Telangana High Court
Smt. Kandala Pulamma vs Chennu Vijaya Venkata Lakshmana Kumar on 18 July, 2025
*THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
+ APPEAL SUIT NO.305 OF 2020
% 18--07--2025
# Smt. Kandala Pulamma
... Appellant
vs.
$ Chennu Vijaya Venkata Lakshmana Kumar
... Respondent
!Counsel for the Appellant: Mr.J.Ashvini Kumar
^Counsel for Respondent: Mr.Vedula Srinivas learned Senior Counsel
appearing for Mr.Seeta Ramaiah Tenneti
<Gist :
>Head Note :
? Cases referred:
AIR 1965 SC 1591
2014 (1) SCC 105
2015 (16) SCC 787
AIR OnLine 2013 AP 133
AIR 2016 Hyderabad 24
Indian Kanoon - http://indiankanoon.org/doc/107888899/
______________________________
B.R.MADHUSUDHAN RAO,J
2/14
BRMR, J
AS.No.305 of 2020
IN THE HIGH COURT FOR THE STATE OF TELANGANA
HYDERABAD
****
APPEAL SUIT NO.305 OF 2020
Between:
Smt. Kandala Pulamma
... Appellant
And
Chennu Vijaya Venkata Lakshmana Kumar
... Respondent
JUDGMENT PRONOUNCED ON: 18.07.2025
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? : No
2. Whether the copies of judgment may be
Marked to Law Reporters/Journals? : Yes
3. Whether His Lordship wishes to
see the fair copy of the Judgment? : Yes
_______________________________
B.R.MADHUSUDHAN RAO,J
3/14
BRMR, J
AS.No.305 of 2020
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
APPEAL SUIT NO.305 OF 2020
JUDGMENT:
1. This appeal is filed by the appellant aggrieved by the judgment and decree passed by the learned II Additional District Judge, Nalgonda, Suryapet in O.S.No.2 of 2014, dated 07.02.2020.
2. Appellant is the defendant and respondent is the plaintiff in the suit. For the sake of convenience, the parties will be hereinafter referred to as the plaintiff and the defendant.
3. The plaintiff has filed suit for recovery of amount of Rs.18,67,000/- and for preliminary decree directing the defendant to pay the suit amount by granting reasonable time for redemption of mortgage plaint schedule property, in the event of failure to redeem the mortgage property in accordance with preliminary decree, to pass a final decree for sale of mortgaged immovable plaint schedule property in terms of Order 34 of Code of Civil Procedure, 1908 for realization of decreetal amount with subsequent interest at the rate of 24% per annum.
4. The contention of the plaintiff in the plaint is that the defendant has borrowed an amount of Rs.15,00,000/- from him on 27.12.2012 for development of her business, executed a promissory note at Vijayawada in his favour and on the same day agreed to repay the 4/14 BRMR, J AS.No.305 of 2020 borrowed amount with interest at the rate of 24% per annum. The plaintiff has insisted for security, the defendant has provided the suit property i.e., two storied building constructed in an extent of 313 sq.yds bearing Door No.1-7-116/2/1 in Survey No.9, Ward No.9 of Suryapet Municipality within the boundaries by depositing the title deed dated 20.01.1996. The defendant has executed memorandum of deposit of title deed on 31.12.2012 in favour of the plaintiff. In spite of demands made by the plaintiff, defendant has failed to repay the amount.
5. Defendant filed her written statement contending that she neither borrowed any amount from the plaintiff nor created equitable mortgage of the scheduled property. Son of the defendant by name K.Ramakrishna Reddy is doing transport business at K.P.H.B. at Hyderabad and he got acquaintance with one Narendar Chowdary. The son of the defendant requested Narendar Chowdary to advance loan for his business needs, as Narendar Chowdary had no money with him he introduced one Ravikanth to her son. Son of the defendant through Narendar Chowdary obtained loan of Rs.6,00,000/- from Ravikanth, in turn he handed over two singed blank cheques and original registered sale deed No.88/1996 relating to the suit property. On 07.01.2013 the son of the defendant made part payment of Rs.4,12,500/- along with interest to Ravikanth and also paid remaining amount of Rs.2,00,000/- with interest on 5/14 BRMR, J AS.No.305 of 2020 29.01.2013 to Ravikanth through Narendar Chowdary. In spite of discharging the amount by her son, Ravikanth and Narendar Chowdary did not return the singed blank cheques and original registered sale deed which were kept with him as security and postponed to return the same. In the month of September 2013, the son of the defendant received phone call from Sheelam Govind Reddy claiming an amount of Rs.15,00,000/- otherwise the matter will be moved before the Court. The defendant never approached the plaintiff, nor she visited Vijayawada at any point of time. The defendant has sufficient agricultural properties, two buildings at Suryapet town and getting rents. The son of the defendant got issued legal notice on 18.12.2013 to Ravikanth and Sheelam Govind Reddy demanding them to return the cheques and original registered sale deed belonging to the defendant, after receiving the said legal notice the present suit came to be filed and prayed to dismiss the same.
