SIR HARI SHANKAR PAUL Vs. KEDAR NATH SAHA

JUDGEMENT

(1.) The plaintiffs in this suit, now the appellants, seek to enforce a mortgage for the principal sum of Rs.25,000 with arrears of interest accrued. Their case is that the mortgage was effected by the delivery to them of the documents of title to certain immovable property in Calcutta with intent to create a security thereon. The general law in India under the Transfer of Property Act, 1882, is that a mortgage for a principal sum of Rs.100 or upwards can be effected only by a registered instrument duly signed and attested, but the validity of mortgages by deposit of title deeds in Calcutta and certain other places is expressly recognized and saved, doubtless because of the convenience of this form of security in commercial centres: see S.59 of the Act as it stood at the date of the transaction with which this case is concerned, and now, by amendment, S.58 (f).

(2.) That the title deeds of the property were deposited by the respondents with the appellants is not disputed, but the appellants were not content to rely only on this deposit. They insisted on the execution by the respondents of a memorandum of agreement "evidencing the said deposit and embodying the terms and conditions of the loan." The appellants found upon this memorandum in their plaint and the respondents in their written statement aver that this memorandum constituted the bargain between them and the appellants and they maintain that, inasmuch as it was not registered as required by Sec.17(1)(b), Registration Act, 1908, it is inadmissible in evidence and the mortgage is consequently unenforceable under S.49 of that Act. To this the appellants reply that the memorandum did not effect or constitute any transaction between the parties but merely recorded a transaction already completed; it therefore did not require registration, not being in the words of the statute, a non- testamentary instrument purporting or operating "to create, declare, assign, limit or extinguish . . . any right, title or interest... to or in immovable property." There have been numerous cases, some of which have reached this Board, in which a mortgage, alleged to have been effected by the deposit of title deeds, has been accompanied by a written document and in which the question has arisen whether that document was of such a character as to require registration. The decision in each case has turned upon the nature of the document in question. It will be sufficient to refer to one or two of the most recent of these cases.

(3.) In Sundarachariar V/s. Narayan Ayyar, (1931) 18 AIR PC 36 the title deeds of certain properties were handed over as security for a loan along with two written documents, viz. a promissory note for the total advance and a signed memorandum consisting of a list of the title deeds, prefaced with the names of the parties and these words: "As agreed upon in person I have delivered to you the undermentioned documents as security." In the view of their Lordships as expressed by Lord Tomlin, the memorandum was a document which merely records particulars of deeds the subject of a deposit ... it was and remained a list of the documents deposited and nothing more. It did not embody the terms of the agreement between the parties.