Letters evidencing the deposit of title deeds for the purpose of creating an equitable mortgage do not require registration if they do not contain all the terms of the contract and are merely evidential.

SRINIVASAN, J.

1. The only question in this Appeal is whether there is valid equitable mortgage in favour of the plaintiff, which is the Appellant. There is no dispute that the title deeds relating to the suit properties were deposited with the plaintiff on 16.10.1975 with an intent to create a security for the loans obtained by the defendants from the plaintiff. The contention put forward by the defendants in the course of evidence is that the deposit was made in Kovilpatti and not in Tirunelveli and therefore, there could not be any equitable mortgage by deposit of title deeds. Kovilpatti is not one or the notified towns. Such a contention was not put forward in the written statement. The trial court has rightly disbelieved the case advanced by the defendants in the evidence. The plaintiffs evidence clearly proves that the deposit of title deeds was made at Tirunelveli, which is one of the notified towns. Hence, there was deposit of title deeds with a view to create an equitable mortgage.

2. It is then contended that the two letters which evidence the deposit of title deeds require registration and as they are not registered, there is no valid equitable mortgage which can be enforced in a court of law. The trial court accepted that contention and granted only a money decree in favour of the plaintiff. Ex. A-26 is the letter written by the first defendant to the Manager of the plaintiff bank at Tirunelveli Junction on 17.10.1975. The relevant portion of the letter reads thus:—

“This is to place on record that to secure the facility/s referred to above granted to me, at your Kovilpatti Branch, I/We have already deposited with you at Tirunelveli Junction on 16.10.1975 the title deeds relating to my/our properties (situated at Kumararethinapuram) and as described in Schedule “A” herewith attached with intent to create an equitable mortgage by deposit of title deeds for which you have agreed in respect of properties fully described in the Schedule B herewith attached on the said properties together with all structures and machinery standing thereon and to be put up in future to secure the said facility/s due and owing to me, to you inclusive of renewals thereof from time to time together with interest thereon and/or any other monies that may become due and payable from time to time by me to you and/or any liability arising out of the aforesaid fecility/s granted and undertaken by you in that behalf and payable by me/to you as also such other and further liability up to a sum of Rs. 2,00,000/- (Rupees two lakhs only) which may be advanced to me in future by you.”

Ex. A-27 is a similar letter written by the second defendant on the same day relating to his properties and the title deeds deposited by him. The language of the letter is ad idem with that of Ex. A-26.

3. The letters by themselves do not purport or operate to create, declare, assign, limit or extinguish any right, title or interest in the immovable properties referred to therein. A document shall be registered if it falls under Clause (b) of Section 17(1) of the Registration Act. In the present case, we have extracted the operative portions of the letters. The remaining parts of the letter are only schedules containing the description of the documents deposited and description of the properties to which they relate.

4. Section 58(f) of the Transfer of Property Act defines a mortgage by deposit of title deeds, as follows:—

“Where a person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay, and in any other town which the State Government concealed may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to the immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title deeds”

Section 59 provides that where the principal money secured is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of