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To create a valid mortgage by deposit of title deeds, there must be a delivery of the title deeds relating to an immovable property by the debtor, to a creditor or his agent, in a notified town with the intention to create a security thereon... An equitable mortgage of a property which lies outside the territories of notified towns, can be validly created by delivering the documents of title to the creditor or his agent in a notified town .... It is now well settled that no Memorandum or writing is necessary to create an equitable mortgage by deposit of title deeds. The equitable mortgage was complete by delivery of the documents with an intention to create security thereon. However, execution of a Memorandum or document in regard to deposit of title deeds is not prohibited.

(iii) In the decision Vijaya Ramakrishnan V. M.S.Aswath Narayana Shetty and another, 2010(2) MWN (Civil) 281 at special page 285, wherein it is laid down as follows:

22.It is to be pointed out that where a Deposit of Title Deeds takes place, it has to be ascertained in the usual manner. As a matter of fact the Territorial Restrictions referred to Section 58 (f) of the Transfer of Property Act has reference only to the delivery of the documents of title, and not to the situation of the property mortgaged. Once the mortgage has been created in a notified Town, the Registration of the Memorandum can be either at the town where the Equitable Mortgage has been created or in the office of the Sub-Registrar within whose jurisdiction, the mortgaged property is situated. However, as long as the Memorandum merely confirms an Equitable Mortgage already created in a notified town, the Registration of Memorandum even outside the notified towns, will be valid as per the decision STATE BANK OF MYSORE V SM ESSENCE DISTILLERIES PVT LTD & OTHERS, AIR 1993 KANT 359, at page 365.

24.It is to be remembered that the deposit of original document constitutes a security for recovery of money by the creditor and in view of Section 59 of the Transfer of Property Act would not require any registration, as opined by this Court. Moreover, if the document in question is a memorandum of an entry for creation of an Equitable Mortgage and had recorded that the concerned person had delivered and deposited the title deeds with the respondent with an intent to create security by way of Equitable Mortgage, such document is only a 'Memorandum' and not a contract to create a 'Mortgage' as the mortgage was already created by deposit of title deeds.

29.In the decision Nityananda Ghose V. Rajpur Chhaya Bani Cinema Limited reported in AIR 1953 Calcutta 208 at page 209, it is observed and laid down as follows:

In an equitable mortgage, the mortgagee has a right to sue for the mortgage-money within the meaning of S.68(1) (a) and further under such an equitable mortgage the mortgagor binds himself to repay the mortgage-money within the meaning of S.68(1)(a).

30.It is to be pointed out that although there is no Presumption of Law that the mere Deposit of Title Deeds constitute a mortgage, a Court may presume under Section 114 of the Indian Evidence Act, 1872 that under certain circumstances, a loan and a deposit of title deeds constitute a mortgage. Apart from that, a physical delivery of document by the Debtor to Creditor is not the only mode of Deposit, also there may be a Constructive Deposit. In fact, a Court of Law is to ascertain in a given case whether any subsists, there is a delivery of title deeds by the Debtor to the Creditor.