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TMI Blog2013 (10) TMI 1507X X X X Extracts X X X X X X X X Extracts X X X X ..... anies Act, was sanctioned a term loan of ₹ 425 lakhs and working capital facility of ₹ 99 lakhs by the Punjab National Bank (hereinafter referred to as the Bank). As agreed by the Bank, original title-deeds in respect of 19 Marlas of land belonging to Narvir Singh and 31 Marlas of land owned by Rajinder Kaur were deposited with the Bank by the borrower. In this way mortgage 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. 5. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng impleaded as a party to the proceedings, which was allowed by this Court vide order dated 12th July, 2010. The Bank is represented by Mr. Rajesh Kumar, Advocate for M/s. Mitter and Mitter, Advocates. 11. Another application for impleadment (I.A. No. 3 of 2011) has been filed by Shankar Twine Products Pvt. Ltd. through its Director. We reject this petition giving liberty to it to take recourse to such other remedy as is available to it before the court of competent jurisdiction. 12. 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. 13. 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 title-deeds.--Where a person in any of the following towns, namely, the towns of Calcutta, Madras, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have taken, which would be evident from the following passage of the judgment: 4. A mortgage by deposit of title-deeds is a form of mortgage recognized by Section 58(f), T.P. Act, which provides that it may be effected in certain towns (including Calcutta) by a person delivering to his creditor or his agent documents of title to immovable property with intent to create a security thereon. That is to say, when the debtor deposits with the creditor the title-deeds 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 Section 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 conjunctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to be drawn for this purpose. However, the parties may choose to have a memorandum prepared only showing deposit of the title-deeds. In such a case also registration is not required. But in a case in which the memorandum recorded in writing creates right, liability or extinguishes those, same requires registration. In our opinion, the letter of the Finance Commissioner would apply in cases where the instrument of deposit of title-deeds incorporates terms and conditions 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 title-de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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