An unregistered Mortgage Deed cannot be relied upon for recovery of money, necessitating remedies under Order 38 Rule 5 CPC instead of Order 39 Rule 1 and 2 CPC.

JUDGMENT :

H.P.Sandesh, J.

Heard the learned counsel for the appellant and learned Senior counsel for respondent Nos.1 and 2.

2. This miscellaneous first appeal is filed praying this Court to set aside the order dated 28.04.2018 passed by the IV Additional City Civil and Sessions Judge at Mayo Hall Unit, Bengaluru (CCH-21) in O.S.No.25855/2017 on I.A.Nos.I/2017 and II/2017 and allow the said applications and pass such other order as deems fit in the circumstance of the case.

3. The appellant/plaintiff while seeking the relief of judgment and decree sought for a direction to the defendant No.1 and defendant No.4 to pay the plaintiff a sum of Rs.5 Crores as per the Deed of Mortgage dated 04.04.2014 executed by defendant No.1 in favour of the plaintiff as per Document No.4 to the plaint and along with interest on the said sum at 24% per annum from the date of suit and also sought the relief to declare that the Mortgage Deed dated 28.05.2015 executed by defendant No.1 in favour of defendant Nos.2 and 3 as per plaint Document No.10 is not binding on the plaintiff and its rights under the Mortgage Deed dated 04.04.2014 and so also sought the relief that in the event of the defendant Nos.1 and 4 failing to repay the sums due to the plaintiff, then the Hon’ble Court be pleased to direct the sale of the suit schedule property belonging to the defendant Nos.1 and 4, and to direct that the sums owed to the plaintiff are paid from the said sale proceedings and grant such other relief.

4. While seeking such relief, it is pleaded that the defendants received a sum of Rs.5 Crores from the appellant and respondent No.1 executed Mortgage Deed in favour of the appellant/plaintiff agreeing to repay the said sum within a period of 120 days, failing which agreed to pay interest at 24% per annum over the said sum and the said document was executed on 04.04.2014 and details of advancement of the amount is narrated in the plaint.

5. It is also the case of the appellant that they have sent the legal notice to the plaintiff demanding payment of Rs.10,86,77,568/- in terms of Annexure-D on 18.12.2015, including the principal amount and also interest at the rate of 24% per annum. It is contended that respondent No.1 sent reply admitting the said sum and also admitted execution of the documents and relies upon the reply marked as Annexure-E dated 30.01.2016. It is also contended that respondent No.4 being the owner of the appeal schedule property has sent a letter to the appellant expressing willingness to pay the said sum of Rs.10,86,77,568/- on 26.02.2016. It is further contended that when the amount was not paid, suit was filed for recovery of the said amount in terms of Annexure-B and also inter alia sought for an interim order restraining the defendants from mortgaging the suit schedule property to third parties and to restrain commercial operation in the suit schedule premises in terms of I.A.Nos.I and II. It is contended that the respondents filed written statement and also objections to the suit and I.As. and contend that commercial transaction document was executed by the respondents in favour of their parties in terms of Annexure-M.

6. Learned counsel for the appellant would vehemently contend that the Trial Court committed an error in dismissing the applications even though the defendant No.1 has borrowed an amount of Rs.5 Crores. But, disputes the execution of Mortgage Deed on the ground that as per Sections 58(f) and 59 of Transfer of Property Act, 1882, no registered instrument is required under Section 59 of the Act thereof as in other classes of mortgage and contend that, it requires compulsory registration under Section 17 of the Indian Registration Act. and Section 17(1)(c) of the Registration Act requires compulsory registration, except deposit of the title deed of mortgage and the Trial Court committed an error in considering those provisions while granting the relief. Learned counsel also brought to notice of this Court paragraph No.12 of the