The court affirmed the validity of a mortgage created by deposit of title deeds, reversing the DRT's findings and restoring the original interest rate.

ORDER

1. This Appeal is filed against the order passed in OA 116/2007 by Learned Presiding Officer, DRT-I, Chennai, on 14.07.2015.

2. The Applicant Bank filed this OA against the Defendants 1 to 3, for recovery of a sum of Rs.14,33,191/- together with interest at 14% p.a. with monthly rests, jointly and severally, from the date of OA till the date of recovery; also for the relief of sale of properties, costs etc.

2.1 Learned Presiding Officer had partly allowed the OA holding that the Applicant Bank is entitled to recover a sum of Rs.14,33,191/- from the Defendants, jointly and severally, together with interest at 12% p.a. (simple) from the date of OA till the date of realization together with costs. He further ordered for sale of the properties described in Schedule ‘B’ to OA, in case of default in making payments by the Defendants and made Defendants 2 and 3 personally liable for the amount due, in case the sale proceeds are not found sufficient to cover the amount due. When it comes to ‘A’ Schedule property mortgaged by the Respondent No.3 to secure the loan, Learned Presiding Officer found that the Applicant Bank is not entitled to proceed against this property. Challenging the order disallowing the Bank’s right to proceed against the property mentioned in Schedule ‘A’ to the OA and reduction of interest, this Appeal is filed by the Bank.

3. Learned Counsel for the Appellant Bank submitted that the order allowing OA in part and denying the right to proceed against the property mentioned in Schedule ‘A’ to OA and reduction of interest is against the evidence and law. Respondent No.3 had produced her original documents of title for creation of mortgage by deposit of title deed and executed Guarantee Deed. The relevant documents had been produced before the Tribunal below, but, without properly considering the evidence produced, the impugned order was passed, therefore, this Appeal has been filed.

4. In reply, Learned Counsel for Respondent No.3 submitted that Respondent No.2 approached through one Mr. Chandran for sale or mortgage of her immovable property bearing old No. 28, new Nos. 34 and 35, Vetrivel Street, Kamaraj Nagar, Red Hills, Chennai -52. This property was already mortgaged with M/s. Sriman Madhwa Sidhanta Onnahini Permanent Nidhi Ltd., Triplicane. Therefore, Respondent No.3 had produced the xerox copy of the documents relating to this property to the Respondent No.2. Respondent No.2 took her to Anna Nagar and obtained signature in various printed forms including the postal inland letter under the guise of arranging to sell or mortgage her property. Respondent No.3 never deposited the title deeds of her property. She never intended to create equitable mortgage by deposit of title deeds. As earlier stated, the original documents were already given to M/s. Sriman Madhwa Sidhanta Onnahini Permanent Nidhi Ltd.

4.1 Learned Counsel for Respondent No.3 further submitted that Learned Presiding Officer rightly found that the Respondent No.3 had not produced the original title deeds for creation of mortgage for deposit of title deeds, and thus, denied the relief in so far as the sale of the property described in Schedule ‘A’ to the OA, was concerned. Thus, she prayed for confirmation of order of Learned Presiding Officer and for dismissal of this Appeal.

5. Considered the rival submissions and perused the records.

6. When the matter was heard on 27.02.2025, Learned Counsel for Appellant Bank submitted that the borrower had cheated the Bank by producing colour xerox of the original documents of title. In the said circumstance, this Tribunal directed the Registry to call for the original documents produced before the Tribunal below. Accordingly, the original documents had been produced.

6.1 The perusal of the original documents produced before DRT shows that the original sale deed in favour of Respondent No.3 dated 25.06.1983 executed by one S. Thangavel, was produced before the Tribunal, and now produced before this Appellate Tribun