A document that embodies the contract of an equitable mortgage by deposit of title deeds and constitutes the agreement between the parties requires registration under Section 17 of the Indian Registration Act, 1908.

RAMACHANDRA RAJU, J.

( 1 ) THIS appeal arises out of a suit brought by the appellant against the respondents to enforce an equitable mortgage alleged to have been created by one late Sonti Venkataratnam, the father of respondents 2 to 5. The short point for determination in the appeal is whether Ex. A-7 styled as a letter signed and delivered by Sonti Venkataratanam on 7-11-1951 and relied upon by the appellant as evidencing the creation of the mortgage was compulsorily registrable under Section 17 of the Indian Registration Act and not having been registered was inadmissible in evidence to prove the mortgage. The learned Subordinate Judge who tried the sit held that the document required registration and was therefore inadmissible in evidence and accordingly dismissed the suit. Aggrieved by the said decision of the lower court the plaintiff has preferred this appeal.

( 2 ) ON the pleas taken by the defendants the lower court also framed some more issues and gave findings and the correctness of those findings is not now questioned before us.

( 3 ) IN order to properly appreciate the question involved a few facts may be stated. Late Sonti Venkataratnam used to borrow moneys from the plaintiff and was executing promissory notes from time to time. In the first instance he borrowed a sum of Rs. 10,000. 00 in the year 1948 and executed Ex. A-1 promissory note. Later he borrowed some more amount in the year 1949 and executed the promissory note. Ex. A-2. In renewal of these two promissory notes a fresh promissory note was executed in the year 1950 as per Ex. A-3. In renewal of Ex. A-3 he executed a fresh promissory note on 4/05/1951 (Ex. A-4 for Rs. 13, 500 ). On 13/08/1951 he borrowed a further sum of Rs. 1. 800. 00 and executed Ex. A-5 promissory note. These later two promissory notes were executed not only by Sonti Venkataratnam but also by one Sumu Subbarao. According to the case of the plaintiff when Sonti Venkataratnam was pressed for repayment of the debt due under Exs. A-4 and A-5 he deposited Ex. A-6 title deed as security for payment of the debt and also executed Ex. A-7 letter evidencing the deposit. It is convenient to extract here Ex. A-7 because the entire question depends upon its proper construction having regard to the surrounding circumstances. It is as follows:"to Sri Kakaraparthi Bhavanarayana Sastri garu, Vijayawada. Letter executed by Sonti Venkataratnam son of Kotaiah of Bezwada. Myself and Tumu Subba Rao borrowed Rs. 13, 500. 00 on 4-5-51 and Rs. 1,800. 00 on 13-8-51 on two promissory notes executed by us jointly in your favour at 12 per cent, compound interest. I now deposit the title deed of Sonti Venkataratnam amount us relating to 1390 Sq Yards of site in Municipal Ward No. 22. Revenue Ward 9 Block No. 18 T. S. No. 781 A dated 5-2-1948 as a collateral security for the payment of the money due on the two promissory notes referred to above inclusive of interest. I executed this document of security in sour favour after assuring you that I never created any charge or encumbrance on the property covered by the title deed dated 5-2-48. Executed this 7th day of November 1951. (Signed) Sonti Venkataratnam 7-11-1951. "

( 4 ) SECTION 58 (f) of the Transfer of Property Act recognises a mortgage by despot of title deeds as a form of mortgage. It provides that it may be effected by a person "delivering to his creditor his agent documents of title to immovable property with intent to create a security thereon. " It means that when the debtor deposits with the creditor the title deeds of his property with a view to create 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. The parties can also choose to reduce the contract into writing in which case the deposit and the document both form integral parts of the transaction and as a document creating security requires registration under Section 17 of the Indian

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