Back
High Court Of Delhi
PARKASH DEV CHOPRA - Appellant
Versus
NEW BANK OF INDIA LIMITED - Respondent
REGULAR FIRST APPEAL 161D of 1961
Decided On : 07/21/1967
EQUITABLE MORTGAGE - DEPOSIT OF TITLE DEEDS - REGISTRATION - LETTERS ACKNOWLEDGING DEPOSIT OF TITLE DEEDS - WHETHER REQUIRE REGISTRATION - INTENTION OF PARTIES - EVIDENCE ACT, 1872, SECTION 91 - REGISTRATION ACT, 1908, SECTION 17.
Fact of the Case:
The plaintiff-bank filed a suit for recovery of Rs. 31,960 by sale of mortgaged property against the defendants. The defendants resisted the suit on the ground that the equitable mortgage was not enforceable because the document embodying the terms of the loan required registration. The trial court decreed the suit in favor of the plaintiff.
Finding of the Court:
The court held that the letters acknowledging the deposit of title deeds did not require registration as they were not intended to be an integral part of the transaction between the parties and did not by themselves operate to create an interest in the immovable property.
Issues: 1. Whether the letters acknowledging the deposit of title deeds require registration? 2. Whether the intention of the parties was to create an equitable mortgage?
Ratio Decidendi: 1. A mortgage by deposit of title deeds does not require any writing, but it is usual for the mortgage to be accompanied by a memorandum in writing. 2. In order to decide whether the writing requires registration, the court has to see whether the writing itself constitutes the bargain or contract between the parties, or whether it is a record of an already completed transaction. 3. If the parties intend to reduce their bargain regarding the mortgage by deposit of title deeds in the form of a document and want that document to be the only repository and appropriate evidence of their contract of equitable mortgage, the document would require registration. 4. If on the other hand the court comes to the conclusion on construction of the document and consideration of the surrounding circumstances that the parties did not intend to reduce the bargain into writing, the contract to create the mortgage would arise by implication of law by the deposit of title deed with the requisite intention and a letter or a memorandum sent about the deposit of title deeds would not require registration.
Final Decision: The appeal was dismissed with costs.
( 1 ) THIS regular first appeal filed by Parkash Dev Chopra, defendant No. 3, is directed against the judgment and decree of learned Subordinate Judge I Class, Delhi, whereby he awarded a preliminary decree for recovery of Rs. 31,960 with interest from the date of the institution of the suit till realization by sale of the mortgaged property in favour of the New Bank of India Limited plaintiff against the appellant, Devi Das Chopra and Sons defendant No. 1 and Devi Das Chopra defendant No. 2.
( 2 ) THE appeal arises out of a suit for recovery of Rs. 31,960 by sale of mortgaged property which was brought by the respondent- bank through its principal officer Pran Nath Abrol against Devi Das Chopra and Sons, Devi Das Chopra and Parkash Dev Chopra. Parkash Dev Chopra is the son of Devi Das Chopra. According to the allegations of the plaintiff, defendant No. 1 is a joint Hindu family firm of which Devi Das Chopra is the Kartaa. Defendant No. 3, who is a member of the joint family, was working with his father in the said firm. It is stated that in May 1952 on the application of defendant No. 1 through defendants Nos. 2 and 3 the plaintiff sanctioned a Cash Credit limit to defendant No. 1 up to Rs. 15,000 against the security of documents by way of equitable mortgage of their house No. 15a/18, situated in Western Extension. Area, Karol Bagh, Delhi. Again on application of defendant No. I through defendants Nos. 2 and 3 the plaintiff increased the Cash Credit limit from Rs. 15,000 to Rs. 20,000 against the same security. To cover the Cash Credit account, defendant No. 1 through defendants Nos. 2 and 3 executed a pronote for Rs. 20,000 on 12/10/1953 in favour of the plaintiff agreeing to pay interest at the rate of 9 per cent. per annum. By way of collateral security the defendant-firm deposited the title deed in respect of the above-mentioned house of the value of Rs. 56,000 by way of equitable mortgage with the plaintiff. The said title deed and a declaration form signed by defendant Nos. 2 and 3 to the effect that the property was free from encumbrances, were handed over to the plaintiff. Defendants Nos. I to 3 also hypothecated and charged as collateral security their brick-kiln. But as the plaintiff did not find such a brick-kin to be in existence, the above security was not pursued. The plaintiff claimed that Rs. 20,000 as principal and Rs. 11,964 on account of interest at the rate of 9 per cent. per annum from the date of mortgage till the 4/3/1959, were due from defendants Nos. I to 3. The present suit was, accordingly, filed on 16/3/1959 for re- covery of Rs. 31,960.
( 3 ) RAM Rakha Mal Gupta defendant No. 4, Jai Pal defendant No. 5 and Pushpa Devi defendant No. 6 were impleaded as parties during the pendency of the suit on the ground of being the subsequent mortgagees of the property in dispute. The date of mortgage in favour of defendants Nos. 4 and 5 is stated to be 10/12/1958, while that in favour of defendant No. 6 is stated to be 22/4/1959.
( 4 ) THE suit was resisted by defendants Nos. 1 to 3. Defendants Nos. 1 and 2 in their written statement stated that though the loan was applied for from the plaintiff the equitable mortgage was not enforceable because the document embodying the terms of the loan required registration, it was averred that there was no valid mortgage in favour of the plaintiff. Defendant No. 3 in his written statement pleaded that the suit had not been filed by a competent and authorised person on behalf of the plaintiff. Defendant No. 3 denied that defendant No. 2 was the Karta of the firm. According to defendant No. 3, defendant No. 1 was a partnership firm. Defendant No. 3 further denied that any equitable mortgage was created in favour of the plaintiff. As regards the property in suit, the plea of defendant No. 3 was that he was the sole owner of the same and it did not constitute joint Hindu family property. According further to defendant No. 3, he was made to sign a number of do
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
