2007 (8) TMI 793 - HC - Indian Laws

Summary

Issues involved:
The issue involves seeking a direction for mutation in revenue record u/s equitable mortgage by deposit of title-deeds without registration fees and stamp duty.

Judgment Details:

Issue 1: Mutation in Revenue Record
The petitioners sought mutation for equitable mortgage by deposit of title-deeds without registration fees. The respondents argued that such a mortgage is compulsorily registrable u/s 17(1)(c) of the Registration Act. The court held that an equitable mortgage is created by mere deposit of title-deeds, not requiring registration. The petitioners' act of depositing title-deeds was sufficient to create a mortgage u/s 58(f) of the Transfer of Property Act.

Issue 2: Legal Precedents
Legal precedents were cited, including Rachpal Maharaj v. Bhagwandas Daruka and State Bank of Mysore v. S.M. Essence Distilleries Pvt. Ltd. The court concluded that a memorandum confirming an equitable mortgage does not require registration and does not extinguish the original equitable mortgage created by deposit of title-deeds.

Issue 3: Government Regulations
The State argued that deposit of title-deeds/equitable mortgage is compulsorily registrable. However, the court held that such mortgages are created by deposit of title-deeds, not through a written instrument, and therefore, do not require registration.

Conclusion:
The court allowed the petition, directing the respondents to enter mutation in favor of the bank for the properties equitably mortgaged by deposit of title-deeds. The judgment clarified that a mortgage created by a simple deposit of title-deeds does not require compulsory registration.