NAIMUDDIN, J.----This is a High Court Appeal under clause 3 of the Law Reforms Ordinance, 1972 from judgment and decree of a learned Single Judge of this Court dated 12-9-1974, passed in a mortgage suit, being Suit No. 223 of 1972, filed by the Commerce Bank Limited, Karachi (hereinafter called the Bank) under Order XXXIV of the Code of Civil Procedure, 1908 for sale of the property bearing No. 21-A, Gulberg, Lahore.
2. The material facts giving rise to the suit are: The appellant by her letter dated 22nd October, 1968 (Exh, 7) requested the Bank to give a demand loan in the sum of Rs. 5,15,280.60 against equitable mortgage of her property bearing No. 22-A, Gulberg, Lahore, She agreed to deposit the title deed of the said property with the Bank within a week. The Bank granted the loan on the same day on the appellant executing a promissory note for the amount of the loan as collateral security. The loan was repayable in three instalments of Rs. 1,00,000 by 5-6-1969, by 15-9-1969 and by 1-1-1970 and the balance amount in four quarterly instalments with interest at 8 per cent. Per annum with monthly rests or at such lesser rate as might have been determined by the Chairman of the Bank.
3. It appears that the Bank had filed a suit, being Suit No. 520 of 1968, in the Court of Administrative Civil Judge, Rawalpindi against the son of the appellant, namely, Mujib-ur-Rehman since deceased, for recovery of a sum of Rs. 5,15,260.60. It further appears that the loan granted by the Bank to the appellant and adjusted against the liability of her late son and the suit filed by the Bank against him in the Court in Rawalpindi was withdrawn.
4. However, the appellant did not deposit the documents of title of the property within one week as promised by her in the letter (Exh. 7). There--fore, the Bank by its letter dated 29th October, 1968, requested her to deposit the documents within two days. The appellant by her letter of 5th November, 1968 (Exh. 11) replied that she was searching for the documents and promised to send the same within 15 days. However, on 13th January, 1969, the appellant deposited with the Bank the sale deed comprising of two properties bearing No. 21 [21-A] and 22-A, Gulberg, Lahore but only charging the property bearing No. 21-A, as evidenced by Exh. 14.
5. Thereafter, the appellant did not pay the amount of the loan as agreed and subsequently promised by her and therefore, the Bank filed a suit under Order XXXIV, C. P. C. Being Suit No. 223 of 1972, for sale of the mortgaged property, on the original side of this Court.
6. In defence the appellants raised a number of pleas which are embodied in the following issues framed by the learned Single Judge on the original side:
(1) Is the suit within time ?
(2) Has this Hon'ble Court territorial jurisdiction to try the suit ?
(3) Are the alleged equitable mortgage and the collateral security not unconscionable ?
(4) Were the alleged equitable mortgage and collateral security created lawfully for lawful purpose and for lawful consideration ?
(5) Is Abdul Aziz Ghafoor Khan, minor son of Mr. Mujib-ur-Rehman Khan, a necessary party to the suit ?
(6) Has the suit been signed, verified and presented by an authorised person, if not, with what effect ?
(7) Does the suit amount include usurious interest, compound interest, penal interest and other charges, if so, to what extent and with what effect ?
(8) Are the plaintiffs entitled to recover any money from the defendant, if so, to what extent ?
(9) Are the plaintiffs liable to render account of all the moneys advanced and received from late Mr. Mujib-ur-Rehman Khan and the defendant ?
(10) Relief ?
The learned Single Judge by the judgment and decree impugned in this appeal decided all the issues in favour of the Bank and against the appellant.
7. Therefore, the appellant has filed this appeal under clause 3 of the Law Reforms Ordinance, 1972.
8. We have heard Mr. Faiz-ud-Din, Advocate for the appellant and Mr. Z. C. Villiani, Advocate for the Bank. Mr. Faiz-ud-Din has, however, raised before us only the following grounds:-
(i) The equitable mortgage was without consideration.
(ii) The mortgage by deposit of title deed was invalid for want of registration.
(iii) The suit was not maintainable as the appellant had deposited the documents of title of property bearing No. 22-A, Gulberg, Lahore, but the Bank filed the suit in respect of the property bearing No. 21-A, Gulberg, Lahore.
(iv) The deposit of title deed did not create any security as the appellant had deposited the same on 11-1-1969 much after the date of loan.
9. The ground that equitable mortgage was without consideration, is covered by the finding of the learned Single Judge on Issue No. 4. He has found that a loan of Rs. 5,15,280.60 was advanced to the appellant which was adjusted against the liability of her son in respect of which a money suit was filed by the Bank against him in the Court in Rawalpindi and on adjustment of the loan the said suit was withdrawn by the Bank.
On the evidence available on record it is not possible to take a view different from the one taken by the learned Single Judge.