6. The Trial Court basing on the pleadings of the parties has framed the following issues:
1) Whether the defendant borrowed Rs.15,00,000/- from the plaintiff on 27.12.2012 and executed demand Promissory note and created equitable mortgage of title deeds by executing a Memorandum of deposit of title deeds in favour of the plaintiff?
2) To what relief?6/14
BRMR, J AS.No.305 of 2020
7. Plaintiff got examined himself as PW1, also examined PW2 and PW3 in support of his contention, got marked Exs.A1 to A3. Defendant did not enter into the witness box.
8. The Trial Court after going through the evidence let by the plaintiff and perusing the documents passed a preliminary decree with costs directing the defendant to pay Rs.18,67,000/- with interest at the rate of 24% per annum on Rs.15,00,000/- from the date of suit till the date of preliminary decree with further interest at the rate of 6% per annum on Rs.15,00,000/- from the date of preliminary decree till actual payment. The defendant is given three months time for redemption. If the defendant failed to redeem the mortgage within the time given by the Court, the plaintiff is at liberty to apply for final decree. If the sale proceeds of mortgage property are not sufficient to recover the decree amount the defendant is personally liable for balance amount.
9.1 Learned counsel for the appellant submits that the appellant/ defendant had categorically denied the execution of the suit pro-note and the memorandum of deposit of title deeds as they are forged and fabricated documents. The learned Judge ought to have seen that the evidence adduced by the plaintiff clinchingly establish that there was no acquaintance between the appellant/defendant with that of respondent/plaintiff and no loan transaction has taken place. 7/14
BRMR, J AS.No.305 of 2020 9.2 The appellant/defendant has filed I.A.No.812 of 2013 under Section 45 of the Indian Evidence Act, 1872 to send the promissory note dated 27.12.2012 and the alleged memorandum of deposit of title deed dated 31.12.2012 to the hand writing expert for the purpose of comparison of signature, which was dismissed by the learned Judge vide order dated 12.04.2019, aggrieved by the same appellant/defendant has preferred the Civil Revision Petition before the High Court vide CRP.No.3159 of 2019 and the said CRP is pending, meanwhile the learned Judge has passed the judgment and decree. The appellant/defendant was deprived of the opportunity to send the disputed document for handwriting expert and the Court is competent to compare the signatures of the defendant under Section 73 of the Indian Evidence Act, 1872.
9.3 The memorandum of deposit of title deeds is compulsory registerable document under Section 17 of the Registration Act, 1908 but the learned Judge has erred and concluded that it is not required to be registered under Section 17 of the Registration Act, 1908. The suit filed by the respondent/plaintiff is not maintainable though the memorandum of deposit of title deeds was impounded by paying deficit stamp duty and it is not a curable defect, memorandum of deposit of title deeds is invalid and not admissible document. To substantiate his contentions, has relied on the following decisions: 8/14
BRMR, J AS.No.305 of 2020
(i) United Bank of India Ltd Vs. Messrs Lekharam Sonaram and Co.
and others 1, (ii) State of Haryana and Ors Vs. Navir Singh and Another 2, (iii) Yellapu Uma Maheswari & Anr Vs. Budda Jagadheeswararao & Ors 3, (iv) Golla Dharmanna Vs. Sakari Poshetty and Others 4, (v) Satti Venkateswara Reddy Vs. Mallidi Venkata Reddy 5 and (vi) V.Madhusudhan Rao and 7 Others Vs. S.Nirmala Bai and 4 Others. 6 Prayed to allow the appeal by set aside the judgment and decree in O.S.No.2 of 2014, dated 07.02.2020, passed by the learned II Additional District Judge, Nalgonda at Suryapet.
10. Lenard Senior Counsel for the respondent submits that the Trial Court has appreciated the evidence adduced by the respondent/plaintiff and the appellant/defendant has not entered into the witness box to substantiate her contention, no interference is called for and also relied on the decision cited by the learned counsel for the appellant in State of Haryana, prayed to dismissed the same.
11. Heard learned counsel for the parties and perused the record.
12. Now the point for consideration is: whether the impugned order suffers from any perversity or illegality and requires the interference of this Court or not?
