MOHINI MOHAN SAHA Vs. JANAKI NATH (DEAD)

JUDGEMENT

(1.) The question for consideration in this appeal is whether a mortgage was created by delivery of documents of title to immoveable property with intent to create a security thereon, in respect of a transaction of loan evidenced by a hand note executed by Janaki Nath Samanta, the father of the respondents 1 to 5 (b) in this appeal in favour of Mohini Mohan Saha, the appellant, on 6 April 1932 for Rs. 2,500. The evidence in the case before us establishes the position that before the hand-note in question, Ex. 3 in the case, was executed, Janaki Nath Samanta handed over to the appellant his title deeds in respect of his rice mill at Burdwan and the site thereof and of the adjacent land and garden, on the date on which the title deeds were delivered, a loan of Rs. 12,500 was advanced by the appellant, and Janaki Nath Samanta stated that he would take loan up to a maximum of Rs. 20,000 and that the deposit of title deeds would be the security for loan up to the said sum of Rs. 20,000. This position is clearly made out on evidence coming from the side of the appellant; and we see no reason to hold that the evidence was untrustworthy and unreliable, as we were invited to do on behalf of the respondents in this appeal. It would appear that on the evidence, the Judge in the Court below came to the conclusion that it might probably have been intended that the second advance of Rs. 2,500 would come to be covered by the previous delivery of title deeds when an amount of Rs. 12,500 was advanced; but as there was no fresh deposit of title deeds it could not be held that there was any delivery of title deeds for the second hand-note for Rs. 2,500 from a "mere tacit intention" of the parties concerned. On the above conclusion the decision was given by the learned Subordinate Judge in the Court below, that so far as the hand-note of Rs. 2,500 was concerned, there was no mortgage. In our opinion the decision is erroneous and cannot be supported.

(2.) It is well settled that in the case of a mortgage by delivery of title deeds, the debts must be proved; the deposit of title deeds has to be established; and the intention that the title deeds deposited as a part of the transaction should be security for the debt made out. It may further be taken to be established on authorities, that a mortgage by delivery of title deeds as contemplated by law, is not created when the deeds are deposited before any money is advanced with a view to prepare a future mortgage, and there is no express agreement that they shall stand as security for future advances. Title deeds may be deposited under an oral agreement to cover present and future advances. As each advance is made, it becomes a charge upon the property comprised in the title deeds from the force of the prior oral agreement that it shall be so [see Ex parte Langston (1810) 17 Ves 227 and Ex parte Whitbread (1812) 19 Ves 209, referred to in Jaitha Bhima V/s. Abdul Syad Oosman (1886) 10 Bom 634]. Applying the rule mentioned above to the evidence in the case before us, the conclusion is irresistible that a mortgage was created by the transaction evidenced by the handnote Ex. 3 in the case, by the deposit of title deeds, and by the force of the prior express oral agreement between the parties concerned, that the title deeds deposited were to cover the present and future advances up to Rs. 20,000. In our judgment, the plaintiff-appellant was entitled to get a mortgage decree for the amount covered by the hand-note Ex. 3 in the case on the materials before us.

(3.) It may be mentioned that it was contended on behalf of the respondent in the appeal that the delivery of title deeds related only to the advance of Rs. 12,500 made at the time at which they were delivered, and the provisions contained in Section 91, Evidence Act, operated as a bar to leading oral evidence that the deposit of title deeds as made related to future advances. The argument in this behalf was based on the contents of a memorandum creating collateral security for the amount of Rs. 12,500, dated 10 March 1932, Ex. 2 in the case, in which the words "collateral security for the repayment of Rs. 12,500 only" were used. It is impossible for us to give effect to the argument, seeing that the oral agreement between the parties concerned did not relate to the transaction in which the amount of Rs. 12,500 was advanced, and for the reason that it was open to the appellant before us to prove a separate oral agrement as to any matter on which the document, Ex. 2, was silent. On the conclusion we have arrived at, the part of the decision and decree of the Court below against which this appeal is directed, must be set aside; and we direct accordingly. The claim of the plaintiff- appellant based on the hand-note dated 9 April 1932, Ex. 3 in the case, is allowed on the footing that a mortgage was created in respect of the loan of Rs. 2,500 advanced by delivery of title deeds. The Court below will now proceed to pass a mortgage-decree for the entire claim made in the suit in which this appeal has arisen, in accordance with law, entitling the plaintiff-appellant to recover the mortgage money claimed by him with costs in the litigation, up to the present stage, including the costs in this appeal. The hearing fee in this appeal is assessed at three gold mohurs.