Patna High Court
United Bank Of India Ltd. vs Lekharam Sonaram & Co. And Ors. on 12 March, 1958
Equivalent citations: AIR1958PAT472, AIR 1958 PATNA 472
JUDGMENT S.C. Prasad, J.
1. This is an appeal directed against the judgment of the Subordinate Judge of Hazaribagh decreeing the suit of the appellants which they had filed on the basis of an equitable mortgage alleged to have been created by the respondents on the 11th August, 1945 to secure advances made by the appellants to the respondents up to the limit of Rupees one lac as over draft from them to enable the respondents to carry on their business of mica.
It was alleged that this mortgage was created by deposit of two title deeds on the aforesaid date at Calcutta by defendant No. 4 with the letter of authority dated 9-8-1945 (Exhibit 7a) addressed by defendant No. 2 to the Bank authorising defendant No. 4 to deposit the title deeds with a view to create an equitable mortgage on the properties, the subject-matters of those title deeds, to make the advances by the Bank in the account of Messrs Lekharam Sonaram and Co. of Giridih, defendant-respondent no. 1, secure, declaring that he was "the sole owner of the Giridih Property as per schedule below", that the properties of the title deeds to be deposited were free from all incumbrances, nobody else having any claim, right or title to them. There was also the declaration as follows':--
"And I hereby declare that the deposit will give you a valid title over my said properties as mortgagee until all the obligations of Messrs. Lekharam Sonaram and Co. with your Giridih branch are duly satisfied."
2. It appears that on 10-8-1945 Sonaram, defendant No. 3, brother of defendant No. 4, addressed a letter to the manager of the appellants authorising defendant No. 4, his younger brother, to deliver the title deeds to the manager for deposit and to negotiate further in this respect. This letter is Exhibit 7(b).
On the 11-3-1945, a letter (Exhibit 12) was written by Babulal Ram, defendant No. 4, addressed to the manager of the Bank mentioning that he was placing on record that he had that day deposited with the manager at the Head Office of the appellants at 86 Clive Street, Calcutta, the documents of title relating to his Giridih properties with the intent to create an equitable mortgage upon all "my rights, title and interest in the said properties to secure due repayment on demand of all moneys now owing or which shall at any time hereafter be owing from me or from M/s Lekharam Sonaram and Co. either' singly or jointly or otherwise to Bengal Central Bank Limited, whether on balance of account or by discount or otherwise in respect in any manner whatsoever and including interest with monthly rests commission and other Banking charges and any law costs incurred in connection with the account. I do hereby put on record that the properties mentioned below are free from all encumbrances". Then there is a schedule of the documents, i.e. the two title deeds, one of 17-9-1927 and the other of 13-12-1937.
3. It was alleged by the appellants that the defendants were members of a joint Hindu Mitakshara family of which defendant No. 2 was the karta and manager. These defendants had several firms dealing in mica and also in cloth and for that purpose they had got a sanction for an over-draft account with the appellants' Branch Office at Giridih up to the limit of Rupees one lac and had operated on this account from the 2-6-1944 to 27-11-1948 with shifting balances.
During the course of the transactions on the 25-6-1947 the defendants were alleged to have executed a deed of hypothecation of debts and assets for overdraft up to Rupees one lac as a security for payment to the appellants on demand of the balance of the over-draft account with interests at 6 % per annum. The other documents executed by the defendants on that date were renewals of the pronote, the letter of lien, letter of continuity and deed of hypothecation of goods by executing fresh documents as a collateral security for the overdraft. On 24-6-1944, the defendants respondents had executed a deed of hypothecation of their stock of mica.
4. We are not concerned with these transactions in this appeal. The real transaction is of the 11-8-1945, which has already been mentioned above. The appellants have further alleged that they made advances from time to time on the over-draft account on the security of the equitable mortgage and received payments, leaving on 31-3-1949 a balance of Rs. 31088/13/5 including interest.
Later on, some dispute arose between the other creditors of the respondents and the appellants and they thought that it was just and convenient that a Receiver be appointed forthwith for immediate realisation of the sale-proceeds of the stock of mica and that the plaintiffs should get a mortgage decree for the sale of the immoveable properties mortgaged with the appellants by the aforesaid mortgage. Accordingly, they filed the suit for the aforesaid amount.