1 AIR 1965 SC 1591 2 2014 (1) SCC 105 3 2015 (16) SCC 787 4 AIR OnLine 2013 AP 133 5 AIR 2016 Hyderabad 24 6 Indian Kanoon - http://indiankanoon.org/doc/107888899/ 9/14 BRMR, J AS.No.305 of 2020 POINT:
13. The Trial Court observed in paragraph No.16 of its judgment that "from 20.09.2019 to 18.10.2019 three adjournments were given to the defendant (appellant herein) for adducing evidence and after defense evidence was closed I.A.No.962/2018 was filed and the same was dismissed on 12.11.2019 and the matter is posted for arguments and later on the defendant filed another I.A.No.1023/2019 for reopening the case and the same was dismissed and later when the Court insisted the defendant to argue the case, on 30.12.2019 written arguments were filed. Further earlier the defendant (appellant herein) filed petition under Section 45 of the Indian Evidence Act to send the document, but however the same was not pressed later by the defendant. So, ultimately no defence evidence was adduced to prove the case of the defendant that the signature on Exs.A1 and A3 do not belong to the defendant (appellant herein)".
14.1. Ex.A1 is the promissory note dated 27.12.2012. Ex.A2 is the original registered title deed of the defendant dated 20.01.1996 pertaining to the mortgage property. Ex.A3 is the original memorandum of deposit of title deed executed by the defendant dated 31.12.2012.
14.2. The english translation of Ex.A2 reads as under: 10/14
BRMR, J AS.No.305 of 2020 "On 27.12.2012 I have obtained a sum of Rs.15,00,000/- (Rupees fifteen lakhs only) as loan from you and executed a promissory note. As a security to the said loan amount I hereby deposit my original title deed bearing Doc.NO.88/1996 regd, at SRO, Suryapet in respect of my residential house bearing D.No.1-7-116/2/1 admeasuring 313 sq. yards consisting two storied building with an intention to mortgage. This Memorandum is executed to show that the original document is deposited with you."
15. Learned counsel for the appellant strongly contended that Ex.A3 speaks that the executant intended to create a mortgage which is a compulsory registerable document and is hit by Section 17 of the Registration Act. Mere paying stamp duty penalty will not cure the defect.
16.1 It is essential to bear in mind that the essence of a mortgage by deposit of title deeds is the actual handing over by a borrower to the lender of documents of title to immovable property with the intention that those documents shall constitute a security which will enable the creditor ultimately to recover the, money which he has lent. But if the parties choose to reduce the contract to writing, this implication of law is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage. It follows that in such a case the document which constitutes the bargain regarding 11/14 BRMR, J AS.No.305 of 2020 securing require registration under S. 17 of the Indian Registration Act, 1908 : United Bank of India Ltd.
16.2. It is well settled that the nomenclature given to the document is not decisive factor but the nature and substance of the transaction has to be determined with reference to the terms of the documents and that the admissibility of a document is entirely dependent upon the recitals contained in that document but not on the basis of the pleadings set up by the party who seeks to introduce the document in question: Yellapu Uma Maheswari & Anr .
16.3. Mere paying stamp duty and penalty does not make an unregistered document admissible. An unregistered sale deed effecting immovable property cannot be admitted in evidence as per Section 49 of the Registration Act and it is compulsory registrable under Section 17(1)(b) of Registration Act, 1908 : Golla Dharmanna. 16.4. If it is a simple document depositing title deed as a security, it would not have required registration, but when authorised the lender to take action for recovery of money on the basis of such deposit of title deed coupled with Memorandum, it requires registration: Satti Venkateswara Reddy.
16.5. A document which is not stamped as required under law cannot be received in any evidence for any purpose, Section 35 of the Indian 12/14 BRMR, J AS.No.305 of 2020 Stamp Act, 1899 makes this very clear. However, this is a curable defect and if the stamp duty and penalty is paid thereafter, the document becomes admissible. The proviso to Section 35 of the Indian Stamp Act, deals with this : V.Madhusudhan Rao.
17. At the time of marking the document i.e., memorandum of deposit of title deeds through PW1, learned counsel for the appellant/defendant before the trial Court raised an objection that it was not registered and is liable for stamp duty. Respondent/plaintiff has paid the deficit stamp duty with penalty under Sections 33 and 44 of the Stamp Act and thereafter Ex.A3 came to be marked through PW1. The evidence of PW1 is the replica of the plaint averments and he stated that the mortgage deed is not registered, the son of the defendant has not signed as a witness. Prakash and Sathish are the attesters to pro-note (Ex.A1). Though PW1 was cross-examined but no incriminating material is elicited from his cross.
18. PW2 is the witness to Ex.A1, he deposed that the defendant after receipt of money executed the promissory note in favour of the plaintiff (respondent herein) and that the defendant (appellant herein) has deposited her original title deed dated 20.01.1996 as a security with an intension to create mortgage over the plaint schedule property for the debt due. In his cross-examination he stated that he has no objection to send the suit pro-note to the hand writing expert for 13/14 BRMR, J AS.No.305 of 2020 comparison for the hand writing. He denied the suggestion that he is giving false evidence that the defendant did not execute Exs.A1 and A3 and that the signatures do not belong to her.
