9911796707
TMI Blog2007 (8) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited (in the annexures attached with the petition name of the Company has been shown as M/s Ultra Drugs (P) Ltd. is the company which has been sanctioned a term loan of ₹ 425 lacs and working capital facilities of ₹ 99 lacs by the Punjab National Bank, as per communication dated January 29, 2007 (Annexure P/2). The sanction letter also accepted the change in the Board of Directors and the change in the security offered by the Company. This letter reveals that equitable mortgages of 19 marlas of Narvir Singh's land and 31 marlas of Rajinder Kaur's land would be the securities offered by the borrowers. The petitioners deposited the original title deeds of their properties with the Bank on February 8, 2007. Thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners has referred to Rachpal Maharaj v. Bhagwandas Daruka SC/0046/1950in which it was held that when a debtor deposits with the creditor the title deeds of his property with an intent to create a security, law implies a contract between the parties to create a mortgage and no registered instrument is required under Section 59 of the Transfer of Property Act or in the form of a mortgage deed. Reference has also been made to State Bank of Mysore v. S.M. Essence Distilleries Pvt. Ltd. 1993 I.S.J. 580 (Kar)In this case a Division Bench of the Karnataka High Court was considering the case of creation of an equitable mortgage as collateral security for securing loan. The party which deposited the title deed had also later executed a mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated by deposit of title-deed. The petitioners deposited the title-deeds of their respective properties as equitable mortgage in terms of the sanction letter dated January 29, 2006 (Annexure P/2). One of the directions in the said sanction letter addressed to the Bank Manager was that he shall ensure that a wall is constructed around the properties to make the property more identifiable and mutation is entered in favour of the bank. 7. It was in pursuance of these directions that the Manager had written to the Tehsildar on February 10, 2007 for recording charge of the bank in the revenue record. This letter is annexed as Annexure P/3. Even the principal borrower approached the Tehsildar through letter dated February 12,2007 (Annexure P/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le mortgage is created by deposit of title-deeds and not through any written instrument. Simple pledge of the title-deeds to the bank as security creates an equitable mortgage, therefore, there is never an instrument of deposit of title-deed/equitable mortgage. The petitioner simply went to the bank and handed over the title deeds of their respective properties. This act was enough to create a mortgage as envisaged under Section 58(f) of the Transfer of Property Act. Quite often a memorandum is drawn up regarding the handing over of the title-deeds but this memorandum is simply a written record of the pledge. The memorandum itself is not an instrument of mortgage. The judgment of Karnataka High Court has considered this aspect in detail and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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