Ramaswami, J. - (1.) In the suit which is the subject-matter of this appeal the plaintiff alleged that on August 11, 1945 the defendants created an equitable mortgage to secure advances made by the plaintiff up to the limit of one lakh of rupees as over-draft to carry on their business. It was further alleged that the mortgage was created by the deposit of two title deeds at Calcutta on August 11, 1945 with regard to two houses and there was a letter of authority dated August 9, 1945 [Ex. 7 (a)] as addressed by Defendant No. 2 Lakharam to the plaintiff authorising Defendant No. 4 - Babulal Ram to deposit the title deeds. On August 10, 1945 Sonaram Defendant No. 3, brother of Defendant No. 4 addressed a letter to the Manager of the plaintiff-bank authorising Defendant No. 4 his younger brother - to deliver the title deeds for deposit and "to negotiate further in this respect". The letter of Sonaram is Ex. 7 (b). On August 11, 1945 Babulal Ram, Defendant No. 4 wrote a letter (Ex. 12) addressed to the Manager of the plaintiff-bank containing the Schedule of documents said to have been deposited with the plaintiff-bank at Calcutta - namely the title deeds of 17th September 1927 and 13th December 1937. The suit was contested by the defendants on the ground that the title deeds were not deposited at Calcutta with a view to create an equitable mortgage, and that in any case, the document Ex. 7 (a) constituted a bargain between the parties and required registration under, S.17 of the Registration Act. It was contended on behalf of the defendants that in the absence of the registration the plaintiff was not entitled to a mortgage decree.
(2.) The trial Court considered that Exs. 1 (a) and 7 (b) were not merely a record of past transactions but created an equitable mortgage and, therefore, required registration under S. 17 of the Registration Act. The trial Court, therefore, granted a money decree in favour of the plaintiff for the amount claimed in the plaint along with interest @ 6 per cent. p. a. from the date of, the decree and costs. The plaintiff took the matter in appeal before the High Court which expressed the view that Exs. 7 (b) and 12 were not of much consequence and Ex. 7 (a) was the material document to be construed in the case and the High Court took the view that Ex. 7 (a) written by Lekharam, Defendant No. 2 was meant to be an integral part of the transaction and was not intended to be mere evidence for the deposit of the title deeds. The High Court accordingly held that the plaintiff was not entitled to a mortgage decree and, therefore, dismissed the appeal.
(3.) The letter written by Lekharam - Ex. 7 (a) on August 9, 1945 reads as follows: "I-hereby authorise my son Mr. Babulal Ram to deposit with you on my behalf at your Calcutta Office the following Title deeds with a view to create an equitable mortgage on the said properties to make your advances in the A/C of Messrs Lekharam Sonaram and Co. Giridih, better secured. I hereby further declare that I am the sole owner of the Giridih property as per schedule below and an legal joint heir with my sons dealing in the name of Messrs Lekharam Sonaram and Co. of the Malho property as described in the schedule below. I hereby further declare that both the properties described in the schedule are free from all encumbrances and nobody else has any claim right or title to the properties. And hereby declare that the deposit will give you a valid legal title over my sad properties as mortgagee until all the obligations of the Messrs Lekharam Sonaram and Co. with your Giridih branch are duly satisfied. Particulars of Properties. 1. Giridih property. 2. Malho property.";