AIR 1993 KARNATAKA 359 ::(1994) BankJ 276 ::(1993) ILR (Kant) 2016 ::1993 (2) KantLJ 649 ::(1994) 2 BankCLR 128 ::(1993) 2 BankCas 389

Karnataka High Court

Hon'ble Judge(s): K. S. Bhat, R. V. Raveendran , JJ

(A) Transfer of Property Act (4 of 1882) , S.58(f), S.59— Equitable Mortgage - Creation of, in Notified Town by deposit of titles deeds - Subsequent registration of Memorandum confirming deposit of title deeds in town not notified under S. 58 (f) but where property is situated - Does not render mortgage invalid. To create a valid mortgage by deposit of title deeds, there must be a delivery of the title deeds relating to an immoveable property by the debtor to a creditor or his agent, in a notified town with the intention to create a security thereon. An equitable mortgage of a property which lies outside the territories of notified towns, can be validly created by delivering the documents of title to the creditor or his agent in a notified town.(Para 16) Where the memorandum executed by the party was merely a record of a transaction of equitable mortgage which validly came into effect at notified town and it did not create the equitable mortgage, nor did it embody the bargain between the mortgagor and the mortgage, nor did it extinguish the equitable mortgage created and created a fresh equitable mortgage, it did either require to be stamped under. Art. 6 of the Stamp Act or required registration and it did .not have the effect of rendering the equitable mortgage invalid. The mere facts that the memorandum was registered would ....