The main legal point established in the judgment is that an equitable mortgage was created by P.L. George on behalf of defendants 1 to 3, and the suit was based on accounts secured by an equitable mortgage. The court also established that the future interest could be awarded at the rate at which moneys are lent or advanced by nationalized banks in relation to commercial transactions.

First defendant in O.S.No.174 of 1985 of the III Additional Sub Judge. Ernakulam is the appellant: plaintiff and defendants 2 to 6 are the respondents.

2. The plaintiff's case can be summarized as follows:

Appellant is the widow of late Sri. P.L. George. Late Sri. P.L. George approached plaintiff -first respondent bank for raising a loan for construction of a multi-strayed building in the plaint A schedule property and offered to secure the loan by mortgaging plaint A schedule property by deposit of title deeds. First respondent bank agreed to the same pursuant to which on 19-7-1979 the said P.L. George deposited Exts. A1 to A3 title deeds with respect to the A schedule property along with Ext.A4 power of attorney with the intention to create an equitable mortgage on his behalf as well as on behalf of defendants 1 to 3. and executed Ext.A-16 memorandum of deposit of title deeds. On the basis of the same amounts were advanced and he executed Ext.A5 series demand promissory notes when amounts were advanced. All the above advances were kept on separate accounts and later the balance due as per the said accounts were transferred to one account on 30-9-1981. and the amount due on the said date was Rs.8. 31.736.55. Late P.L. George acknowledged the said amount by Ext A11 communication written by him. After his death defendants executed a confirmation Ext.A-19 on 14-1-1983 and thus acknowledged the hability. According to the plaintiff since the defendants failed to insure the building in the plaint A schedule property as agreed. plaintiff got it insured and the amount was added to the principal. Several demands were made for payment of balance and ultimately a registered notice was issued on 31-10-1984. copy of which is Ext.A-12. Since the defendants did not comply with the demand the suit is necessitated.

3. Defendants 1 to 3 filed a joint written statement. and defendants 4 to 6 filed another joint written statement. Their contentions briefly. are: Late P.L. George did not create an equitable mortgage. that they did not authorize him to create an equitable mortage, that the suit is barred by limitation. that there was no agreement to pay the interest as claimed and that the promissory note mentioned in the plaint since are materially altered the plaintiff is not entitled to any relief.

4. Learned Subordinate Judge found the suit is maintainable and that late P.L.George created a mortgage by deposit of title deeds. It was found; the suit is not barred by limitation as against the first defendant and A schedule property. The Court also found. through of the 59 Ext.A-5 series promissory notes 50 were materially altered since the suit is based on accounts also the same is maintainable. Ultimately the suit was decreed for the plaint amount with interest at 14% from the deco the suit till recovery against the first defendant and the plaint A schedule property. The plaintiff was also allowed to realize the decree amount from the assets of the laic P.L.George in the hands of defendants 1 to 6. The said decree and judgment are under challenge in this appeal.

5. Learned counsel for the appellant contended that after having found 50 out of 59 promissory notes were materially altered. no decree for the plaint claim could have been passed. It was also contended. at any rate the suit as against the first defendant is barred by limitation. It was also his case that no equitable mortgage was created. in the alternative late P.I. George had no authority to execute can equitable mortgage on behalf of defendants 1 to 3. Learned counsel maintained. since there was no agreement to pay interest the lower court ought note have awarded interest at 14%

6. On the other hand it was contended by the plaintiff that Exts.A1 and A2 title deeds along with Ext.A-16 memorandum and Ext.A4 general power of attorney executed by defendants 1 to 3 would prove the equitable mortgage. and that Exts. A6 and A7 account would prove that loan was advanced. According to