The main legal point established in the judgment is the validity of an equitable mortgage under S.67-A of the Transfer of Property Act and the requirements for creating a valid equitable mortgage, including the use of certified copies as documents of title.

1. The Syndicate Bank, the plaintiff in O.S. No. 142 of 1969 of the Subordinate Judge's Court. Kozhikode, is the appellant. Shorn of the unnecessary particulars detailed in the plaint, the case of the appellant is as follows:

2. Respondents 2 to 4 are the partners of the first defendant-firm, Modern Tile & Clay Works, having its business premises in Nallalam amsom and desom Kozhikode Taluk. The firm had accommodation facilities with the Canara Industrial and Banking Syndicate Ltd., which subsequently changed its name into 'Syndicate Bank Ltd.', (hereinafter to be referred to as the Bank) on the security of three equitable mortgages of the years 1949, 1958 and 1959. In 1962, the transactions were closed after receipt of Rs. 2,50,000/-. For the balance amount due and for sums thereafter to be advanced a simple mortgage was executed by defendants 1 to 4 in respect of the properties described in the A schedule to the plaint in favour of the Bank. The limit of accommodation was fixed at Rs 2,00,000/-. The simple mortgage was after reserving an existing first mortgage in favour of the Kerala Financial Corporation for Rs. 7,00,000/-. On the same day the respondents hypothecated the stock in trade. Five Insurance policies on the life of the 2nd respondent were also endorsed in favour of the Bank as security. The arrangement was to clear off the loan by making half yearly instalments of Rs. 20, 000/-. A reduction of interest at 1/2 per cent from the rate fixed for the loan was also provided for prompt payment of the instalments. There was a settlement of account on 28-1-1963, when a demand promissory note for Rs. 1,80,000/- was executed by way of additional security. On 29-6-1966, respondents 2 to 4 as partners of the 1st respondent firm borrowed Rs 30,000/-frorn the Bank on executing a promissory note, agreeing to pay interest at 10 per cent per annum. As security for the repayment of the loan respondents 2 to 4 deposited by way of equitable mortgage with the plaintiff Bank at Calicut, the registration copy of the title deed in respect of the properties described in the B schedule to the plaint with the relative encumbrance certificates and an affidavit in stamp Paper explaining the loss of the original title deed. The Bank subsequently surrendered the five insurance policies and appropriated the amount towards the loan. As there was default to pay the balance, the suit was filed for realisation of the amounts due under the two mortgages under S.67-A of the Transfer of Property Act. The appellant-Bank relied on some acknowledgements to save the bar of limitation. The appellant claimed sale of the A schedule items after reserving the mortgage in favour of the Financial Corporation and also for payment of the surplus sale proceeds of the B schedule properties towards the payment of the balance due under the first loan account. Defendants 5 to 7 were impleaded subsequently, in view of the statement in the written statement of defendants 1 to 4 that the items in the B schedule stood set apart to those persons in a partition effected between them and defendants 1 to 4.

3. Though defendants 1 to 4 appeared through counsel the written statement was filed only by defendants 1 to 3. They confessed judgment in respect of the amount due under the simple mortgage dated 12- 2-1962. They also admitted the negotiations for the loan of Rs. 30,000/-on the security of the B schedule properties, but contended that the registration copy of the document and the promissory note were taken by the Bank from the residence of the defendants and not from the plaintiff's branch at Calicut. Since the deposit was from a place outside the Calicut Municipality, no valid mortgage by deposit of title deeds could have been made. They also contended that a handing over of a registration copy of a document was insufficient for creating a mortgage by deposit of title deeds. The liability of the B schedule properties as security for the amounts due was disputed o