5. The respondents raised several points in defence. We are concerned here with the main points which are that according to the defence the title deeds had not been deposited at Calcutta with a view to create any equitable mortgage, that Exhibits 7(a), 7(b) and 12, which I have mentioned above, created equitable mortgage themselves and as these had not been registered the mortgage was not valid and no mortgage decree could be passed in favour of the appellants.
The other points were that the respondents were not joint, that they had separated and, therefore, they were not bound by these transactions and that some or the payments made by the Bank from the cheques issued by the defendants were not realisable from them; because they had countermanded those payments, but in spite of this, the Bank had cashed those cheques. The genuineness of the aforesaid three letters (Exs. 7a, 7b and 12) was also challenged.
6. The learned Subordinate Judge found that the defendants were joint, that defendant No. 2 was the karta, that the transactions were binding on the respondents, that the payments on the cheques by the appellants were binding on the respondents, that the three letters were genuine and had been signed by defendants NOS. 2, 3 and 4, respectively. He, however, was of the view that the letters required registration, because they contained the terms of agreement regarding the mortgage and, therefore, for want of registration no valid mortgage had been created. Accordingly, he gave a money decree to the appellants against these respondents for Rs. 31,000 and odd with future interest at 6 % per annum. He also decreed the claim regarding the appointment of Receiver.
7. The appellants, Bengal Central Bank, have grievance against the finding of the learned Subordinate Judge against them on the point of validity of the mortgage. Other facts found by the learned Subordinate judge have not been challenged in appeal before us, no cross-objection having been filed.
8. Now, under Section 58 (f) of the Transfer of Property Act mortgage by deposit of title deeds is created when a person in. the towns mentioned in the section, one of which is Calcutta, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon; such a transaction will be a mortgage by deposit of title deeds. It is thus clear that the intention that the title deeds shall be the security for the debt is the essence of the transaction and in order to infer this intention it may not be sufficient to rely on the mere fact of the title deeds being in possession of the creditor.
There ought to be evidence as to the manner in which the possession came into being in order to enable an inference to be made that this deposit was with a view to create a security for the debt. In law, it is not necessary that there should be a writing for creating a mortgage of this nature, but as a matter of practice usually such deposits are accompanied by memoranda in writing and it is this fact which has created a good deal of difficulties in the shape of construing these memoranda for the purpose of deciding whether they themselves formed the contract constituting the bargain between the parties or whether they were merely evidential in nature. A large number of cases have cropped up and the authorities are by no means easily reconcilable. Even so, an examination of the authorities cited does result in the emergence of certain well-defined principles of law on this question.
9. The earliest case cited in this connection is the case of Dwarkanath Mitter v. S. M. Sarab Kumari, 7 Beng LR 55 (A). The letter in that case had been written after the debt had been incurred and had been sent along with the title deeds to the creditor, so that without that letter there was nothing to attach the debt which had been incurred to the deposit of the deeds. In such circumstances it was held that the letter required registration.
10. The next case, in point of time, is that of Kedarnath Dutt v. Shamloll Khettry, 11 Beng LB 405 (B). In this case it was held that the memorandum did not require registration. The memorandum was an endorsement on the promissory note by which Rs. 1200/- had been advanced to the debtor. The endorsement mentioned that for the repayment of this loan the latter had deposited the title deeds with the creditor as a collateral security by way of equitable mortgage.
It wag held that this endorsement wag only a recital of the fact of the deposit from which the contract of the mortgage could be inferred. In other words, this was merely evidential in character. This memorandum was not of such a nature that it could be treated as the contract for the mortgage and what the Parties had considered to be the only repository and appropriate evidence of their agreement, only in which case this memorandum in the shape of this endorsement could have required registration to create valid mortgage.
11. In Bhairab Chandra Bose v. Anath Nath De, 24 Cal WN 599 : (AIR 1920 Cal 312) (C) it was found that the title deeds had been deposited by the letter in question and the money had been paid after the letter had been written and the letter contained the recital that the title deeds, regarding the property already deposited with the creditor, would be held as collateral security. The title deeds, as it appeared, had been actually deposited previously for other mortgages and it was on the later date that fresh loan had been taken and this letter was written. In these circumstances and upon those facts it was held that this letter required registration. Dwarkanath's case (A) was followed in this case and Kedarnath Dutt's case (B) was distinguished.
