AIR 1965 SUPREME COURT 1591

Supreme Court Of India

(From Patna : AIR 1958 Pat 472)1st February 1965

Hon'ble Judge(s): Raghubar Dayal, J. R. Mudholkar, R. S. Bachawat, V. Ramaswami , JJJ

Transfer of Property Act (4 of 1882) , S.58(f), S.59— Mortgage by deposit of title deeds - Essence of - When ponies choose to reduce contract to writing, registration if required. Registration Act (16 of 1908) , S.17— AIR 1958 Pat 472, Reversed. When the debtor deposits with the creditor title deeds of his property with an 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 classes of mortgage. It is essential to bear in mind that the essence of a mortgage by deposit of title deeds is the actual handing over by a borrower to the lender of 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 pans of the transaction and are essential ingredients in the creation of the mortgage. It follows @page-SC1592 that in such a case the document which constitutes the bargain regarding security requires registration under S. 17 of the Indian Regist....