A document evidencing an equitable mortgage requires registration under Section 17 of the Registration Act only if it constitutes the bargain between the parties and not if it is merely a record of an already completed transaction.

Raj Kishore Prasad, J.

1. This appeal by defendant 2, the wife of defendant 1, arises out of a mortgage suit, which has been decreed by the court below.

2. Two points have been pressed, on behalf of the appellant, in support of the appeal first, that the deed of gift dated the 16th July, 1947, executed by defendant 1 in favour of defendant 2 (Ext. B) is a real transaction, and not a sham transaction as held by the court below; and, second, that the letter (Ext. 1-c), of the 2nd February, 1948, was the real contract evidencing its terms between the plaintiff and defendant 1, and, as it is not registered no equitable mortgage was created thereunder.

3. In order to decide these two questions, it is necessary to state the material facts, having bearing on them which are as below :

4. The plaintiff is a bank which had monetary transactions with defendant 1 from before. At the request of defendant 1, he was allowed cash credit loan by way of overdraft against approved shares. As a result of the overdraft, defendant 1 executed a handnote (Ext. 2) for rupees two lakhs. On the 16th July, 1947, defendant 1 executed the impugned deed of gift in favour of his wife, defendant 2, in respect of his land and houses standing thereon, in the town of Ranchi. On the 31-1-1948, the debit balance due to the plaintiff from defendant 1 was Rs. 121,813-2-2.

On 2-2-1948, according to the case of the plaintiff, as the value of the security given in deposit by defendant 1 to the plaintiff fell short of the outstanding debt due from defendant 1, he was asked to give additional security; and, therefore, ho deposited the title deeds, in respect of the property situated in the town of Ranchi, at Calcutta. Subsequently, it was alleged by the plaintiff, defendant 1 sent a letter also the same day (Ext. 1-c). As in spite of the sale of the security in deposit with the plaintiff the money due from defendant 1 was not satisfied, the plaintiff brought the present suit for recovery of its dues.

After the institution of the suit, when the plaintiff learnt about the impugned deed of gift (Ext. B), the plaint was amended and defendant 2 was added as a party. The plaintiff asserted that this deed of gift (Ext. B) was fictitious, and, defendant 1 never intended to transfer, nor, did this document actually transfer the ownership or possession to defendant 2 and, that it was created to defeat the claim of the plaintiff.

5. The suit was contested by defendants 1 and 2 both. The defence of defendant 1 was that he bad) gifted the disputed property to his wife on 16-7-1947, (Ext. B), and, therefore, he had no subsisting night, title or interest in the disputed property on 2-2-1948, in respect of which he could validly create an equitable mortgage, and that the letter (Ext. 1-c) was virtually a mortgage deed, and, as it was unregistered, it was inadmissible in evidence. The defence of defendant 2 was the same. She further pleaded that the building which was standing on the land had been constructed by her after its gift by her husband to her out of her own funds.

6. The court below, after a consideration of the evidence of both sides, held that the deed of gift was a sham transaction, and, therefore, it did not affect the right of the plaintiff to get a mortgage decree against this property also. The learned Judge of the court below further held that an equitable mortgage was created, and, that Ext. 1-c did not require registration as contended by the defendants. He, therefore, decreed the plaintiffs suit and passed a preliminary decree.

7. Defendant 1 has. not come up in appeal against the said decree. It is only his wife, defendant 2, who has appealed against that part of the decree which affects her property covered by her impugned deed of gift (Ext. B).

8. AS regards the first question as to whether the deed of gift (Ext. B) is a sham or a real transaction, the main contention on behalf of the appellant was that as defendant 1 had sufficient security at the time wh