12. The next case of the Calcutta High Court is reported in Ebrahim Hazi Ismail v. Official Trustee, AIR 1937 Cal 741 (D). In this case the letter written by the mortgagor to the mortgagee mentioned that the mortgagor had deposited certain title deeds with the mortgagee as a collateral security for the due payment of the loan. The letter embodied the terms of the loan on which the interest was to run at the rate of Rs. 3000/-per month from and after the expiry of 90 days from the date of this letter until realisation. The borrower also undertook to deposit with the creditor otter title deeds relating to the properties and if any of those happened to be not with him he would procure them if possible or else account for them.
It was held upon the basis of these facts that the letter required registration inasmuch as it was this document which created the mortgage. It was pointed out that everything depended upon the memorandum in writing which in each case was to be construed as to whether the writing was merely a statement of the fact evidencing the mortgage or it by itself created the hypothecation. If the writing explained the reason why the deed was deposited, and there was nothing but the writing to connect the deposits with the deed, the writing must be registered.
13. Another case of the Calcutta High Court is reported in Ram Ratan Das v. Mt. Sew Kumari Bibi, AIR 1938 Cal 823 (E). The report does not contain the memorandum and the terms thereof but this is an authority for the proposition based on Sundara Chariar v. Narayana Ayyar, 58 Ind App 68 : (AIR 1931 PC 36) (P), to be noticed presently, that in arriving at a conclusion on the question whether a particular memorandum relating to a deposit of title deeds for creating mortgage, the circumstances under which that document came into existence and passed into the hands of creditors should also be considered.
14. Some cases decided by the Madras High Court have also been cited by the parties before us. The earliest of these authorities is reported in Swami Chetty v. Ethirajulu Nayudu, ILR 40 Mad 547 : (AIR 1917 Mad 773) (G). In this case an equitable mortgage had been effected by deposit °f title deeds with a third person. Subsequently the plaintiff had agreed with the defendants, by executing a promissory note to the defendant, that the latter should pay off that mortgage and recover the title deeds from their present mortgagee and retain them with himself as additional security.
These terms of agreement were embodied in the documents which were not registered. It was held that these were inadmissible in evidence and they required registration under section 49 of the Registration Act. It was observed that the answer to the difficult question of whether a document executed contemporaneously with a mortgage by deposit of title deeds required registration would be the answer upon the effect of the document itself, that is to say, whether it was a mere narrative of facts constituting the mortgage or whether it set forth the terms of the contract in such a way that these terms, could be said to have been reduced in the form of a document.
It was recognised that the distinction was a very narrow one and to illustrate this point, the two cases, 7 Beng LR 55 (A) and 11 Beng LR 405 (B), were referred to in contrast. In this particular case it was pointed out that the two documents came within the latter category and therefore, required registration.
15. The next Madras case is reported in Krishnayya v. Ponnuswami Ayyar, ILR 47 Mad 398: (AIR 1924 Mad 547) (H). In this case the document had come into existence subsequent to the creation of the charge and merely recorded it and the learned Chief Justice who decided the point very strongly referred to the fact that this document was worded in the past tense. In these circumstances it was held that this document did not require registration.
16. In Arunachallam Chetty v. Jagannatha pillai, AIR 1926 Mad 1188 (I), the above Madras case was referred to and distinguished. In this case, which was decided by a single Judge, the memorandum contained the recital that the debtor had agreed to deposit the title deeds by way of equitable mortgage to secure the mortgage with interest covered by a promissory note which had been executed by him a day earlier and the next day the debtor sent the title deeds along with a letter saying that he was sending the deeds with the intention of depositing the same with the creditor, according to the memorandum mentioned above, sent a day earlier.
Upon these facts it was held that this document required registration. The learned Judge relied upon the Privy Council ruling reported in Subramanian v. Lutchman, ILR 50 Cal 338: (AIR 1023 PC 50) (J), and he felt bound to follow this authority though his attention was invited to another ruling of the Madras High Court reported in Muthiah Chetty v. Kothandaramaswami Naidu, 35 Ind Cas 864: (AIR 1917 Mad 799) (J1) which was somewhat in conflict with this Privy Council decision.
17. Another ruling of the Madras High Court reported in Ramanathan Chettiar v. Dow-
lat Singjee Thakore, AIR 1938 Mad 865 (K), was also referred to in this connection. The memorandum in this case simply said that the debtors had pledged, as agreed upon in writing with the creditors, the (sic.) properties mentioned in this memorandum. Thereafter, the three properties were described. It was found that the creditor had advanced moneys in pursuance of an oral agreement to the debtors and certain title deeds were deposited subsequently creating an equitable mortgage on some property in consideration of those sums advanced and later on this memorandum was written out.
