1936 (2) TMI 24 - HC - Indian Laws

Court dismisses suit due to lack of valid mortgage by deposit of title-deeds

The court dismissed the suit as there was no valid mortgage by deposit of title-deeds under Section 58(f) of the Transfer of Property Act since the ... - Issues Involved:1. Jurisdiction under the Dekkhan Agriculturists' Relief Act.2. Validity of equitable mortgage by deposit of title-deeds.3. Interpretation of Section 58(f) of the Transfer of Property Act.4. Agency relationship with the post office.5. Completion of the transaction under the Indian Contract Act.Detailed Analysis:1. Jurisdiction under the Dekkhan Agriculturists' Relief Act:The defendants initially contended that they were agriculturists under the Dekkhan Agriculturists' Relief Act, and thus, the court had no jurisdiction to try the suit. The plaintiffs elected not to claim a personal decree against the defendants and proceeded only as a mortgage suit.2. Validity of equitable mortgage by deposit of title-deeds:The primary issue was whether a valid equitable mortgage was created by the defendants sending the title-deeds to the plaintiffs. The court had to determine if the deposit of title-deeds constituted a valid mortgage under Section 58(f) of the Transfer of Property Act.3. Interpretation of Section 58(f) of the Transfer of Property Act:The defendants argued that Section 58(f) required the person making the deposit of title-deeds to be physically present in Bombay. They contended that the phrase 'a person in any of the following towns' implied that the person must be in the town when delivering the documents. The court rejected this contention, stating that punctuation should not be relied upon to interpret the plain words of a section. The court held that the proper construction of the clause is that the debtor should deliver, in any of the towns mentioned, the documents of title to immoveable property with the intent to create a security.4. Agency relationship with the post office:The defendants sent the title-deeds by post, and the court had to determine if the post office acted as the plaintiffs' agent. The court considered whether the plaintiffs had given express or implied authority to the defendants to send the title-deeds by post. The court concluded that the plaintiffs had constituted the post office as their agent to receive the title-deeds, making the transaction complete when the documents were posted.5. Completion of the transaction under the Indian Contract Act:The court examined whether the transaction was complete when the title-deeds were posted or when they were received by the plaintiffs in Bombay. The court held that the transaction was complete when the title-deeds were posted, as the plaintiffs had prescribed the manner of acceptance, and the defendants had complied. The court noted that the plaintiffs' contention that the defendants could cancel the security before the documents were received in Bombay was incorrect, as it assumed the transaction remained incomplete upon posting.Conclusion:The court concluded that there was no valid mortgage by deposit of title-deeds within the meaning of Section 58(f) of the Transfer of Property Act, as the title-deeds were not deposited in Bombay. The suit was dismissed with costs.