The appellant in her letter dated 2nd April, 1972 (Exh. 12) written in the handwriting of her son and signed by her confirmed that in October, 1968, she had assumed the responsibility for payment of the loan advanced to her son and further admitted therein that she had deposited the title deed of her property bearing No. 21-A, Gulberg, Lahore for the benefit of the Bank. Again, in reply to the notice of the Bank dated 14-4-1972 (Exh. 19) calling upon the appellant to pay the amount of Rs.
5,96,179.43 outstanding against her, she in her undated letter (Exh. 13) acknowledged the liability and expressed her intention to pay the same in lump sum and requested the Bank to waive the amount of interest or substantially reduce the same. In view of these clear and categorical admissions and acknowledgments we fail to understand how the plea as to want of consideration could be raised or accepted. Besides in her letter dated 2-4-1970 (Exh. 12) she had given the Schedule for repayment of the loan by instalments and according to this Schedule the entire loan was to be cleared by her by 31-12-1971. Therefore,) we find no substance in this ground and reject it.
10. As regards the ground that the mortgage by deposit of title deeds was invalid for want of registration which appears to be covered also by Issue No. 4, we would point out that no document creating mortgage or containing the terms thereof was executed. There is only a receipt (Exh. 14) issued by the Bank whereby it acknowledged the receipt of the documents of title-delivered by the appellant with intent to create security thereon which is in the following words: 18th January, 1969.
"Received the under-noted documents of property belonging to Begum Hussan Ara A. G. Khan. She has equitably mortgaged 21-A, Gulberg, Lahore to Commerce Bank Limited, for loan availed by her- ----
(1) Sale deed of property at Plots Nos. 21 and 22-A, Gulberg, Lahore, since there is a single deed for both the properties. But the equitable mortgage is only in respect of 21-A, Gulberg.
(2) Site plan of property at 21-A, Gulberg, Lahore.
(3) Valuation Certificate of Messrs Zaheer-ud-din & Co. Architect, for property 21-A, Gulberg, Lahore.
This receipt (Exh. 14) in our view does not require registration as firstly, this is only a receipt executed by the Bank acknowledging the delivery of the documents of title to it by the appellant ; secondly, the statement contained therein that she has equitably mortgaged the property for the loan availed B by her does not by itself create equitable mortgage nor does it contain an terms on which the security was furnished. Moreover, it is not executed by the appellant, who alone could charge the property with the liability for payment of the amount of the loan
11. The learned counsel for the appellants relied upon Eagle Star Insurance Co. Ltd. v. Messrs Usman Sons Ltd. And others (PLD 1969 Kar. 123) in support of his contention that the memorandum of deposit of title deeds compulsorily requires registration and since it was not registered, it was inadmissible in evidence. However, as stated above no memorandum of deposit of title deeds has been executed by the appellant. In the present ease only a receiptacknowledging the delivery of documents as security has been executed and delivered by the Bank to the appellant and it does not contain the terms on which the security was created. Moreover, a memorandum of deposit of title deeds would require registration and if not registered would be inadmissible in evidence only if it purports in praesenti to create relationship of mortgagor and mortgagee between the parties.
The other documents were also in similar terms and since these docu--ments operated in praesenti they were rightly held to be inadmissible in evidence without registration.
Accordingly, the case cited by the learned counsel is not applicable to facts of the present appeal.
12. However, we may refer to the United Bank of India Ltd. v. Azerannessa Bewa alias AzeZannessa Bewa (PLD1965SC274) wherein certain immovable properties were equitably mortgaged by deposit of title deeds with the Bank by two letters which were in very similar terms, and the relevant statements made therein were as follows;--- This is to put on record that---- this day I deposited with you with your Head Office in Calcutta the documents specified in the Schedule hereto-- with intent to create an equitable mortgage upon all my rights, title, interest and estate in the properties to which such documents relate; It was observed by his Lordship Cornelius, C. J. (as his Lordship then was) in respect of these letters at page 286 of the report as follows;---- "In our view, the letters here in question, fall within the principle enunciated in the case of Sundarachariar v. Narayana Ayyar, which we observe is not mentioned in the judgment of the High Court. There are no words in these letters which purport to create any relationship in praesenti. The mention of the deposit is in the past tense, f. e. "I deposited". There are no words used to show that in praesenti the security was being created, but it is said "I deposited ...... The documentswith intent to create an equitable mortgage" and in the light of the observations in the judgment of the Privy Council last cited, the possession of such an intent at the time of deposit, being in the past, is capable of being proved by production of the document in evidence. It is indeed probable that the language employed in these "letters of deposit" is derived from the declaration of law by the Judicial Committee in the case of Sundarachariar, which (we say so with respect) is entirely correct. We are accordingly unable to sustain the finding of the learned Judges on the point."