It was held that this did not require registration. This ruling also emphasises the fact that one of the easiest guides in determining the question whether the memorandum constituted the bargain or not was the question where any amount had been advanced before the making of the payment, because if the amount had been advanced contemporaneously with or in exchange for the document or after the document, it would be very difficult to establish, that the document did not contain the terms of the bargain between the parties.
18. The last case of the Madras High Court cited is Visalakshi Ammal v. Krishnaveni Ammal, AIR 1940 Mad 671 (L). In this case the mortgagor had borrowed the money on a promissory note, and as security had deposited the title deeds of certain property. At the time of the deposit, the debtor signed and delivered to the creditor a letter in which he stated that he had received the loan and for that sum he had deposited with the mortgagee, as security, title deeds relating to certain property.
He added, however, the following sentence, "At the time when I discharge the aforesaid bond, I shall take back this letter as well as the aforesaid title deeds," and concluded with the statement, "to this effect have I executed this collateral letter with consent." This memorandum was in many respects similar to the memorandum which had been held not to require registration by the same High Court in the case already noticed above, namely, ILR 47 Mad 398: (AIR 1924 Mad 547) (H), but that was distinguished on the ground that in this case the further fact found was that in a later mortgage deed obtained by the mortgagee from the mortgagor, this memorandum had been described not only as a collateral security but as the security for the loan.
It was held in these circumstances that the parties must be held not to have contemplated merely a record of the completed transaction but an operative instrument. In other words, this memorandum was taken as constituting the bargain between the parties and operating to declare the rights of the mortgagee and, therefore, required registration.
19 Three authorities of the Privy Council reported in 50 Ind App 77 : (AIR 1923 PC 50) (J), 58 Ind App 68 : (AIR 1931 PC 36) (P), and Hari Sankar Paul v. Kedarnath Saha, 66 Ind App 184 : (AIR 1939 PC 167) (M), were also relied upon and finally the ruling of the Supreme Court of India reported in Rachpal Mahraj v. Bhagwandas, AIR 1950 SC 272 (N).
The aforesaid Privy Council authorities have been referred to and relied upon in some of the cases of Madras and Calcutta High Courts discussed above and the Supreme Court of India in the above case has observed that two rulings of the Privy Council, namely, 58 Ind App 68 : (AIR 1931 PC 36) (F) and 66 Ind App 184 :
(AIR 1939 PC 167) (M), aptly illustrated cases falling on either side of the line taken by the numerous decisions on this point, some of which were not easy to reconcile where this question had been considered with reference to the documents concerned in those particular cases. Patanjali Shastri, J., observed in the above case, as follows:--
"A mortgage by deposit of title deeds is a form of mortgage recognised by Section 58 (f), T. P. Act, which provides that it may be effected in certain towns (including Calcutta) by a person 'delivering to his creditor or his agent documents of title to immovable property with intent to create a security thereon'. That is to say, when the debtors deposits with the creditor the title deeds of his property with intent to create a security, the law implies a contract between the parties to create a mortgage, and no registered instrument is required under Section 59 as in other forms of mortgage.
But if the parties choose to reduce the contract to writing, the implication 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. As the deposit alone is not intended to create the charge and the document, which constitutes the bargain regarding the security, is also necessary and operates to create the charge in conjunction with the deposit, it requires registration under Section 17, Registration Act, 1908, as a non-testamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees and upwards.
The time factor is not decisive. The document may be handed over to the creditor along with the title deeds and yet may not be registrable, as in 58 Ind App 68 : (AIR 1931 PC 36) (F). Or, it may be delivered at a later date and nevertheless be registrable as in 66 Ind App 184: (AIR 1939 PC 167) (M). The crucial question is: Did the parties intend to reduce their bargain regarding the deposit of the title deeds to the form of a document? If so, the document requires registration.
If, on the other hand, its proper construction and the surrounding circumstances lead to the conclusion that the parties did not intend to do so, then, there being no express bargain, the contract to create the mortgage arises by implication of the law from the deposit itself with the requisite intention, and the document, being merely evidential does not require registration."
