Andhra HC (Pre-Telangana)
Thota Venkata Narasamma vs S.V.M. Srinivasan on 25 July, 1996
Equivalent citations: 1996(3)ALT605
Author: K.B. Siddappa
Bench: K.B. Siddappa
JUDGMENT K.B. Siddappa, J.
1. This Revision is filed against the order passed in O.S.No. 382/89 on the file of Principal Subordinate Judge, Vijayawada.
2. The suit was filed on the basis of equitable mortgage by deposit of title deeds to realise the pronote amount. The said pronote was executed on 30-5-1983, for an amount of Rs. 50,000/-; towards security the defendant deposited the original title deeds of her property and thereby created equitable mortgage in favour of the plaintiff. The defendant also executed a memorandum of title deeds on 2-6-1983. During the trial when this memorandum was sought to be marked, objection was raised on behalf of the defendant that this memorandum is a transaction of mortgage under which the title deeds were deposited towards the debt amount. Therefore it is compulsorily registrable Under Section 17 of the Registration Act.
3. The learned Judge after considering both the sides and also the authorities cited before him came to the conclusion that it does not require any registration and the objection of the defendant was overruled as untenable.
4. Aggrieved by the said order the present Revision is filed by the defendant.
5. The learned counsel appearing for the Revision petitioner submitted that the memorandum is the instrument through which an equitable mortgage by deposit of title deeds is created. The title deeds were deposited on 30-5-1983 as security. The memorandum in question was executed on 2-6-1983 i.e., only two days after the said deposit. According to him, a plain reading of the memorandum would show that the parties intended to create equitable mortgage through this document. In such a case, it will not be received in evidence unless it is registered Under Section 17 of the Registration Act.
6. In support of his contention he relied upon a bench judgment of our High Court in Kakaracarthy Bhavanarayana v. Official Receiver, Krishna representing Estate of Sonti Venkataratnam, Chilakalapudi, Masulipatnum and Ors., . In the said case the memorandum read as follows:
"To Sri Kakaraparthi Bhavanarayana Sastri garu, Vijayawada. Letter executed by Sonti Venkataratnam, son of Kotaiah of Bezwada.
Myself and Tumu Subba Rao borrowed Rs. 13, 500/- on 4-5-51 and Rs. 1, 800/- on 13-8-51 on two promissory notes executed by us jointly in your favour at 12 per cent compound interest.
I now deposit the title deed of Sonti Venkataratnam among us relating to 1390 sq. yards of site in Municipal Ward No. 22, Revenue Ward 9, Block No. 18 T. S. No. 781-A dated 5-2-1948 as a collateral security for the payment of the money due on the two promissory notes referred to above inclusive of interest. I executed this document of security in your favour after assuring you that I never created any charge or encumbrance on the property covered by the title deed dated 5-2-48. Executed this 7th day of November 1951.
(Signed) Sonti Venkataratnam 7-11-1951."
On the above recitals the Bench held:
"That is how though a mortgage by deposit of title deeds can be created by mere deposit of the title deeds without any written contract between the parties but once the contract or the bargain as it is called between the parties is reduced to writing it cannot become effective unless the writing is registered".
It also held in the circumstances of the case:
"11. Here a deposit was made by a letter in which was mentioned why the document was deposited. There is nothing but the letter to connect the deposit with the debt. The letter does not show that it is merely evidential of something which either had already been done earlier or to be done in future. Therefore by Ex. A-7 the bargain was reduced into writing and it embodied the contract of the mortgage itself between the parties. If that is so, Ex. A-7 required registration and not having been registered it cannot be used in evidence at all and the transaction cannot also be proved by oral evidence either. Therefore the plaintiff cannot get a decree on the basis of the transaction. The suit on the promissory notes also having been barred by time and plaintiff cannot get any decree to recover the debt".
7. The learned counsel further submitted that the memorandum in question Is not a mere record of the past event but equitable mortgage is created through this memorandum. He also submitted that the intention of the parties has to be gathered from the circumstances of the case. He brought to my notice the averments in plaint in para 4. The plaintiff showed the date of mortgage as 2-6-1983, i. e., the date on which the memorandum was executed. In his submission, the plaintiff cannot go back now from the pleadings and say that the equitable mortgage was created on 30-5-1983 and the title deeds were deposited and the memorandum which was executed on 2-6-1983 was only a record of past event and cannot be treated as the instrument under which the mortgage itself was created.
8. On the other hand the learned counsel appearing for the respondent-plaintiff submitted that the document is silent with regard to the security sought to be created through the said document. The memorandum itself recites that the title deeds were also deposited. This indicates that the intention was only to record the past event. He submitted that the instrument does not indicate that the parties intended to create equitable mortgage through this document.
9. In support of his contention he relied upon a judgment of Madras High Court in H. G. Nanjappa v. M. F. C. Industries (P) Ltd., AIR 1987 Madras 108. The learned Judge considered various authorities including that of Supreme Court and Privy Council. He held that as a matter of fact the question whether a document in question was agreed by the parties as a part of arrangement to create a mortgage by deposit of title deeds has to be decided on the facts of each case. The learned Judge held:
"The question, therefore, which must be posed in a case like the present one is, did the parties intended to reduce their bargains regarding deposit of title deeds in the form of a document".
In his submission in the present case the intention of the parties is not to create equitable mortgage through this document and consequently it is not required to be registered Under Section 17 of the Registration Act. It is certainly admissible in evidence.
10. In the context and circumstances of the case I am unable to agree with the submission made by the learned counsel for the respondent. In this case, the pronote was executed on 30-5-1983 forasumofRs.50,000/-and titledeeds were also deposited. The memorandum was executed on 2-6-1983. The memorandum, in this case, reads as follows:-
"I borrowed Rs. 50,000/- from you on 30-5-1983 on a promissory note in favour of S.V.M. Sreenivasan for the business purpose of my third son, Thota Srinivasa Rao. I deposited the sale deed dated 15-10-1968 registered as document No. 3977 by 1968 of the Sub-Registrar, Vijayawada towards the said promissory note debt dated 30-5-1983".
The learned counsel appearing for the respondent tried to distinguish the present case on the words "I now deposit the title deeds of Sonti Venkataratnam....." as found in memorandum in Kakaraparthy Bhavanarayana case refered above (1 supra). According to him, the words clearly indicated in that case that the parties intended to create equitable mortgage through that document. But in the case on hand, those words were not mentioned. Therefore, it is a record of the past event.
11. This submission is not acceptable to me. There may be different words in the recital. But what is required is* to gather the real intention of the parties. In the memorandum of the present case, it is dearly mentioned that the documents were deposited "towards the said promissory note dated 30-5-1983". These words dearly indicate that they are creating the mortgage through this document. The intention of the plaintiff is quite dear from the plaint itself as contended by the learned counsel for the petitioner. In Para-4 of the plaint, the plaintiff himself indicated that the date of mortgage is 2nd June 1983. Obviously, he was referring to the memorandum. Therefore, the plaintiff cannot go back from the pleadings and say that the memorandum is only a past transaction.
12. In these circumstances, the memorandum is an instrument through which the mortgage was effected, even according to the plaintiff. Therefore, it should be registered Under Section 17 of the Registration Act, to give effect to it.
13. In the result, the Revision is allowed and in the circumstances, without costs.