The defendant in O.S.No.109 of 2010 is the petitioner herein and the respondent/plaintiff filed the said suit on the file of IV Additional District Judge, Tanuku, seeking a preliminary decree for Rs.8,95,101/- against the defendant based on equitable mortgage created in respect of the property of dry land of an extent of Ac.0.10 cents in R.S.No.437/1 and an extent of Ac.0.64 cents in R.S.No.437/2 situated in Penugonda village and Mandal, West Godavari District. When PW.1 was being examined, he wanted to mark the document styled as “Memorandum of Deposit of Title Deed”, which was executed subsequent to the execution of promissory note dated 28-03-2008 and the defendant objected to the marking of the same. The defendant raised the objection that the said document is compulsorily registerable as required under Section 17 (1) (c) of the Registration Act. There was no dispute with regard to the document being unregistered. The trial Court overruled the objection by order dated 27-01-2015 and challenging the same, the present Civil Revision Petition is filed.

The document in question was styled as “Memorandum of Deposit of Title Deed” dated 30-03-2008. It states that on 28-03-2008 the executant took a loan of Rs.6,00,000/- on the basis of promissory note and the lender required the lendee to secure the said loan by some immovable property on 29-03-2008 and in furtherance of the said requirement, he wanted to create a security of the property, which was registered under document No.433 of 2003 in favour of lendee and handed over the original document as security with a condition that after payment of full amount under the promissory note, the original document along with the promissory note would be taken back. The document also recites that the lender is entitled to recover the amount against the property given as security. The document in Telugu reads as follows:

“TELUGU”

Learned counsel for the defendant relied on various decisions before the trial Court, whereas the learned counsel for the plaintiff relied on the judgment of the Supreme Court reported in State of Haryana and others v. Navir Singh and another ((2014 (1) ALD 13 SC). The trial Court by relying on a Division Bench judgment of this Court in Durga Emporium, Vijayawada v. M/s. Munaga Brothers Cloth Merchants, Cuddapah (2002 (5) ALD 135 DB) overruled the objection. The trial Court mainly held that the document was executed subsequent to taking of the loan and since it was executed for the past transaction and for the purpose of security for the debt, the document creates only equitable mortgage under Section 58 (f) of the Transfer of Property Act, 1882 and it is not compulsorily registerable document as required under Section 17 (1) (c) of the Registration Act.

The relevant portion of Section 17 of the Registration Act, 1908 reads as follows:

“17. Documents of which registration is compulsory -

…

(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish whether in present or in future, any right, title or interest whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;

(c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest……”

With regard to deposit of title deeds, way back, the Madras High Court in Muthiah Chetty v. Kodandarama Swami Naidu (31 MLJ 347) held that if the document contains a clause that the lender may sell the property in default of payment on the agreed date, the power of sale creates an interest not only in the property but also in the title deeds and the said transaction of the document is chargeable as a regular mortgage deed. The law on this aspect was summarized by the Supreme Court in United Bank of India Ltd., v. M/s. Lekharam Sonaram and Co. and others as follows:

“……A mortgage by deposit of