- (1.) These appeals are before this Bench because a two- judge Bench of this Court felt that there is no clear cut authority on the question as to whether a property can be equitably mortgaged by depositing documents which may not be title deeds or registered document of title. In view of the decision which we propose to take, it is not necessary to answer this question in the present cases.
(2.) Briefly stated, the facts necessary for the decision of these cases are that M/s United Auto Tractor Ltd (for short, the "Company") applied to the Government of Andhra Pradesh for allotment of land. The Government of Andhra Pradesh allotted 51 acres of land in the industrial Development Area, Nacharam, Andhra Pradesh to the Company, in terms of an order dated 18.7.1972. An agreement was entered into on 03.8.1972 between the Government of Andhra Pradesh and the Company regarding payment of the cost of the land. The sale deed was to be executed and registered in the name of the Company only on full payment. We are mainly concerned with clause 8(a) and 8(b) of the said agreement which read as follows : "8(a) Without prejudice to the rights of the State Bank of India or any other financing agency approved by the Government as first mortgagees, Government have a second charge on the land, buildings, plant and machinery which shall be converted into a first charge when the obligation of the financing agencies are liquidated. 8(b) If the Financing Institutions were to advance more than 60% of the value of the land, building, machinery and structure, prior agreement of the Government will be required."
(3.) It is not disputed that in terms of the aforesaid agreement, the Company had paid 50% of the total cost of land and was put in possession thereof. The company sought permission of the Government of Andhra Pradesh to mortgage their land which permission was granted vide letter dated 03.8.1972 which reads as under : "In the circumstances stated in your letter second cited, you are hereby permitted to mortgage the 51 acres of land allotted in the Nacharam Industrial Development Area to any Scheduled Bank to obtain financial assistance to your project. The agreement executed by you is returned herewith duly signed";