N V NAGESWARA AIYAR Vs. ALAGU SRINIVASA AIYANGAR

JUDGEMENT

(1.) The plaintiff sues upon an alleged equitable mortgage in his favour by Defendants 1 and 2. The other defendants are alienees from Defendants 1 and 2. The District Munsif gave a personal decree and declined to give a mortgage decree against the property covered by the equitable mortgage. The Subordinate Judge dismissed the suit on the ground that the equitable mortgage was not proved and that in consequence the suit was barred by limitation. The contention of Mr. Jagannadha Aiyar for the appellant is that the loans given by the plaintiff s father were covered by the deposit of title-deeds. Ex. C is a usufructuary mortgage deed executed by the defendant in favour of one Desikachariar for Rs. 200 on 13th July 1903. This document was deposited to cover the loan. Mr, Jagannadha Aiyar s contention is that this is a title-deed. I am unable to see how a mortgage-deed executed by the owner of a property in favour of a third person can ever be deemed to be a title-deed. A mortgage deed may be evidence of the fact that the mortgagor dealt with the property as his, but in no circumstances can it be considered that a mortgage-deed is the title-deed of the mortgagor. I, therefore, hold that there was no equitable mortgage created by Ex. C.

(2.) Ex. D is no doubt a title-deed and the evidence of P.W. 2 is that it was deposited on 15th January 1910. He has not been cross-examined on the point and the Subordinate Judge was not right in considering that the evidence did not make out a deposit of title-deed. An entry in the plaintiff s book, Ex. A5, shows, that the two loans of Rs. 350 were covered by the deposit of title deeds. Prom this evidence it is quite clear that Ex. D was deposited for the purpose of creating an equitable mortgage in respect of the loans already advanced.

(3.) The contention of Mr. Bashyam Aiyangar for the respondents is that there is no evidence as to under what circumstances Ex. D was deposited. But from the evidence and the circumstances it is clear that Ex. D was deposited to cover the loan already advanced. An equitable mortgage by deposit of title-deeds is created by the borrower depositing with the lender his title-deeds. All that is required to create an equitable mortgage in depositing the title-deeds with the lender is the intention of the lender being to hold them as security and the intention of the borrower to leave them as security with the lender. If there is any writing to evidence the transaction that would require registration, in the absence of registration any writing which embodies the transaction cannot be proved. Lord Cairns observes in Shaw v. Eoster [1872] 5 E and I 321.