STATE OF HARYANA & OTHERS versus NAVIR SINGH AND ANOTHER

Citation: [2013] 9 S.C.R. 949 · Decided: 07-10-2013 · Supreme Court of India · Bench: C.K. PRASAD · Disposal: Appeal(s) allowed
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[2013] 9 S.C.R. 949 
STATE OF HARYANA & OTHERS 
v. 
NAVIR SINGH AND ANOTHER 
(Civil Appeal No. 9030 of 2013 etc.) 
OCTOBER 07, 2013 
[CHANDRAMAULI KR. PRASAD AND KURIAN 
JOSEPH, JJ.] 
TRANSFER OF PROPERTY ACT, 1872: 
A 
B 
c 
ss.59 and 58(f) - Mortgage and mortgage by deposit of 
title deeds - Discussed. 
s. 58(f) - Mortgage by deposit of title deeds - Held: Charge 
of mortgage can be entered into revenue record in respect of 
mortgage by deposit of title-deeds and for that, instrument of D 
mortgage is not necessary. 
REGISTRATION ACT, 1908:. 
s. 17(1)(c) - Registration of instrument creating interest -
E 
Mortgage by deposit of title deeds - Held: When debtor 
deposits with creditor title-deeds of property for the purpose 
of security, it becomes mortgage in terms of s. 58(f) of 
Transfer of Property Act and no registered instrument is 
required uls. 59 thereof, as in other classes of mortgage -
Mortgage by deposit of title-deeds may be effected in 
F 
specified towns by debtor delivering to his creditor documents 
of title to immovable property with intent to create a security 
thereon - No instrument is required to be drawn for this 
purpose - However, parties may choose to have a 
memorandum prepared only showing deposit of title-deeds -
G 
In such a case also registration is not required and, therefore, 
payment of registration fee and stamp duty is not required -
Letter of Finance Commissioner would apply in cases where 
949 
H 
950 
SUPREME COURT REPORTS 
[2013] 9 S.C.R. 
A the instrument of deposit of title-deeds incorporates terms and 
conditions in addition to what flows from the mortgage by 
deposit of title-deeds - Transfer of Property Act, 1872 · - ss. 
5B(f) and 59 - Letter dated 29.3.2007 issued by Finance 
Commissioner. 
B 
The instant appeals arose from the orders of the High 
Court directing entry of charge in the revenue records on 
the basis of mortgage created by deposit of title-deeds. 
The question for consideration before the Court was: 
"whether 'charge' of mortgage can be entered in the 
C revenue record in respect of a mortgage effected by 
deposit of title-deeds without its registration and 
payment of registration fee and stamp duty". 
Disposing of the appeals, the Court 
D 
HELD: 1.1 Section 17(1)(c) of the Registration Act, 
1908 provides that a non-testamentary instrument which 
acknowledges the receipt or payment of any 
consideration on account of the creation, declaration, 
assignment, limitation or extension of any such right, title 
E or interest, requires compulsory registration. Mortgage, 
inter alia, means transfer of interest in the specific 
immovable property for the purpose of securing the 
money advanced by way of loan. Mortgage by deposit of 
title-deeds is sanctioned by law uls. 58(f) of the Transfer 
F of Property Act in specified towns. Mortgage by deposit 
of title-deeds acknowledges the receipt and transfer of 
interest. Section 59 of the Transfer of Property Act 
mandates that every mortgage other than a mortgage by 
deposit of title-deeds can be effected only by a registered 
G instrument. In the face of it, when the debtor deposits with 
the creditor title-deeds of the property for the purpose of 
security, it becomes mortgage in terms of s. 58(f) of the 
Transfer of Property Act and no registered instrument is 
required u/s. 59 thereof, as in other classes of mortgage. 
H [Para 14) [956-F-H; 957-A) 
STATE OF HARYANA v. NAVIR SINGH. 
951 
1.2 The essence of mortgage by deposit of title-deeds A,· 
is handing over by a borrower to the creditor title-deeds 
of immovable property with the intention that those 
documents shall constitute security, enabling the creditor 
to recover the money lent. After the deposit of the title-
d eeds the creditor and borrower may record the B 
transaction in a memorandum but such a memorandum 
would not be an instrument of mortgage. A memorandum 
reducing other terms and conditions with regard to the 
deposit in the form of a document, however, shall require 
registration u/s. 17(1)(c) of the Registration Act, but in a c 
case in which such a document does not incorporate any 
term and condition, it is merely evidential and does not 
require registration. [Para 14] [957-B-D] 
Rachpal Mahraj v. Bhagwandas Daruka 1950 SCR 548 0 
=AIR 1950 SC 272 - relied on. 
United Bank of India v. Mis. Lekharam Sonaram & Co. 
AIR 1965 SC 1591 - referred to. 
1.3 The letter dated 29th March, 2007 of the Finance E 
Commissioner inter alia makes "instru
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