained a reference to the charge on the suit property. If the property 
i 
' '• 
A 
B 
c 
D 
E 
F 
G 
H 
D. S. MOTE V, A. C. DATAR 
225 
w.hlch a person wants to purchase or which Is being offered to him as mortgage or 
security for payment of any money is shown in Index II then he would have notice 
of such charse o. r mort;age and may wish to further l,lrobe by Inspecting Index 1 
and Book I. · Merely inspecting Book I or Index I will not benefit him because 
·all he can know ls that there ls a decree that has been registered which would not 
be helpful to him. [.230 H-23 lB; C·DJ 
(b) The l?roviso to Explanation 1 to s. 3 of the Transfer of Property Act, 
provides that m order to.amount to ~onst~cti

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