The distinction between a mortgage with possession and a simple mortgage is defined in sections 58 (b) and 58 (d) of the Transfer of Property Act, 1882.

( 1 ) IN this reference under section 57 (2} at the Indian Stamp Act, we have to consider the true nature of the mortgage deed dated 24-6-1968 to opine whether :-

(1) it is a mortage deed by which "possesion of the property or any part of the property comprised m such deed is given by the mortgagor or agreed to be given" in the meaning of Article 40 (a) of Schedule I-A (Delhi) of the Stamp Act;

AND (2) the duty on transfer of property leviable under section 147 of the Delhi Municipal Corporation Act, 1957 in the form of a surcharge on stamp duty can, be recovered as deficiency along with penalty under section 40 of the Stamp Act.

( 2 ) QUESTION NO. 1 :-

IT is common ground that the deed in question is a "mortgage deed" within the meaning of section 2 (17) of the Stamp Act. The question is whether it is a mortgage with possession or a simple mortgage. The distinction between these two types of mortgage has to be gathered from the provisions of the Transfer of Property Act, 1882, section 58 (b), of which defines a simple mortgage and section 58 (d) of which defines a usufructuary mortgage. In a simple mortgage. the mortgagor does not deliver possession of the mortgaged property to the mortgagee but binds himself personally to pay the mortgage-money and agrees that on his failure to pay the same, the mortgage, the mortgagor does not deliver possession of the mortgaged pro so far as may be necessary for the satisfaction of the mortgage debt. In a usufructuary mortgage, on the other hand, the mortgagor delivers possession of the mortgaged property to the mortgagee or expressly or by implication binds himself to deliver such possession and authorises the mortgagee to retain such possession until payment of the mortgage-money and to receive rents and profits of the property and appropriate the same towards the satisfaction of the mortgage debt. The meaning of "possession" in section 58 of the Transfer of Property Act is not actual physical possesion but such possession which the property is capable of.

( 3 ) THE recitals in the deed in question are that the whole of the property comprising two buildings Nos. 8 and 9 in Block A, Con- naught Place, New Delhi, belonged to the Dayal Singh Library Trust Society who agreed to sell them to Messrs. Dhoomi Mal Ram Chand for a price paid to the Trust by the New Bank of India in consideration of the mortgage of the whole property by Messrs. Dhoomi Mal Ram Chand to the said Bank. The deed is thus a tripartite agreement between the seller, the purchaser-mortgagor and the mortgagee. A part of the property was already in the possession of the mortgagee as a lessee. By clauses 4 and 5 of the deed, the parties agreed that the said lease shall remain effective and binding on the mortgagor. The Collector of Stamps was of the view that the possession of the property was thus delivered by the mortgagor to the mortgagee and, therefore, the deed in question was a usufructuary mortgage. The Chief Controlling Revenue Authority was, on the other hand, of the view that the mortgagor did not give possession to the mortgagee in this transaction which could not, therefore, be considered as a mortgage with possession.

( 4 ) IT is essential to remember that the Bank was already in possession of a part of the property as a lessee of the Trust, When the whole property was sold by the Trust to Messrs Dhoomi Mal Ram Chand, the latter became the lessor of the Bank. The relationship of the Bank with Messrs. Dhoomi Mal Ram Chand continued to be that of a lessee and a lessor as before even after the purchase of the property by Messrs. Dhoomi Mal Ram Chand from the Trust. When Messrs. Dhoomi Mal Ram Chand mortgaged the whole of the property to the Bank in consideration of the payment of the price payable by Messrs. Dhoomi Mal Ram Chand to the Trust, the possession of the property as a whole was neither transferred by the mortgagor to the mortgagee nor was it agreed to be so transferred within the meaning of