The following observations of the Privy Council in the two cases 58 Ind App 68 : (AIR 1931 PC 36) (F), and 66 Ind App 184 : (AIR 1939 PC 167) (M), were also quoted with approval :
"No such memorandum can be within the section (Section 17, Registration Act) 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". 58 Ind App 68 at p. 74 : (AIR 1931 PC 36 at P. 39) (F).
"Where, as here, the parties professing to create a mortgage by a deposit of title deeds contemporaneously enter into a contractual agreement, in writing, which is made an integral part of the transaction, and is itself an operative instrument and not merely evidential, such a document must, under the statute, be registered." 66 Ind App 184 at p. 197 : (AIR 1939 PC 167 at p. 170) (M)."
20. It was pointed out that in the former case the memorandum stated, "As agreed upon in person, I have delivered to you the under mentioned documents as security'' and then there was the list of the title deeds so deposited. It was held that the memorandum was merely a record of the particulars of the deeds and did not require registration, In this case the Privy Council examined the observation made by Lord Carson who had delivered the judgment of the Court in 50 Ind App 77 : (AIR 1923 PC 50) (J), and then laid down the criterion contained in the observations quoted above. In Subramonian's case the document contained the recital, inter alia, "this please hold as security on advances made to us". In this circumstance of the case it was held that this memorandum embodied the agreement between the parties.
21. In 66 Ind App 184 : (AIR 1939 PC 167) (M), the memorandum had been handed over along with the title deeds when some part of the advance had also been made. Some days later when the balance was advanced another memorandum was delivered superseding the earlier one. This second document was a formal and elaborate one reciting the essential terms of the transactions.
The memorandum then proceeded to set out that it was hereby agreed between the parties that in consideration of the two sums advanced before the execution of the memorandum the title deeds describing the schedule shall be held by the mortgagees as security for the payment by the mortgagors to the mortgagees and for other charges and expenses of and incidental to any proceeding which may be had for the protection of the security or for procuring or obtaining or attempting to obtain payment of the moneys hereby secured. It was held that this document was a contractual agreement in writing which was in itself an operative instrument and not merely evidential. Consequently this required registration.
22. The principles deducible from a careful study of the aforesaid authorities may be formulated as follows :
(a) Mortgage by deposit of title deeds may be oral and no writing is necessary, the only requirement being that the debtor should deposit with the creditor the title deeds of his properties with intent to create a security. This by itself will imply a contract between the parties to create a mortgage. In order however to obviate a possible defence that the deeds were left with the creditor for other purposes, usually a writing accompanies or is sometimes or other handed over to the creditor by the debtor,
(b) Where such a writing is taken to connect the deposit with the charge, it will depend upon the intention of the parties whether this writing is to be merely evidence of the security for the loan or is to be an integral part of the transaction. If it is the latter, it must be registered and no other evidence for this mortgage will be admissible.
(c) In order to determine the intention of the parties it will be necessary to look into the terms embodied in the writing, the time, the place and the circumstances under which it was signed and delivered by the debtor to the creditor. One of the circumstances may be, for instance, the fact that the writing accompanied the deposit of the title deeds and was contemporaneous with the advance of the money. Another circumstance may be the negotiation and the manner thereof preceding the deposit of the title deeds and the delivery of the memorandum.
Still another circumstance may possibly be the fact that subsequent to this transaction the parties had done something which indicated that they had always treated this writing to be a part of the transaction of this mortgage. All these and many more of such circumstances will enter into the judicial consideration for arriving at a conclusion in respect of the intention of the parties. Some of the cases noticed above illustrate the nature of those circumstances which have to be taken into consideration in this connection. Anyone of these circumstances will not by itself be a decisive factor but the cumulative effect of all or some of these factors may be so in a particular case.
(d) The recitals in the memorandum themselves are the first thing to be considered in determining the intention of the parties. Sometimes a single word or sentence used by the debtor in the memorandum may turn the scale one way or the other.
23. Bearing these principles in mind, I now proceed to examine the three letters in this case. It may be mentioned that the oral evidence adduced by the parties in this case is not of much help to give us circumstances under which these writings came to be delivered to the Bank of Babulal, defendant No. 4, but this much is clear that the documents and the letters were handed over to the Bank at Calcutta along with the title deeds by Babulal, who signed the deposit register of the Bank, which has been produced in this case.
