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TMI Blog2013 (10) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... e by deposit of title-deeds took place. It is not in dispute that this transaction had taken place in a town notified under Section 58(f) of the Transfer of Property Act. The Bank wrote to the Tahsildar, Panchkula for mutation on the basis of mortgage effected by deposit of the title-deeds. When nothing was done, the land owner filed writ petition before the High Court inter alia praying for mutation on the basis of mortgage aforesaid. The respondents resisted mutation inter alia on the ground that no entry can be made as the instrument of deposit of title-deeds is compulsorily registrable under Section 17(1)(c) of the Registration Act and for that, they relied on a letter dated 29th March, 2007 of the Finance Commissioner and Principal Secretary to Government, the relevant portion whereof reads as under: "xxx xxx xxx 2.It is clarified that the instrument of deposit of title-deed/Equitable Mortgage is compulsorily registrable under Section 17(1)(c) of the Indian Registration Act, 1908. Registration fee is payable under Article 1(1)(b) in the table of Registration Fees Notification dated 06th November, 2006. Article 6 of the schedule I-A of the Indian Stamp Act, 1899 provides for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is available to it before the court of competent jurisdiction. In view of rival submissions, the question which falls for consideration is whether 'charge' of mortgage can be entered in the revenue record in respect of a mortgage effected by deposit of title-deeds without its registration and payment of registration fee and stamp duty. Mortgage by deposit of title-deeds is sanctioned by law under Section 58(f) of the Transfer of Property Act in specified towns, same reads as follows: "58. "Mortgage", "mortgagor", "mortgagee", "mortgage-money" and "mortgage-deed" defined.- (a) xxx xxx xxx (e) xxx xxx xxx (f) Mortgage by deposit of titledeeds.- Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and Bombay, and in any other town which the State Government concerned may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds." Mortgage inter alia means transfer of interest in the specific immovable property for the purpose of securing the money advanced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of his property with intent to create a security, the law implies a contract between the parties to create a mortgage, and no registered instrument is required under S.59 as in other forms of mortgage. But if the parties choose to reduce the contract to writing, the implication is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage. As the deposit alone is not intended to create the charge and the document, which constitutes the bargain regarding the security, is also necessary and operates to create the charge in conjunction with the deposit, it requires registration under S.17, Registration Act, 1908, as a non-testamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees and upwards. The time factor is not decisive. The document may be handed over to the creditor along with the title-deeds and yet may not be registrable......" This Court while relying on the aforesaid judgment in the case of United Bank of India v. M/s. Lekharam S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in addition to what flow from the mortgage by deposit of title-deeds. But in that case there has to be an instrument which is an integral part of the transaction regarding the mortgage by deposit of title-deeds. A document merely recording a transaction which is already concluded and which does not create any rights and liabilities does not require registration. Nothing has been brought on record to show existence of any instrument which has created or extinguished any right or liability. In the case in hand, the original deeds have just been deposited with the bank. In the face of it, we are of opinion that the charge of mortgage can be entered into revenue record in respect of mortgage by deposit of titledeeds and for that, instrument of mortgage is not necessary. Mortgage by deposit of title-deeds further does not require registration. Hence, the question of payment of registration fee and stamp duty does not arise. By way of abundant caution and at the cost of repetition we may, however, observe that when the borrower and the creditor choose to reduce the contract in writing and if such a document is the sole evidence of terms between them, the document shall form integral ..... 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