A similar question arose in Sundarachariar v. Narayann Ayyar (AIR 1931PC36) wherein the memorandum merely said; "As agreed upon in person I have delivered to you the undermentioned documents as security."
It was found by the Judicial Committee that the memorandum recorded particulars of documents which "had 270 been delivered as security", that it "does not state what were the terms of the agreement" or indicate the nature of the transaction for which the deeds were deposited as security. Their Lordships further observed; "Even if it was a condition of the advance that the memorandum was to be given, the fact that the memorandum was prepared, signed and handed over to the mortgagee before the advance of the balance of the money to be secured by the deposit could not alter the nature and weaning of the document. It was and remained a list of the documents deposited and nothing more. It did not embody the terms of the agreement between the parties. Upon this view of the matter apart from authority it would in their Lordships' opinion be impossible to hold that the document purported or operated to create or declare any right, title or interest in the property and required to be registered under section 17, Registration Act."
13. We therefore, hold that the receipt is not such a document as created in praesenti or otherwise any charge over or interest in the property p and therefore would not require compulsory registration. Even otherwise, in view of Sundarachariar v. Narayana Ayyar the objection has no substance and we overrule the same.
14. The third ground that the suit was not maintainable as the appellant had deposited the documents of title of property bearing No. 22-A, Gulberg, Lahore, but the Bank filed the suit in respect of the property bearing No. 21-A, Gulberg, Lahore, although is not covered by any of the issues, but since it was raised before the learned Single Judge and he dealt with it, we would deal with it. We, however, find the same is based on misapprehension of facts. No doubt originally the appellant had agreed to secure the loan by equitably mortgaging her property bearing No. 22-A, Gulberg, Lahore, but subsequently she had equitably mortgaged only the property bearing No. 21/A, Gulberg, Lahore, as evidence by plan (Exh. 9), valuation certificate dated 9-12-1967 (Exh. 10), and the receipt dated 18-1-1969 (Exh. 14) all of which relating to property bearing No. 21-A, Gulberg, Lahore. There is no doubt that the sale deed (Exh. 8) is in respect of both the properties bearing No. 21-A, Gulberg, Lahore as well as 22-A, Gulberg, Lahore but the receipt (Exh. 14) clearly states that the appellant has equitably mortgaged the property bearing No. 21-A, Gulberg, Lahore. It Was this property which was equitably mortgaged by her is confirmed by her in her letter d9ted 2-4-1970 (Exh. 12) in the following words; "title deeds of my property No. 21-A, Gulberg. Lahore are already pledged as security with you."
We therefore, find no substance in this ground also and accordingly reject it.
15. Now remains the last ground to be dealt with, which also relates to issue No. 4. It is urged by the learner' counsel that the deposit of title deeds did not create any security as the appellant bad deposited the same much after the date of loan. It has already been noticed that the loan was given to the appellant on 22-10-1968 on her request contained in her letter (Exh. 7) and she had agreed to deposit title deed of the property within a week which she however, deposited on 18-1- 1969 vide (Exh. 14). The question therefore, is whether the loan could be subsequently secured or not by mortgaging the property. The answer can be found in the definition of `mortgage' given in section, 58(a) of the Transfer of Property Act which reads as follows;------ "(a) A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of Moan, an existing or future debts, or the performance of an engagement which may give rise to a pecuniary liability."
From the above definition of the mortgage it will be seen that a mortgage is a security for the payment of money, inter alia for an existing or future debt. However, if any precedent is needed reference may be had to Faiyaz A.I v. Gobind Ram ((1914)18 R D 231) and also to Jitha Bhima and another v. Haji Abdul Vyad Oosman (I L R 10 Bom. 634). In the latter case Farran, J. At page 644 of the report observed as follows : ----- "When there is a debt in existence, and title-deeds are deposited by the F debtor with the creditor to secure the debt, an equitable mortgage is at once created."
It needs no mention that a mortgage by deposit of title deed is one of the forms of mortgage provided by section 58 of the Transfer of Property. Act. Therefore, this ground is also without any substance.
16. We may here record that after bearing the arguments of learned counsel for the parties we bad reserved the judgment but before we could pronounce it, the appellant died and an application by her sole legal representative namely, Abdul Aziz Ghafoor Khan was made for being brought on record, which was allowed by us by the order dated 24-11-1976. At this stage the legal representative was represented by Mr. Naimur Rahman, Advocate. Thereafter, Mr. Naimur Rahman, Advocate submitted his written arguments. However, on 11-1-1977, when the appeal came up for hearing, he stated that be would not urge any other point but would adopt the arguments made by Mr. Faizuddin, Advocate on behalf of the deceased appellant.
17. In the result we find no force in this appeal and dismiss it with costs.