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(i) right to sell the property in case of default in payments;
(ii) continued security of the property for the amount due;
(iii) right to appoint a receiver at any time; and
(iv) exercising any other rights conferred, etc. Hence, it was not an instrument to deposit title deeds but it was a mortgage deed. Hence, the document would be liable to Stamp Duty as mortgage deed under Article 40 of the Stamp Act. A detailed report was submitted by the Deputy Accountant General.

2. On the basis of the said report, the instrument was impounded and the matter was referred to the Collector, Broach, for deciding the true nature of the said instrument and also for determining the proper amount of Stamp Duty leviable thereon and for taking suitable further action in that behalf.

14. Similar question is considered by the Special Bench of the Bombay High Court in Re The Indian Stamp Act, 1899 AIR 1954 Bombay 462. After considering the definition of 'mortgage deed' in Section 2(17) of the Indian Stamp Act, 1899, the Court observed that the Stamp Act makes no distinction between a legal and an equitable mortgage. But the Legislature has provided that although a document may be a mortgage deed, if it falls within the special class of documents referred to in Article 6 then it would be looked upon as an agreement relating to the deposit of title deeds and not a mortgage deed and the stamp duty payable will be under Article 6 and not under Article 40(b). The Court held that it is Clear that what was intended by Article 6 was a document which should merely contain the bargain between the parties with regard to the deposit of title deeds and conditions subsidiary or ancillary to the deposit of title deeds. But the document which contains all the provisions which one would normally find in a mortgage deed, then the mere fact that the document also contains the bargain with regard to the deposit of title deeds would not make it an agreement for the deposit of title deeds. After considering the document, the Court observed as under:

In our opinion, it is clear that this is by no means a simple document, it is a most elaborate document, and by this document the mortgagee has acquired rights which are proper to a legal mortgage and not to a memorandum of deposit of title deeds. We, therefore, agree with the revenue authorities that the document falls under Article 40(b) and not under Article 6.
Further, dealing with the similar conditions mentioned in the document, in the case of Chief Controlling Revenue Authority v. Jawahar Mills Ltd. AIR 1967 Madras 1, the Full Bench of the Madras High Court observed that the recitals in the document create, by their own force, a mortgage in favour of the Indian Overseas Bank Ltd., in respect of all the properties of Schedules A and B, quite apart from the deposit of title deeds under Schedule B. The Court held that the recitals such as 'the properties shall remain as continuing security for the amount due to the mortgagee', in the document, created by their own force a mortgage in favour of the mortgagee quite apart from a deposit of title deeds of the terms of the bargain of such deposit and the stamp duty for such document was payable under Article 40(b) and not under Article 6(2)(a). Similar are the recitals in the instrument in question.

15. In view of the aforesaid discussion, in our view, the Collector was right in arriving at the conclusion that the instrument was required to be charged under Article 40 of the Stamp Act and not under Article 6.

16. However, Mr. Gandhi, learned Advocate appearing on behalf of the respondent, submitted that it is merely an agreement covered by Article 6 and not a mortgage deed because no new rights are created by the said document and only existing rights are confirmed by the said document. He relied upon the decision of the Allahabad High Court in the case of State v. Willard India Ltd. . In that case, the Court was required to consider the document relating to inter se rights of financial institutions from whom the company had received loan, in regard to the joint securities. The Court held that the document was not a mortgage deed falling under Article 6, but it was an agreement. The Court relied upon the decision of the Chief Controlling Revenue Authority. Madras v. Pioneer Spinner Private Ltd. and observed that the agreement in question could not fall under Article 6 as the company had deposited the title deeds in respect of the properties on May 31, 1974 with I.F.C.I. The document referred to the original proposal and also contained a list of title deeds. In such a case, the Court held that the instrument is not an agreement relating to deposit of title deeds governed by Article 6 of the Stamp Act.