The main legal point established in the judgment is that a memorandum of deposit of title deeds may not require registration if it is meant to record a concluded transaction and does not create an interest in the immovable property.

JUDGMENT

1. The Appeal, under Sec. 96 of the Code of Civil Procedure [for short 'the C.P.C.'], is filed by the Appellant/Plaintiff challenging the Decree and Judgment, dtd. 31/3/2003, in O.S. No. 30 of 2000 passed by the learned Senior Civil Judge, Kandukur [for short 'the trial Court']. The Respondents herein are the Defendants in the said Suit.

2. The Appellant/Plaintiff filed the Suit praying for passing of preliminary decree directing the Defendants to deposit the suit amount of Rs.2, 51, 663.00 with future interest.

3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court.

4. The brief averments of the plaint, in O.S. No.30 of 2000, are as under: (i) The Plaintiff is the State Bank of India, constituted under the Central Act 23/1955, dtd. 8/5/1955, having its registered Branch Office at Kandukur Town of Prakasam District. The 1st Defendant is proprietorship Company, which is represented by 2nd Defendant -

Proprietor.

(ii) The 2nd Defendant approached the Appellant Bank for financial aid to run the iron safes and iron furniture business under the scheme of Small Business Finance under the name and style of 1st Defendant Company at Kandukur. Accordingly, the Appellant Bank sanctioned a sum of Rs.2, 00, 000.00, which was agreed to be paid on demand with interest @ 14% per annum with quarterly rests.

(iii) The 2nd Defendant deposited title deed bearing registration No. 3010 of 1995, dtd. 27/11/1995, on 1/8/1996 and also sent a confirmation letter on 2/8/1996 in favour of the Plaintiff Bank by creating an equitable mortgage on the property contained in the registered sale deed as collateral security and also executed a demand promissory note for the said amount of Rs.2, 00, 000.00 on 1/8/1996 in favor of the Appellant Bank.

(iv) The Schedule Property is a self-acquired property of the 2nd Defendant having a terraced building at 14 Ankanas.

(v) As the 2nd Defendant failed to pay the amount, even- after repeated demands, but on considering the written representation, dtd. 16/5/2000, submitted by the 2nd Defendant requesting the Appellant Bank to facilitate him to pay a sum of Rs.5, 000.00 per month commencing from July, 2000, still the 2nd Defendant did not adhere the promise and failed to pay any amount. Accordingly, on 20/5/2000, the Appellant Bank issued a notice to the Defendants demanding them to pay the amount by May 2000, but the Defendants failed to respond to the notice. Hence, the present Suit is filed.

5. The brief averments of the written statement, filed by the Defendants, are as under: (i) The Defendants while admitting applying for loan with the Appellant Bank and availing the loan of Rs.1, 70, 000.00 submitted that the remaining balance amount of Rs.30, 000.00, out of the loan amount, has not been utilized and it is with the bank. However, the Defendants denied granting of loan on the condition of creating equitable mortgage by deposit of title deeds.

The Defendants also denied that the stocks were pledged.

(ii) The 2nd Defendant contended that he is an illiterate person but learnt to sign. The authorities of the Appellant Bank took his signatures on unfilled blank bank documents, which were utilized by them for filing the Suit. The Defendants further contended that they did not agree to repay the loan with quarterly rests. The Defendants contended that, the alleged equitable mortgage deed and the pledge requires registration, otherwise, the same is not valid and binding. Since, the Suit is barred by limitation, the same may be dismissed with costs.

6. Based on the above pleadings, the trial Court framed the following issues:

(i) Whether the defendants have not availed the entire amount?

(ii) Whether the creation of equitable mortgage is not true?

(iii) To what relief?

7. During the course of trial in the trial Court, on behalf of plaintiff, PW1 was examined and Ex.A1 to Ex.A10 were marked. On behalf of defendants, DW1 was examined and no document was marked.

8. After comple