P M A MUTHIA CHETTY Vs. PVKOTHANDARAMASWAMI NAIDU

JUDGEMENT

(1.) In this case the whole question is whether Mr. Justice Kumaraswami Sastri is right in refusing to admit in evidence a letter dated 17th February 1911 written by the 2nd defendant to the 1st defendant when the former deposited the titledeeds of his house with the latter in order to cover certain liabilities which he might incur in the course of business. The document is neither stamped nor registered and the learned Judge refused to take it in evidence on both these grounds. If the letter merely stated the terms on which the equitable mortgage was effected, I should be inclined to hold that it did not require any registration and should only be stamped on the basis of an agreement under Article 5 of the Stamp Act. It is the deposit of the titledeeds that creates an equitable mortgage and a letter or a writing which contains evidence of the transaction cannot be said to create or declare any right or interest in immovable property within the meaning of Section 17 Clause (b) of the Registration Act. In this connection therefore I agree with the ruling to this effect in Kedarnath Dutt v. Shamloll Khettry (1873) 11 B.L.R. 405 at 410, On Moung v. Noung Htoon Oo (1886) I.L.R. 13 C. 322 at 325 and Gokul Dass v. Eastern Mortgage and Agency Company (1905) I.L.R. 33 C. 410. But the real difficulty in the way of the appellant is that the letter goes much farther purporting in fact to create a simple mortgage. It says " I hereby give you full authority to make use of this property in any manner you think best and pay yourself up of these amounts and if there should be any balance still left unpaid, you shall be at liberty to proceed on me personally and on the rest of my other properties to recoup all the short balance." This satisfies all the requirements of a simple mortgage and could not be construed to be a recital of a mere equitable mortgage, for an equitable mortgage would not entitle the mortgagee to any personal remedy. On this ground alone, it must be held that the letter in question requires registration under Section 17 of the Act and being unregistered is inadmissible in evidence. If the letter be put aside, there is no other evidence that the titledeeds were handed over for the purpose of creating an equitable mortgage. The appeal will be dismissed with costs. Seshagiri Aiyar, J.

(2.) The 2nd defendant in this case is said to have mortgaged the properties in suit by depositing their titledeeds with the 1st defendant. The 1st defendant sub- mortgaged them with the plaintiff. There is no dispute now about the latter transaction. The question decided by the learned Judge and argued before us relates to the validity of the transaction between the 1st and 2nd defendants.

(3.) The plaint in paragraph 7 refers to a deposit of titledeeds, without more, on the 17th February 1911. To prove this deposit, a letter admittedly written by the 2nd defendant to the 1st defendant was sought to be put in evidence. The learned Judge rejected it as inadmissible. Upon this a witness was examined to prove the deposit. This witness only says "The titledeeds were handed over after the letter was signed by Kothandaramaswami Naidu," No question was put to him as to the purpose for which the deposit was made. The deposition as it stands is not enough to establish that an equitable mortgage was created under Section 59 of the Transfer of Property Act. Mr. A. Krishnaswami Aiyar admitted as much. It is clear that the learned Judge did not shut out any evidence. Consequently, if the letter is not admissible in evidence, the Judgment of the learned Judge must be upheld, as there is no independent evidence to prove the mortgage.