Registered mortgage deed controls the bargain; extrinsic negotiations, contemporaneous lease terms, and retrospective security compensation were rejected.

A duly executed and registered mortgage deed cannot be varied by prior negotiations, conversations, or an inadmissible unregistered writing. Although a contemporaneous lease formed part of the same transaction, it had to be read consistently with the mortgage deed's express terms: the profits were to be taken in lieu of interest, and the arrangement could not be recast as a simple mortgage carrying interest. On compensation for diminution of security, Section 65(a) of the Transfer of Property Act, 1882 was held inapplicable retrospectively to a mortgage executed before the Act commenced, so no compensation was payable.

---

---

Issues: (i) whether the terms of a duly executed and registered mortgage deed could be varied by reference to prior negotiations, conversations, or an unregistered writing; (ii) whether the mortgage deed and the contemporaneous lease formed one transaction and, if so, whether the mortgage was to be treated as a usufructuary mortgage only in form or as a simple mortgage carrying interest; (iii) whether the mortgagee was entitled to compensation for diminution of the security under the Transfer of Property Act, 1882.

Issue (i): whether the terms of a duly executed and registered mortgage deed could be varied by reference to prior negotiations, conversations, or an unregistered writing;

Analysis: The written mortgage embodied the parties' express bargain, and its clear terms could not be contradicted or altered by resort to preliminary discussions or alleged prior conversations. The unregistered writing relied on in support of a later arrangement was inadmissible, and therefore could not affect the terms of the registered instrument.

Conclusion: The mortgage deed could not be varied by extrinsic negotiations, conversations, or the unregistered writing.

Issue (ii): whether the mortgage deed and the contemporaneous lease formed one transaction and, if so, whether the mortgage was to be treated as a usufructuary mortgage only in form or as a simple mortgage carrying interest;

Analysis: The mortgage and lease were part of the same transaction, but there was no inconsistency between them. The lease did not detract from the plain meaning of the mortgage deed, which provided that the profits of the mortgaged property were to go in lieu of interest and that no interest was payable by the mortgagor. The surrounding circumstances could not be used to recast the bargain into a different legal form.

Conclusion: The mortgage had to be given effect according to its terms, and it was not open to treat it as a simple mortgage carrying interest.

Issue (iii): whether the mortgagee was entitled to compensation for diminution of the security under the Transfer of Property Act, 1882.

Analysis: Part of the mortgaged property had been withdrawn from the security because of a superior claim by the mortgagor's sister, but the mortgagee had taken the security with knowledge of the circumstances. In any event, Section 65(a) of the Transfer of Property Act, 1882 did not apply to a mortgage executed before the Act came into force, although one of the later charges was subsequent to it.

Conclusion: No compensation for diminution of security was payable to the mortgagee.

Final Conclusion: The appeals succeeded, the High Court's orders were set aside, and the decree of the Subordinate Judge was restored in favour of the mortgagee on the principal issues.

Ratio Decidendi: A clear and unambiguous written mortgage instrument cannot be varied by prior negotiations or an inadmissible unregistered document, contemporaneous instruments must be read consistently with their express terms, and Section 65(a) of the Transfer of Property Act, 1882 cannot be applied retrospectively to a mortgage executed before the Act commenced.

---