TMI Blog2013 (10) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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. 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 part of the transaction and same shall require registration under Section 17 of the Registration Act - Decided against petitioner. - Civil Appeal No.9030 of 2013 (@ Special Leave Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty, the prayer for mutation cannot be allowed. The High Court considered the objection and negatived the same in the following words: We are of the view that an equitable 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 titledeed/ 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 .. Mr. B.S. Mor, Additional Advocate General appearing for the State submits that mortgage by deposit of title-deeds requires registration under Section 17(1)(c) of the Registration Act, 1908. Further it mandates payment of fee as prescribed under article 1(1)(b) of the Registration Fees notification dated 6th November, 2006. In addition, payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signment, limitation or extension of any such right, title or interest, requires compulsory registration. Mortgage by deposit of title-deeds in terms of Section 58(f) of the Transfer of Property Act surely acknowledges the receipt and transfer of interest and, therefore, one may contend that its registration is compulsory. However, Section 59 of the Transfer of Property Act mandates that every mortgage other than a mortgage by deposit of title-deeds can be effected only by a registered instrument. In the face of it, in our opinion, when the debtor deposits with the creditor title-deeds of the property for the purpose of security, it becomes mortgage in terms of Section 58(f) of the Transfer of Property Act and no registered instrument is required under Section 59 thereof as in other classes of mortgage. The essence of mortgage by deposit of title-deeds is handing over by a borrower to the creditor title-deeds of immovable property with the intention that those documents shall constitute security, enabling the creditor to recover the money lent. After the deposit of the title-deeds the creditor and borrower may record the transaction in a memorandum but such a memorandum would not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f documents of title to immovable property with the intention that those documents shall constitute a security which will enable the creditor ultimately to recover the money which he has lent. But if the parties choose to reduce the contract to writing, this implication of law 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. It follows that in such a case the document which constitutes the bargain regarding security requires registration under Section 17 of the Indian 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. If a document of this character is not registered it cannot be used in the evidence at all and the transaction itself cannot be proved by oral evidence either . Bearing in mind the principles aforesaid, we proceed to consider the facts of the present case. It is relevant here to state that letter dated 29th March, 2007 of the Finance Commissioner inter al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result, we do not find any merit in the appeal and it is dismissed accordingly but without any order as to costs. CIVIL APPEAL NO.9049 OF 2013 (@SLP (C) NO. 924/2009) Delay condoned. Leave granted. By the impugned order, the High Court had directed the appellants herein to enter mutation in favour of Punjab National Bank in respect of the properties mortgaged by deposit of title-deeds. According to the appellants, the properties mortgaged by deposit of title-deeds are situated in the village Matab Garh in the District of Ludhiana and at village Dallomajra, Tahsil and District Fatehgarh Sahib and village Sadhugarh in the District Sirhind. It is the stand of the appellants that deposit of the title-deeds are not in relation to the properties situated in the towns specified under Section 58(f) or in the towns notified by the State Government in terms of Section 58 of the Transfer of Property Act. In this connection, our attention has been drawn to the notification dated May 26, 2003 of the Government of Punjab in the Department of Revenue and Rehabilitation, same reads as follows: In exercise of the power conferred by clause (f) of Section 58 of the Transfer of Property ..... 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