Necessity of registration of equitable mortgage.

This is an appeal by the plaintiff in O.S. No. 1593 of 1955 on the file of the City Civil Court, Madras, against the decree and judgment of the learned Third Assistant Judge in so far as they are against him. The suit was for the recovery of the principal and interest due in respect of a promissory note executed by the defendants on 4th July, 1961, for a sum of Rs. 8,000. The plaintiff alleged that nothing had been paid either towards principal or interest and a total sum of Rs. 10,160 was due for principal and interest on the date of suit. The plaintiff further alleged that by way of security for the moneys so advanced the defendants deposited the title deeds of the properties mentioned in the plaint schedule with the plaintiff, authorising him to hold the said documents which had been previously given to him in pursuance of a simple mortgage for Rs. 15,000 executed by the defendants in his favour, and therefore a mortgage by deposit of title deeds was created in favour of the plaintiff. The prayer was for a mortgage decree, and in the alternative for an ordinary money decree. The defence was that the suit promissory note was not executed for any cash consideration but it was executed only as security for the payment of money that may be found due on account of the purchase in auction of certain sports goods which had been pledged with the plantiff. An auction admittedly was held of the goods as pre-arranged for Rs. 5,500 but the defendants found that the goods had been damaged and unserviceable and therefore did not take delivery of the said goods. The suit promissory note was not therefore supported by consideration. The defendants also pleaded that there was no valid mortgage by deposit of title deeds because the letter, dated 5th July, 1951, on which the plaintiff relied in support of his claim, required registration, and, not having been registered, was not admissible in evidence. The learned Judge found that the suit promissory note was not executed for cash consideration but it was executed as security for the payment of the amount that would be found due in respect of the auction-purchase of the sports goods by the defendants, and as the amount of the bid at the auction was only Rs.5,500 the promissory note was supported only to the extent of Rs. 5,500. He also held that the letter, dated 5th July, 1951, required to be registered and not having been registered there was no valid equitable mortgage. In the result the learned Judge passed a decree in favour of the plaintiff for a sum of Rs. 5,500 with proportionate costs and interest at six per cent. per annum from the date of delivery of the goods, namely, 25th July, 1951, and dismissed the rest of the plaintiff’s claim. He however declared that the properties mentioned in the plaint shall be a charge for the amount decreed, a direction which it is difficult to follow, having regard to the finding that the non-registration of the letter would deprive the plaintiff of a mortgage decree.

Learned counsel for the plaintiff-appellant contended that the learned Judge should have passed a decree for the entire amount claimed by him. The onus no doubt is on the defendant, as the execution of the promissory note was admitted, to prove that it was not supported by consideration. But in our opinion the defendants-have adduced sufficient circumstantial evidence to shift the onus on to the plaintiff to prove that cash consideration passed. The plaintiff has not filed his accounts which would have conclusively established his case, if true, that Rs. 8,000 had been paid in cash to the defendants. The promissory note is, dated 5th July, 1951. The auction was held in the same month and Exhibit A-3, is the delivery note for the goods which were purchased by the first defendant at the auction for a sum of Rs. 5,500. The plaintiff in his evidence admitted that the highest bid was for Rs. 5,500, but according to him this money was paid to the auctioneers and he in turn got