V J VARKEY Vs. INDO MERCANTILE BANK LTD

JUDGEMENT

(1.) The objection raised by defendants 1 & 2 in O. S. No. 129/1955 on the file of the Kottayam District Court to the maintainability of the suit, has given rise to this revision petition. These defendants had an overdraft accommodation with the Calicut branch of the Indo Mercantile Bank Ltd. A sum of Rs. 1,47,024-8-11 was due to the bank from these defendants as the balance amount due as per accounts on 31st December 1952. At the request made by them in their letter dated 23rd March 1953, the accounts were transferred to the Kottayam branch of the bank. As collateral security for the amount due by these defendants, they executed a promissory note in favour of the bank on 23rd March 1953. The amount was further secured by a mortgage by deposit of title deeds on 7th August 1953 on which date the defendants addressed a letter to the bank intimating the fact of creation of such a mortgage and giving a list of the documents deposited with the bank. All these documents were also deposited with the bank on the same date. It is on the strength of these allegations that the plaintiff bank instituted the present suit for recovery of the balance amount due from the defendants as per the overdraft account, together with interest on such balance from the defendants and as a charge on the properties scheduled to the plaint, which are the items covered by the documents deposited with the bank.

(2.) By a separate application the plaintiff bank also moved for the appointment of a receiver to collect the income of these properties on the allegation that the security had become insufficient to satisfy the plaint claim and that the defendants were appropriating such income without even paying the interest on the outstanding loan. In opposing that application, the defendants reiterated their contention as raised in their written statement that the document evidencing the mortgage relied on by the plaintiff bank was one which had to be registered under S.17 of the Registration Act and that since it has not been so registered and no stamp duty paid on it, the document is inadmissible in evidence and the suit based on it is not maintainable. By the order dated 17-6-1956 the learned District Judge overruled these objections. The defendants have come up in revision, challenging the correctness of that order.

(3.) The question for consideration is whether the communication addressed by the defendants to the bank on 7th August 1953 intimating the fact of the deposit of the title deeds enumerated therein as security for the balance amount due under the overdraft account, is a document compulsorily registerable under S.17 of the Registration Act and whether the absence of such registration renders the document inadmissible in evidence. This question has to be answered after a due consideration of the nature of the document itself and also of the circumstances under which it happened to be executed and delivered.