One of the witnesses (P. W. 3) of the Bank had admitted in his evidence that there were letters in the Bank regarding the negotiation which had preceded these transactions. He has further admitted that the negotiations were going on regarding the deposit for sometimes between the parties. These letters have not been produced and we have no evidence as to what was the nature of that negotiation. P. W. 4, another witness of the Bank, has, however, admitted that the Bank had asked the defendants-respondents that unless the title deeds were deposited in equitable mortgage, the Bank would not continue the over-draft account any longer.
It is clear from the evidence that the Bank had already advanced some money and after the deposit of the title deeds they advanced some more money to the defendants-respondents. It is also clear from paragraph 10 of the plaint that Babulal, defendant No. 4, had deposited the title deeds along with a letter of authority from defendant No. 2. That letter of authority is, therefore, the most important document in this case and it will depend upon the nature of this document and the recitals therein whether or not this letter required registration upon the principles set forth above. It is true that defendant No. 4 had written out Exhibit 12 on 11-8-1945 at Calcutta placing on record the fact that he had deposited the title deeds with the Manager of the Bank with intent to create an equitable mortgage, but this document cannot be read independently of Exhibit 7 (b), which was the letter of authority by Lekhram, defendant No. 2, authorising Babu Lal, defendant No. 4, to deposit these deeds.
Moreover, in this document (Exhibit 12) Babulal has recited something different inasmuch as he says that he had deposited the deeds with intent to create an equitable mortgage upon all his rights, title and interest of the properties. He was the junior member of the family. It was defendant No. 2 who was karta and who had authorised Babulal to deposit the deeds to the Bank on behalf of himself and, therefore, this document (Exhibit 12), in my opinion, cannot be dissociated from the other documents as if it were a separate transaction and was the memorandum in relation to creation of the mortgage by deposit of title deeds.
The second letter (Exhibit 7-b) written by Sonaram, defendant No. 3, elder brother of Babulal, is also of not much consequence except that thereby he authorised his brother, Babulal, to deliver the title deeds to the Bank. It is true that in this letter it has been stated that Babulal was to negotiate further with the Bank, but that also is not of much importance and the subsequent events show that the negotiations perhaps took no other shape except that Babulal carried the deeds with the letter of authority (Exhibit 7-a) and handed over the deeds to the Bank signing the deposit register of the Bank and writing out the letter (Exhibit 13).
It is clear beyond any doubt that this Exhibit 7 (a) written by defendant No. 2, Lekharam, is the principal memorandum relating to the deposit to create this mortgage. The whole case, therefore, will depend upon the nature of this document. This letter (Exhibit 7-a) runs as follows :
"I hereby authorise my son Mr. Babulal Ram to deposit with you on my behalf at your Calcutta Office the following Title deeds with a view to create an equitable mortgage on the said properties to make your advances in the A/O of Messrs. Lekharam Sonaram & Co., Giridih, better secured. I hereby further declare that I am the sole owner of the Giridih property as per schedule below and am legal joint heir with my sons dealing in the name of M/s. Lekharam Sonaram & Co. of the Malho property as described in the schedule below.
I hereby further declare that both the properties described in the schedule are free from all encumbrances and nobody else has any claim, right or title to the properties. And I hereby declare that the deposit will give you a valid legal title over my said properties as mortgagee until all the obligations of the M/s. Lekharam Sonaram & Co. with your Giridih branch are duly satisfied."
24. I am unable to hold that this letter was merely intended to be an evidence of the deposit of title deeds and was not meant to an integral part of this transaction between the parties.
Lekharam declares in this letter that this deposit of the title deeds will give the Bank a valid legal title over the properties which were the subject-matter of the deeds as mortgagee and this title was to remain in existence until all the liabilities of the debtor were satisfied. Such a recital ordinarily finds place in a formal document which is intended by itself to create the right in favour of the mortgagee.
I have, therefore, no doubt in my mind that this document (Exhibit 7-a) required registration and since admittedly it is not registered, no other evidence of the mortgage is admissible and consequently the appellants cannot prove that they had a mortgage of the properties and that the amount claimed by them was secured by this mortgage so as to enable them to claim a mortgage decree against the respondents. I think that the learned Subordinate Judge has rightly disallowed this claim, giving the appellants merely money decree.
25. The result, therefore, is that the appeal is dismissed with costs.
S.C. Misra, J.
26. I agree to the order proposed.