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4. The submission that a valid equitable mortgage can never be made without delivering the original title deed has to be rejected. Such original documents of title may, at times, be lost or destroyed due to natural causes like cyclones and fire-accidents. They may also be lost either by thefts or due to want of proper care and sometimes they would have been filed in courts and not taken return of in time. The owners of property who have so lost their documents of title will, therefore, be not in a position to deliver such original documents with intent to create an equitable mortgage. It will be rather anomalous if such persons can validly execute registered documents of sale, lease and mortgage, but will not be entitled to raise any monies by creating an equitable mortgage. If the original title deeds are lost, we do not see why the owner of the property should not be in a position to an equitable mortgage. The mortgagee in such cases has only to be vigilant in accepting such representation made to him and should make the necessary enquiries before agreeing to advance any monies on the basis of registration extracts of documents of title or copies of documents. That seems to be the underlying principle behind S. 78 of the T. P. Act which provided that if the conduct of a prior mortgagee amounted to gross neglect, the mortgage in his favour will be postponed to the subsequent mortgagee.

"I lost the registered document of the vacant site. So I took a duplicate copy of it in the year 1959. I have not pledged this site to anybody."

Ex. B-18 registration extract was obtained on 15-7-1959. When the 2nd defendant was cross-examined, he denied the suggestion made to him that Ex. A-2, the original title deed, was with the 1st defendant at the time Ex. B-20 was executed. Ex. A-2 was not deposited with anybody else prior to their borrowing any amount from the Bank. Ex. A-2 original document was handed over to Anjaneyulu and others during the year 1956, the lessees of the mill, for the purpose of writing a document and Ex. A-2 was returned to the defendants by the lessees in the year 1967. He denied the suggestion made that Ex. A-2 was deposited with the contractors of the rice mill by way of an equitable mortgage. According to him, defendants 1 and 2 represented to the Bank that it was the contractors who lost the original title deed, but the Bank officials did not enquire from the contractors. It is clear from this evidence that defendants 1 & 2 made a representation to be true and advanced monies on the basis of Ex. A - 18 registration extract. The plaintiff as P. W. 1 denied that he was informed by defendants 1 and 2 about the prior encumbrance in favour of the Bank at the time the equitable mortgage was created in favour of the plaintiff. In his cross-examination, however, it was elicited that the 2nd defendant was receiving finances from the State Bank, but the did not make any enquiry as to on what basis the Bank was financing defendants 1 and 2. When it was suggested that there was a board displayed by the Bank on the property that the property was pledged to the Bank, the plaintiff gave an evasive answer that he does not remember if it was so. One has to appreciate the evidence in the background of normal human conduct. Then a Bank advances monies, it is usual for the display of such board on the property intimating the public that the property is pledged to the Bank; Both Exs. A-2 and A-3 have reference only to vacant sites and have no reference to the machinery that has been set upon those sites. The plaintiff did not make any enquiry with the bank to know about their interest over the mill property. True, Exs. A-2 and A-3 original title deeds were delivered to the plaintiff, but those documents while establishing the title of defendants 1 and 2 to the site covered by the mill, do not have any bearing on the title of defendants 1 and 2 to the mill put up on that site. As between the two versions given by the plaintiff and 2nd defendant the 2nd defendant's evidence is in accord with the course of human conduct. We accept his statement that at the time the equitable mortgage in favour of the plaintiff was created, the plaintiff was in fact informed about the earlier equitable mortgage subsisting in favour of the Bank. It is accepted that "gross neglect" means and involves a failure on the part of the prior mortgagee to take such reasonable precautions against the risk of a subsequent encumbrance being deceived as in the circumstances renders it unjust that the earlier mortgage should retain its priority. When defendants 1 and 2 informed the Bank that the original title deed was lost, the Bank accepted the statement to be true and proceeded to deal with the defendants and 1 and 2 that the original title deed was in fact lost. The Bank has also obtained Ex. B-20 letter so that such representation made to the Bank by the 1st defendant may be on record. True, they have not enquired from the contractors to whom the original document was given. The absence of such enquiry does not constitute gross neglect on the part of the Bank when the Bank accepted Ex. B-18 along with the letter Ex B-20 and acted bona fide in its relations with defendants 1 and 2. We do not, therefore against the Bank.