1963 (2) TMI 67 - SC - Indian Laws

Supreme Court Rules Exhibit 7(a) Not an Equitable Mortgage

The Supreme Court held that the document exhibit 7(a) did not create an equitable mortgage requiring registration. As a result, the plaintiff was entitled ... - Issues Involved:1. Whether the documents (exhibits 7(a), 7(b), and 12) created an equitable mortgage requiring registration under Section 17 of the Registration Act.2. Whether the plaintiff is entitled to a mortgage decree.Issue-wise Detailed Analysis:1. Whether the documents (exhibits 7(a), 7(b), and 12) created an equitable mortgage requiring registration under Section 17 of the Registration Act:The plaintiff alleged that the defendants created an equitable mortgage by depositing title deeds with the plaintiff on August 11, 1945, to secure advances up to one lakh of rupees. The defendants contested this, claiming the title deeds were not deposited to create an equitable mortgage and that exhibit 7(a) constituted a bargain requiring registration under Section 17 of the Registration Act.The trial court held that exhibits 7(a) and 7(b) created an equitable mortgage and required registration. Consequently, it granted a money decree to the plaintiff. The High Court, however, found exhibit 7(a) to be integral to the transaction and dismissed the appeal, denying a mortgage decree.The Supreme Court examined whether exhibits 7(a), 7(b), and 12 constituted an equitable mortgage requiring registration. It noted that a mortgage by deposit of title deeds under Section 58(f) of the Transfer of Property Act does not require registration unless the parties reduce their contract to writing, making the written document the sole evidence of the terms. If the written document is integral to the transaction, it requires registration under Section 17 of the Registration Act.The Court analyzed exhibit 7(a) and concluded it was not integral to the transaction. It did not specify the principal amount, interest rate, or details of the title deeds, indicating it was not intended to create an interest in immovable property by itself. Therefore, exhibit 7(a) did not require registration.Regarding exhibits 7(b) and 12, the Court found exhibit 7(b) lacked material particulars and suggested the transaction was incomplete. Exhibit 12 recorded a concluded transaction and was not written by the karta of the joint family. The language of exhibit 12 was similar to a document previously construed by the Court in Rachpal Mahraj v. Bhagwandas Daruka, which did not require registration. Thus, exhibits 7(b) and 12 did not require registration either.2. Whether the plaintiff is entitled to a mortgage decree:The Supreme Court held that the High Court's view on the construction of exhibit 7(a) was erroneous. Since exhibit 7(a) did not require registration, the plaintiff was entitled to a mortgage decree. The Court granted the plaintiff a mortgage decree for the amount claimed in the plaint, Rs. 31,000, with interest at 6% per annum from the suit's institution and costs.The decree stated that if the defendants did not pay the amount within six months, the mortgaged properties described in the plaint's schedule would be sold to satisfy the plaintiff's claim.Conclusion:The Supreme Court allowed the appeal with costs, overruling the High Court's decision and granting the plaintiff the usual mortgage decree under Order 34, Rule 4, Civil Procedure Code.