Mortgage by deposit of title-deeds needs no registered instrument, but territorial notification under Section 58(f) must be verified.

A mortgage by deposit of title-deeds is created by delivery of title documents with intent to secure a debt, and a memorandum that merely records an already completed deposit does not, by itself, require registration, stamp duty, or registration fee. Registration becomes necessary only where the writing itself creates or records substantive rights as part of the bargain. The transaction also depends on the property being situated in a town covered by Section 58(f) of the Transfer of Property Act or a valid notification under that provision, and that foundational territorial fact must be examined before mutation can be sustained.

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Issues: (i) Whether mortgage by deposit of title-deeds required registration, payment of registration fee, and stamp duty before charge could be entered in the revenue record. (ii) Whether the High Court's direction for mutation could stand without examining whether the properties were situated in towns notified under Section 58(f) of the Transfer of Property Act, 1882.

Issue (i): Whether mortgage by deposit of title-deeds required registration, payment of registration fee, and stamp duty before charge could be entered in the revenue record.

Analysis: A mortgage by deposit of title-deeds is created when the borrower delivers title documents to the creditor with intent to create security. Such a transaction does not, by itself, require an instrument of mortgage. A memorandum merely recording a completed deposit is not an instrument creating rights or liabilities and does not require registration. Only where the writing itself forms part of the bargain and creates or records substantive rights does registration become necessary. In the facts found, the title-deeds were simply deposited with the bank and no registrable instrument creating the mortgage was shown.

Conclusion: The charge could be entered in the revenue record without registration, registration fee, or stamp duty; the challenge to the High Court's view failed.

Issue (ii): Whether the High Court's direction for mutation could stand without examining whether the properties were situated in towns notified under Section 58(f) of the Transfer of Property Act, 1882.

Analysis: The applicability of mortgage by deposit of title-deeds depends on the property being situated in a town specified in Section 58(f) or notified by the State Government. The record showed a notification specifying only certain towns, while the places where the properties were situated were different. This jurisdictional and factual aspect went to the root of the matter and had not been examined by the High Court.

Conclusion: The impugned order was set aside and the matter was remitted for fresh consideration.

Final Conclusion: One appeal was dismissed and the connected appeal was allowed with remand, leaving the substantive question of mutation to be reconsidered on the territorial-notification issue.

Ratio Decidendi: A mortgage by deposit of title-deeds, by itself, does not require a registered instrument; but where the transaction depends on whether the property lies within a town notified under Section 58(f), that foundational fact must be determined before mutation can be sustained.

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