The main legal point established in the judgment is that a valid equitable mortgage can be created based on the change in intention of the parties, regardless of the physical location of the delivery of the title deeds.

1. The 1st defendant is the appellant. The suit was to recover the principal and interest due under a mortgage by deposit of title deeds. The plaintiff's case was that defendants 1 and 4 deposited the documents of title of their properties with its Head Office at Kozhikode with intent to create a mortgage as security for an overdraft accommodation to the tune of Rs. 7,000/-. It may be noted at this stage that the equity of redemption of the properties was sold at the instance of the Government and was purchased by one Muhammad who in turn assigned it to the 2nd defendant.

2. The main contentions of defendants land 4 were that they had not deposited the title deeds at Kozhikode with intent to create a mortgage, that the title deeds were handed over and deposited with the Tirur branch of the plaintiff Bank, that Tirur was not a notified area where a mortgage by deposit of title deeds could be created, that the plaintiff had returned some of the title deeds to the 4th defendant, the legal effect of which was a proportionate abatement in the claim secured under the mortgage, that the plaint claim was barred by limitation and that the properties were not liable to be sold in execution.

3. The lower court on a consideration of the evidence found that the documents of title were deposited by defendants 1 & 4 at Kozhikode, & therefore the mortgage was valid and decreed the suit as prayed for.

4. Mr. Mohammed Naha, appearing for the appellant argued that the equitable mortgage was invalid as the documents of title were delivered not at Kozhikode as held by the court below but at Tirur as contended by his client. The point for consideration, therefore, is whether the title deeds were delivered at Kozhikode with the intent to create a mortgage in respect of the properties covered by those deeds.

5. Defendants 1 and 4 applied for overdraft accommodation undertaking to deposit the documents of title of the properties belonging to them and Ext. 12 is the copy of the application made at the Tirur Branch of the plaintiff Bank. They also gave the title deeds to the Branch at Tirur for scrutiny and approval. On the basis of that application the audit-inspector of the Bank pw.1 came and inspected the properties proposed to be secured and the title deeds were handed over to him by the Branch at Tirur for the purpose of scrutiny at the head office of the Bank at Kozhikode. For that purpose he took the documents of title to Kozhikode and there they were examined by the legal advisers of the plaintiff Bank and they were, at the time when the memorandum of deposit and the accompanying documents were executed, in the custody of the Head Office of the Bank at Kozhikode. It is not disputed that the title deeds were handed over by defendants 1 and 4 at the Tirur Branch of the plaintiff Bank. It is also clear from the evidence of pw.1 that the Tirur Branch could not have given the over-draft accommodation on the security of a mortgage by deposit of the title deeds without the permission of the Head Office at Kozhikode as the authority for the same was in the Head Office of the Bank. So when the documents of title were handed over to the Branch at Tirur, according to the normal practice, known and assented to by defendants 1 and 4, they were sent to the Head Office for the purpose of examination and scrutiny. I think the position of the plaintiff at that time was that of a person holding the custody of the title deeds for a specific purpose.

6. The plaintiff's case was that defendants 1 and 4 came to Kozhikode on 151947 and executed Exts. A-4, A-5 and A-6, the pronote, the memorandum of deposit and the document containing terms and conditions of the loan respectively. The court below has relied on the evidence of pws.1 and 2 for coming to the conclusion that the defendants 1 & 4 came to Kozhikode on 151947 and formally delivered the title deeds after getting them back to the Bank with intent to create a mortgage.

7. pw.1 is the audit inspector of the