1. ' The appellant has impugned the decree dated 1-9-1999 in Suit No,735 of 1994 filed by the respondent No,1 against the appellant respondents Nos.2 to 5, whereby, inter alia, mortgage decree against the appellant was granted in respect of the property bearing Plot No, F-19, Block-F, measuring about 1916-67 sq. Yds. For recovery of Rs.29,00,527 with costs and future mark-up till the realization and the appellant was allowed to deposit within a week, in default the amount to be recovered/realized through sale proceed.
2. ' The appeal animates in the following circumstances:- ' The respondent-Bank granted two running facilities to Mrs. Razzak and Company, a proprietary concerned of respondent No,2, Muhammad Ali on mark-up basis, details are as follows:-
(1) Agreement dated 17-3-1990 with sale price Rs.2,00,000 with by-back price Rs.249,450.
(2) Agreement of finance dated 17-3-1990 with sale price of Rs.23,00,000 with by-back price Rs.29,68,675.
3. ' To secure loan, the appellant as collateral security, created mortgage through registered deed dated 17-3-1990 for repayment of Rs.2,49,450. The appellant also created equitable mortgage by depositing the title documents through Memorandum of Deposit of Title Deed as security with maximum liability of Rs.28,68,675. The appellant also executed personal guarantee dated 17-3-1990 to secure repayment not exceeding Rs.31,81,125. The respondent No,2 (borrower) executed promissory note, letter of hypothecation etc. But defaulted in payment. In consequence thereof, the respondent No,1 iiicd the Suit bearing No,735 of 1994 against the appellant and respondents Nos.2 and others by presenting a plaint before the Banking Tribunal for decree for sale of mortgaged property. The appellant contested the suit of the respondent No,1 by filing written statement. After trial the suit of the respondent No,1 was decreed as stated above. Hence the present appeal.
4. ' We have heard Syed Sami Ahmad, learned counsel for the appellant and Mr. Hamza I. Ali, learned counsel for the respondent No,1 at Katcha peshi stage for disposal of the appeal finally.
5. ' Syed Sami Ahmed, learned counsel for the appellant has raised the following points in support of the appeal:--
(1) The liability of the appellant is to the extent of amount of registered mortgaged deed viz. Rs.2,39,450 only.
(2) The claim of the respondent No,1 is based on fictitious, fabricated, manipulated documents.
(3) The Memorandum of Deposit of Title Deed dated 18-3-1990 being unregistered, inadmissible in evidence and the learned Banking Judge has erred in decreeing the suit of the respondent on the basis of an inadmissible evidence. In other words, the effigy of this plea is based on the repealed provisions of clause (c) of section 49 of the Registration Act:- `49. No document required by section 17 or by any provision of the Transfer of Property Act to be registered shall:---
(a) ................
(b) ................
(c) be received as evidence of any transaction effecting such property or conferring such power unless it has been registered.
6. ' After referring the documents, in order to point out the manipulation, learned counsel for the appellant was not serious in pressing this ground as in documents particularly letter of guarantee, the amount in words was written in second line due to shortage of space, and secondly the letter of guarantee bears the signature of the appellant, on last page. Therefore, chances of manipulation cannot be doubted.
7. ' Reverting to the grounds 1 and 3, it was contended by the learned counsel for the appellant that the liability under the registered mortgage deed is Rs.2,49,450 which also contains a restrictive clause which puts a restriction on further charge. He referred the clause (3) thereof, thus maintained that subsequent charge by way of equitable mortgage is against the terms of mortgages, therefore, subsequent encumbrance do not create any liability on the appellant.
8. ' Conversely, learned counsel for the respondent No,1 maintained that there is no bar for creation of second charge by way of equitable mortgage in favour of the same mortgagee or in favour of third party subject to permission.
9. ' We are of the view that the creation of second charge in favour of the same mortgagee by the mortgagor would not effect the right of the mortgagee under the second charge.
10. ' Reverting to the third plea that the Memorandum of Deposit of title Deed in absence of registration has no evidentiary value nor it creates relationship of mortgagor and mortgagee between the appellant and the respondent No,
1. His further submission was that memorandum of deposit was not a simple memorandum of deposit of title deed but it also contains the terms and conditions, therefore, in absence of registration, no right can be claimed on the basis of such documents. To support his contention, he referred the view taken in (1) Mst. Begum v. Mst. Patimabhat PLD 1961 Karachi 537; (2) Messrs Eagle Star Insurance Co. Ltd. v. Messrs Usman Sons Ltd. And others PLD 1969 Karachi 123 and lastly (3) United Bank of India Ltd. v. Azirannessa Bewa PLD 1965 SC 274.
11. ' The import of the dictum in above cases is that when the document creates legal relationship of mortgagor and mortgagee in presenti and contains all the terms and conditions, then it requires registration whereas if such documents refers to a past transaction and mention of the deposit is in the past tense i.e. I deposit'. Such an intent, at the time of deposit being in the past, is capable of being proved.
12. ' Learned counsel for the respondent in opposition of such plea has taken two folds contentions; firstly, that in view of the amendment brought in section 49 of the Registration Act by Ordinance by Amendment XIV of 1962 promulgated on 47-6-1962, whereby clause (c) with proviso were deleted.
13. Therefore, the plea raised is not available and judgment referred are inapt to the facts and circumstances of the present case. He pointed out that effect of the amendment was examined by the Division Bench of this Court in The Pakistan Employees Co-Operative Housing Society Ltd., Karachi v. Mst. Anwar Sultana PLD 1969 Karachi 474, wherein the question for consideration was whether the matter of admissibility of Exh.41 (lease of immovable property) is governed by the amended or unamended section 49, which was amended during the pendency of the suit and if, therefore, the admissibility of the document is only a procedural matter, then it would be governed by the amended section which does not contain clause (c) and the proviso to the original section.
14. ' After referring various case-law on subject, the learned members of the Bench held that the question of admissibility or otherwise of a document is indeed nothing more than a mere matter of procedure, and must be governed by the law obtaining in this behalf for the time being, there being no vested right in procedure Clauses (a) and (b) of the unamended section 49 of the Registration Act may indeed be regarded as being in the nature of substantive provisions but no such sanctity is attached to clause (c) thereof which merely laid down that no document required by section 17 or by provision of the Transfer of Property Act, to be registered shall be received as evidence of any transaction affecting such property or conferring such power, unless it had been registered. As in the amended section 49 this clause does not find any place, it is clear that the prohibition contained therein is no longer operative.
15. ' Second limb of the arguments of respondent's counsel was that the instant appeal emanates from the provisions of special law i.e. Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997, which contains an overriding provisions in subsection (4) of section 17 ibid, which overrides all the provisions of general law in this regard. Subsection (4) thereof says that notwithstanding anything contained in any other law, the Banking Court shall not refuse to accept in evidence any document creating, or purporting to create, or indicating the creation of a mortgage, charge, pledge or hypothecation in relation to property merely because it is improperly stamped or is not registered and no such document shall be impoundable by the Banking Court.
16. Therefore, the plea is not tenable.
17. ' The dictum of the cases cited by learned counsel for the appellant interpreting clause (c) of section 49 of the Registration Act is inapt in view of the repeal of the said clause. Secondly subsection (4) of section 17 of the Late Act XV of 1997 overrides the provisions of general law and not only makes the documents admissible but also creates right in absence of registration.
18. ' We are of the view that the execution of documents are not disputed. The amount due is also not disputed. The plea that memorandum or deposit of title deed in absence of registration neither creates any right nor same is admissible in evidence is bereft of any merits. Therefore, the pleas are meritless. The appeal is dismissed in limine, however, with no order as to costs.