19. PW3 is the another witness, who supported the evidence of PW2 in all aspects including deposit of original title deeds of the defendant (appellant herein). Though PW3 was cross examined by the defendant's counsel, nothing material could be elicited.
20. The primary arguments of the appellant's counsel is on Ex.A3 (memorandum of deposit of title deeds) that the document speaks the intent to create a mortgage by the appellant (defendant) in favour of respondent (plaintiff) and is hit by the Registration Act.
21. The Supreme Court in State of Haryana and Ors observed at paragraph No.11, which reads as under:
"11. A mortgage inter alia means transfer of interest in the specific immovable property for the purpose of securing the money advanced by way of loan. Section 17(1)(c) of the Registration Act provides that a non-
testamentary instrument which acknowledges the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extension of any such right, title or interest, requires compulsory registration. A mortgage by deposit of title deeds in terms of Section 58(f) of the Transfer of Property Act surely acknowledges the receipt and transfer of interest and, therefore, one may contend that its registration is compulsory. However, Section 59 of the Transfer of Property Act mandates that every mortgage other than a mortgage by deposit of title deeds can be effected only by a registered instrument. In the face of it, in our opinion, when the debtor deposits with the creditor title deeds of the property for the purpose of security, it becomes a 14/14 BRMR, J AS.No.305 of 2020 mortgage in terms of Section 58(f) of the Transfer of Property Act and no registered instrument is required under Section 59 thereof as in other classes of mortgage. The essence of a mortgage by deposit of title deeds is the handing over, by a borrower to the creditor, the title deeds of immovable property with the intention that those documents shall constitute security, enabling the creditor to recover the money lent. After the deposit of the title deeds the creditor and borrower may record the transaction in a memorandum but such a memorandum would not be an instrument of mortgage. A memorandum reducing other terms and conditions with regard to the deposit in the form of a document, however, shall require registration under Section 17(1)(c) of the Registration Act, but in a case in which such a document does not incorporate any term and condition, it is merely evidential and does not require registration."
22. The aforesaid decision cited by the appellant's counsel in fact assist the case of the respondent (plaintiff).
23. On close scrutiny of Ex.A3, I am of the firm view that the essence of mortgage by deposit of title deeds is the handing over by a borrower to the creditor, title deeds of immovable property with the intension that the documents shall constitute security enabling the creditor to recover the money lent.
24. The Trial Court observed at paragraph No.15 that "as can be seen from Ex.A3, in the same it is mentioned that the defendant borrowed Rs.15 Lakhs from the plaintiff and as a security for the same she deposited registered sale deed but there are no other terms in the same permitting the plaintiff to take action if the defendant failed to repay the borrowed amount. So, as per the decision reported 15/14 BRMR, J AS.No.305 of 2020 by the counsel for the defendant, as in the present case memorandum of understanding did not contain any term attracting the provisions of Section 17 of Registration Act, this Court is of the opinion that there is no need for registration of Ex. A3 as claimed by the counsel for the defendant."
25. I agree with the observations made by the Trial Court, in furtherance of the same, the decision of the Supreme Court in the case of State of Haryana is aptly applicable to the case on hand and hold that Ex.A3 does not incorporate any terms and conditions and the essence of Ex.A3 goes to show that it is by deposit of title deeds in handing over the document by a borrower to the creditor which constitute a security enabling the debtor to recover the money lent. The contention of the appellant's counsel that Ex.A3 is compulsory registerable document is negatived. The decision cited by learned counsel for the appellant stated supra at paragraph Nos.16.1 to 16.5 do not assist his case in view of the fact that the case facts referred above do not match with the case facts on hand.
26. Respondent/plaintiff could able to prove that the appellant/ defendant has borrowed the amount and executed Ex.A1/pro-note and deposited her registered title deeds under Ex.A3 which is supported with the evidence of PW1 to PW3 in all aspects. 16/14
BRMR, J AS.No.305 of 2020
27. Defendant did not enter into the witness box to prove her contention that she did not execute pro-note nor deposited her title deeds with the respondent/plaintiff.
28. I am of the firm view that the Trial Court has properly appreciated the evidence on record and rightly decreed the suit of the respondent/ plaintiff. There is no illegality or perversity in the judgment passed by the Trial Court and I am not inclined to interfere with the same. Hence, the point is answered accordingly.
29. A.S.No.305 of 2020 is dismissed.
Interim orders if any stands vacated and miscellaneous application/applications pending, if any, shall stand closed. There shall be no order as to costs.
________________________________ B.R.MADHUSUDHAN RAO, J 18.07.2025 Dua