A mortgage must be registered to be valid; an unregistered mortgage deed does not affect property rights.

JUDGMENT :

SATHISH NINAN, J.

1. The decree in a suit for money is under challenge by the 5^th defendant. Since the issue involved in the appeal is confined to the liability of the 5^th defendant and his properties, only the facts relevant thereto are being adverted.

2. The plaintiff is a financial institution seated abroad. The first defendant is a co-operative society. Defendants 2 and 3 are its Executive Director and President. The plaintiff granted a loan of US Dollars 4,28,571/- to the first defendant Society. The loan was adequately secured by mortgage of the immovable properties belonging to defendants 4 to 6. Defendants 4 to 6 are brothers. Plaintiff claims that, defendants 5 and 6 had executed a power of attorney in favour of the 4^th defendant and mortgage was created by the 4^th defendant of the properties of defendants 5 and 6. Alleging failure on the part of the defendants to clear off the liability, suit was filed.

3. Defendants 1 to 3, while admitting the transaction contended that the suit is barred by limitation.

4. The 5^th defendant filed a written statement denying the execution of the power of attorney in favour of the 4^th defendant and also the creation of the mortgage of his properties. He contended that he is a stranger to the transaction. It was contended that he is and have been at the United States of America from the year 1970 and that he had rarely come down to his native place after that. He is an American citizen.

5. The trial court held that the 4^th defendant was the power of attorney holder of the 5^th defendant and that the properties of the 5^th defendant were mortgaged by the 4^th defendant in favour of the plaintiff to secure the credit facility. The court decreed the suit allowing the plaintiff to realise the liability from the mortgaged properties and from defendants 1 and 2.

6. We have heard Sri.K.K.Chandran Pillai, learned Senior Counsel for the appellant-5^th defendant and Sri.T.Sethumadhavan, the learned Senior Counsel appearing for the first respondent-plaintiff.

7. The points that arise for determination in this appeal are :-

(i) Did the 5^th defendant constitute the 4^th defendant as his power of attorney holder, enabling creation of mortgage of his properties?

(ii) Is there a valid mortgage in favour of the plaintiff in respect of plaint schedule item numbers 1 to 4 properties?

(iii) Does the decree and judgment of the trial court warrant any interference?

8. Exts.A4 to A7 are original title deeds relating to the properties of the 5^th defendant. Exts.A20, 21 and 22 are the documents evidencing the mortgage. With regard to the properties of the 5^th defendant, mortgage is claimed to have been created by the 4^th defendant as the power of attorney holder of the 5^th defendant. The power of attorney is claimed to be one executed before a Notary Public at USA. The 5^th defendant denies of having executed any such power of attorney. It is the contention of the 5^th defendant that, Exts.A4 to A7 original deeds, which were kept in the Tarwad house was unauthorisedly taken away by the 4^th defendant and the alleged mortgage was created on fabricating a power of attorney of the 5^th defendant.

9. Before we go to the merits of the above contention, we deem it appropriate to consider the legal effect of Ext.A21, the deed of mortgage. The title and the recitals in Ext.A21 without the schedule of the properties, read thus:-

“TITLE DEED MORTGAGUE

(Under Section 58 (f) of the Transfer of Property Act, India)

I, Mr. JOSE EUGIN JOSEPH, Chirayil House Ettumannoor, Ettumannoor P.O., Kottayam Dist., Kerala State, The advisory board member of Nirmalgram Vanitha Dairy Central Society, Kothamangalam, hereby mortgage and deposit the following TITLE DEEDS of 1.33.13 Ares