RAMCHANDRA LAXMAN Vs. BANK OF KOLHAPUR

JUDGEMENT

(1.) MR. Jathar who appeared before us for both has very ably and exhaustively argued the appeal and has urged before us all the points which could possibly be urged in favour of the appellants. The first contention which he urged before us was that the letter of lien dated December 16, 1944, was the sole repository and appropriate evidence of the transaction of equitable mortgage, that it was not registered and that therefore no equitable mortgage could be proved by the plaintiff Bank for want of registration of that document. The position in law with regard to the registration of memoranda of equitable mortgages is thus summarised in Mulla's Registration Act, 5th edn. , at p. 44 : "a mortgage by deposit of title-deeds does not require any writing, but it is usual for the mortgage to be accompanied by a memorandum in writing. In such cases the question often arises whether the writing requires registration. If the writing itself constitutes the bargain or contract between the parties and creates a mortgage on the property, it must be registered under the Registration Act. But if the mortgage was completed, by the deposit of title-deeds and the advance of money on such deposit, and the writing is merely a record of an already completed transaction, the writing does not require registration. The question in each, case is, did the document constitute a bargain between the parties or was it merely the record of an already completed transaction?"

(2.) OUR attention was drawn to several cases which lay down the true position in law with regard to registration of such documents, and our attention was first drawn to a decision of their Lordships of the Privy Council reported in 'hari SHANKAR v. KEDAR NATH', 66 Ind App 184 (PC ). Their Lordships of the Privy Council held in that case that where the parties professing to create a mortgage by deposit of title deeds contemporaneously enter into a contractual agreement to writing which evidences the deposit and contains all the essentials of the transaction, expressly conferring a power of sale on the mortgagee and in fact purports to be an instrument not merely evidencing the transaction already completed but by itself effective to create an interest in the property in favour of the mortgagee, such a document requires to be compulsorily registered. They quoted with approval the observations of Lord Carson in 'subramanian v. LUTCHMAN', 50 Ind App 77 at p. 32 (PC), where Lord Carson had approved of the position in law as laid down in 'kedar-NATH DUTT v. SHAMLOLL KHETTRY', 11 Beng LR 405 (PC) and 'pranjivandas MEHTA v. CHAN MA PHEE', 43 Ind App 122 at p. 125 and stated the criterion to be "did the document. . . . constitute the bargain between the parties or was it merely the record of an already completed transaction?" this passage from the judgment of Lord Carson had been commented upon by Lord Tomlin in 'sundarachariar v. NARAYAN AYYAR', 58 Ind App 68, and Lord Tomlin bad observed "while their Lordships do not think that the language of Lord Carson conveys or was intended to convey the meaning that no memorandum relating to a deposit of title deeds can be within Section 17 of the Indian Registration Act unless it embodies all the particulars of the transactions of which the deposit forms part, their Lordships are of opinion that no such memorandum can be within the section unless on its face it embodies such terms and is signed and delivered at such time and place and in such circumstances as to lead legitimately to the conclusion that so far as the deposit is concerned it constitutes the agreement between the parties. " this ratio was adopted by their Lordships of the Privy Council in 'hari SHANKAR v. KEDAR NATH', and they finally came to the conclusion that where contemporaneous with the creation of the mortgage by deposit of title deeds an agreement in writing was executed by and between the Parties which agreement was made an integral part of the transaction and was itself an operative instrument, and not merely evidential, such a document must be registered. In 'kedarnath DUTT v. SHAMLOLL KHETTRY', 11 Beng LR 405 (PC), the deposit was made in the morning and the memorandum was executed in the evening of the same day, and Couch C. J. in the course of his judgment observed :

(3.) THE position, therefore, in the case of documents which have been executed in relation to the creation of an equitable mortgage by deposit of title deeds is that if the document which is executed is the sole repository and appropriate evidence of the transaction, it would require registration and would be inadmissible in evidence for want of registration, for it is well-known that by virtue of the provisions of Section 91 of the Indian Evidence Act where the terms of a contract, grant or disposition of property are reduced to writing, no evidence can be given in proof of the terms thereof except the document itself or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions of the Act. If, however, the document merely records a transaction of equitable mortgage already completed, it does not create the equitable mortgage but is a record of an equitable mortgage already completed, land would not require registration. His Lordship, after dealing with points not material for the purposes of the report, continued :)