Dama Seshadri Naidu, J.

Introduction:

1. Two persons borrow money from a bank by depositing their title deeds as security. They register the transaction. The loan satisfied, the borrowers want the title deeds back. The banker and the borrowers execute a deed of cancellation and present it for registration. The Registration Department wants to treat the cancellation deed either as a reconveyance or as a deed relating to deposit of title deeds—exacting higher stamp duty.

2. The questions to be answered are these: (a) Does the cancellation deed amount to “an agreement relating to deposit of title deeds” under Article 6 of the Schedule to the Kerala Stamp Act? Or (b) does the cancellation deed “reconvey the mortgaged property” attracting stamp duty under Article 47 of the same Schedule?

Facts in Brief:

3. In this writ appeal, the State assails the judgment dated 11.8.2017 in W.P.(C)No. 21855/17.

4. The respondents 1 and 2 obtained a loan from the third respondent Bank and deposited their title deeds as security. This offering of security is technically termed 'mortgage by deposit of title deeds'—an equitable mortgage. Though simple handing over the title deeds would suffice, the ba