Deposit of title deeds creates a valid mortgage without registration when the writing is only evidentiary of a completed security transaction.

A memorandum or letter connected with deposit of title deeds requires registration only when it is intended to embody the bargain creating the mortgage; if it is merely evidentiary of a completed deposit made with intent to create security, registration is not required. On the facts, the Court found the documents lacked essential terms such as the principal amount, interest rate, and particulars of the deeds, and were not the operative instrument of the transaction. The equitable mortgage was therefore validly created by deposit of title deeds, the documents did not require registration under Section 17 of the Indian Registration Act, 1908, and the mortgage decree was upheld.

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Issues: Whether the letters and documents relating to the deposit of title deeds constituted an integral part of the bargain so as to require registration, or whether they were merely evidentiary of a completed mortgage by deposit of title deeds.

Analysis: A mortgage by deposit of title deeds is created when title deeds are delivered with intent to create security, and no registered instrument is required if the security arises by the act of deposit itself. Registration becomes necessary only where the parties reduce the bargain to writing and the writing is intended to be the sole repository of the terms of the security. The decisive question is whether the document records a concluded transaction already completed or whether it itself embodies the bargain creating the charge. The letter marked exhibit 7(a) did not mention the principal amount, rate of interest, or particulars of the title deeds, and therefore did not appear to be the operative bargain. Exhibit 7(b) was only an authority to negotiate further and lacked the material terms of the transaction. Exhibit 12, though reciting an intent to create equitable mortgage, was found to be substantially similar to a merely evidential memorandum and not a document creating the security by itself.

Conclusion: The documents did not require registration under Section 17 of the Indian Registration Act, 1908, and the equitable mortgage was validly created by deposit of title deeds. The plaintiff was entitled to a mortgage decree.

Final Conclusion: The appeal succeeded, the High Court's view was set aside, and the mortgage claim was upheld with consequential relief under the mortgage decree.

Ratio Decidendi: A memorandum relating to deposit of title deeds requires registration only if it is intended to embody the bargain creating the security; if it is merely evidentiary of a completed deposit with intent to create a mortgage, registration is not required.

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