2002 PLP 606 (CLD)

‑‑‑‑S.58W‑‑‑Registration Act (XVI of 1908), S.17‑‑‑Mortgage by deposit of title deeds‑‑‑Memorandums of Deposit of title deeds contained the fact that prior to execution of Demand Promissory Notes, title deeds mentioned in the Schedules of memorandums had been deposited with Bank with the intention of creating an equitable mortgage in favour of Bank over the properties comprised in the title deeds‑‑‑Contention of mortgagors was that mention of sum secured together with rate of interest in such memorandums would make them mortgage deeds requiring compulsory registration under Registration Act, 1908‑‑‑Validity‑‑ Such memorandums showed that mortgage had been created prior to their execution through deposit of original title deeds‑‑ Memorandums merely recorded the earlier deposit of title deeds and did not in themselves create any mortgage in praesenti, thus, were not compulsorily registrable. United Bank of India Ltd. v. Azirannessa Bewa alias Azizannessa Bewa PLD 1965 SC 274 ref. Muhammad Qamar‑uz‑Zaman for Appellants. M.A. Zafar for Respondents. Date of hearing: 12th November, 2001. JAWWAD S. KHAWAJA, J.‑‑‑This appeal calls in question the judgment‑and decree, dated 26‑9‑1994 passed by the Special Judge Banking Court, Lahore.

2. The facts of this case are relatively simple. The appellant Bank filed a suit for recovery of a sum of Rs.3,67,389 before the Banking Court on 24‑8‑1993. The respondents/defendants filed an application seeking leave to appear and defend. The said application, however, was dismissed as being without merit. Thereafter, the appellant‑Bank was required by the Court to adduce it evidence, which it did. The evidence was documentary comprising of Exh.P.1, which was a demand promissory note dated 23‑12‑1982 executed by the respondent firm in favour of the appellant‑Bank. Exh.P.2 was also a demand promissory note dated 9‑8‑1983. The appellant‑Bank further produced Exh.P.3 and Exh.P.4 which are in the nature of memorandums of deposit of title deeds which record the fact that prior to the execution of the said memorandums dated 23‑12‑1982 and 9‑8‑1983 respectively, the title deeds mentioned in the schedules to the said memorandums, had been deposited with the appellant‑Bank with the intention of creating an equitable mortgage in favour of the Bank over the properties comprised in the title deeds.

3. The learned Special Judge Banking Court examined the aforesaid Exh.P.3 and Exh.P.4 and came to the conclusion that the said instruments were compulsorily registrable under section 17 of the Registration Act. In support of this conclusion the learned Special Judge relied upon an extract from a commentary on the Transfer of Property Act. The said extract merely lays down the general law which has to be applied to the facts and circumstances of each case. In the present case, the two memorandums Exh.P.3 and Exh.P.4 have been examined by us. These documents clearly show that the mortgage was created prior to the execution of these documents through deposit of original title deeds. The memorandums merely record the earlier deposit of title deeds and do not in themselves create any mortgage.

4. Learned counsel for the respondents argued that the mere fact that the sum secured together with the rate of interest had been set out in the aforesaid Exh.P.3 and Exh.P.4, was sufficient to establish that the said documents were, in fact. The mortgage deeds requiring compulsory registration under the registration Act. We are unable to agree with this contention of learned counsel for the respondents because of the wording of H the memorandums noted above which does not purport to create any mortgage in praesenti. We are fortified in our conclusion by the judgment of the Honourable Supreme Court in the case titled United Bank of India Ltd. v. Azirannessa Bewa alias Azizannesa Bewa (PLD 1965 SC 274). In this view of the matter, we are left in no manner of doubt that the two memorandums of deposit of title deeds, dated 23‑12‑1982 and 9‑8‑1983 are not compulsorily registrable. On this score, therefore, we find that the impugned judgment did not proceed in accordance with law.

5. In, view of the erroneous findings of the learned Special Judge 'Banking .on the question of registration, the learned Special Judge fell in error by holding that the suit of the appellant Bank was required to be filed within 3 years rather I than 12 years from the date of last acknowledgement of liability The last acknowledgement was made by the respondent farm on 9‑8‑1983 through repayment of a part of the loan obtained by it. Since we have held that a mortgage had been duly created by the respondents in favour of the appellant Bank by ‑deposit of title deeds, it follows that the period of limitation for filing of the appellant's suit was 12 years from 9‑8‑1983 and not 3 years as held by the learned. Special Judge. Banking. The suit having been filed on 24‑8‑1993 was, therefore, well within time.

6. In view of the above discussion, we set aside the judgment and decree of the learned Special Judge, Banking dated 26‑9‑1994 and decree the suit of the Bank for a sum of Rs.3,67,389 together with the agreed return at the rate of 14% per annum from the date of the filing of the suit till realization of the decretal debt. The appellant‑Bank shall also be entitled to its costs throughout. S.A.K./M‑992/L Appeal accepted