Judgment :- SRINIVASAN, J. 1. The only question in this Appeal is whether there is valid equitable mortgage in favour of the plaintiff, which is the Appellant. There is no dispute that the title deeds relating to the suit properties were deposited with the plaintiff on 16.10.1975 with an intent to create a security for the loans obtained by the defendants from the plaintiff. The contention put forward by the defendants in the course of evidence is that the deposit was made in Kovilpatti and not in Tirunelveli and therefore, there could not be any equitable mortgage by deposit of title deeds. Kovilpatti is not one or the notified towns. Such a contention was not put forward in the written statement. The trial court has rightly disbelieved the case advanced by the defendants in the evidence. The plaintiffs evidence clearly proves that the deposit of title deeds was made at Tirunelveli, which is one of the notified towns. Hence, there was deposit of title deeds with a view to create an equitable mortgage. 2. It is then contended that the two letters which evidence the deposit of title deeds require registration and as they are not registered, there is no valid equitable mortgage which can be enforced in a court of law. The trial court accepted that contention and granted only a money decree in favour of the plaintiff. Ex. A-26 is the letter written by the first defendant to the Manager of the plaintiff bank at Tirunelveli Junction on 17.10.1975. The trial court accepted that contention and granted only a money decree in favour of the plaintiff. Ex. A-26 is the letter written by the first defendant to the Manager of the plaintiff bank at Tirunelveli Junction on 17.10.1975. The relevant portion of the letter reads thus:— “This is to place on record that to secure the facility/s referred to above granted to me, at your Kovilpatti Branch, I/We have already deposited with you at Tirunelveli Junction on 16.10.1975 the title deeds relating to my/our properties (situated at Kumararethinapuram) and as described in Schedule “A” herewith attached with intent to create an equitable mortgage by deposit of title deeds for which you have agreed in respect of properties fully described in the Schedule B herewith attached on the said properties together with all structures and machinery standing thereon and to be put up in future to secure the said facility/s due and owing to me, to you inclusive of renewals thereof from time to time together with interest thereon and/or any other monies that may become due and payable from time to time by me to you and/or any liability arising out of the aforesaid fecility/s granted and undertaken by you in that behalf and payable by me/to you as also such other and further liability up to a sum of Rs. 2,00,000/- (Rupees two lakhs only) which may be advanced to me in future by you.” Ex. A-27 is a similar letter written by the second defendant on the same day relating to his properties and the title deeds deposited by him. The language of the letter is ad idem with that of Ex. A-26. 3. The letters by themselves do not purport or operate to create, declare, assign, limit or extinguish any right, title or interest in the immovable properties referred to therein. A document shall be registered if it falls under Clause (b) of Section 17(1) of the Registration Act. In the present case, we have extracted the operative portions of the letters. The remaining parts of the letter are only schedules containing the description of the documents deposited and description of the properties to which they relate. 4. A document shall be registered if it falls under Clause (b) of Section 17(1) of the Registration Act. In the present case, we have extracted the operative portions of the letters. The remaining parts of the letter are only schedules containing the description of the documents deposited and description of the properties to which they relate. 4. Section 58(f) of the Transfer of Property Act defines a mortgage by deposit of title deeds, as follows:— “Where a person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay, and in any other town which the State Government concealed may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to the immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title deeds” Section 59 provides that where the principal money secured is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of title deeds, can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. Thus, a mortgage by deposit of title deeds is excepted from the operation of Section 59 of the Transfer of Property Act. 5. The Supreme Court had occasion to consider the provisions of Section 58(f) and Section 59 of the Transfer of Property Act in United Bank of India Ltd. v. Messrs. Kakharam Sonaram & Co. and others ( AIR 1965 SC 1591 ). The relevant portion in the judgment is in the following terms: “(3) The letter written by Lakharam-Ex. 7(a) on August 9, 1945 reads as follows: ‘I hearby authorise my son Mr. Babulal Ram to deposit with you on my behalf at your Calcutta Office, the following title deeds with a view to create an equitable mortgage on the said properties to make your advances in the A/c of Messrs. Lekharam Sonaram and Co., Giridih, better secured. I hereby further declare that I am the sole owner of the Giridih property as per schedule below and am legally joining heir with my sons dealing in the name of Messrs. Lekharam Sonaram and Co. of the Malho property as d escribed in the schedule below. Lekharam Sonaram and Co., Giridih, better secured. I hereby further declare that I am the sole owner of the Giridih property as per schedule below and am legally joining heir with my sons dealing in the name of Messrs. Lekharam Sonaram and Co. of the Malho property as d escribed in the schedule below. I hereby further declare that both the properties described in the schedule are free from all encumbrances and nobody else has any claim, right or title to the properties. And I hereby declare that the deposit will give you a valid legal title over my said properties as mortgagee until all the obligations of the Messrs. Lekharam Sonaram and Co. with your Giridih branch are duly satisfied. Particulars of Properties 1. Giridih Property 2. Malho Property (4) On August 10, 1945, Sonaram, Defendant No. 3, brother of Defendant No. 4, addressed a letter (Ex. 7(b) to the plaintiff bank to the following effect: “We hereby authorise Mr. B.L. Gupta, my younger brother, to deliver you the title deeds for depositing and to negotiate with you further in this respect. We hope you will do the needful and oblige us. Your Mr. Basak had been to our Office and assured us to allow us an extra O/D against our Mica stock, for another Rs. 40,000/-. We have already had the facility of a lakh for which we thank you, but still, it is insufficient for the volume of our business. We hope you will surely extend your favour and make us one of your obliged clients. Thanking you once more. NB: Though Rs. 40,000/- will not serve our purpose, we request Mr. Basak to increase it further. At this, for the time being, he asked us to manage with it and later on he will raise it further. Yours faithfully”. The Court held that the document was not part of the transaction as it does not represent concluded negotiations between the parties. While setting out tests to determine whether a particular document is a part of the transaction of mortgage and requires registration, the Court said as follows:— “In Sundarachariar v. Narayan Ayyar 59 Ind App 68: (AIR 1931 PC 36 = 33 L.W. 501), the plaintiff had verbally agreed at Madras to make further advance to the defendants, making Rs. 60,000/- in all, upon the deposit of certain documents of title. 60,000/- in all, upon the deposit of certain documents of title. The defendants agent sighed and handed to the plaintiff a memorandum stating ‘As agreed upon in person, I have delivered to you the undermentioned documents as security’- a list of the documents following, also a promissory note for Rs. 60,000. After examination of the documents, the agreed amou nt was handed over to the plaintiff. It was held by the Judicial Committee that the memorandum was not a document which required registration, even if the agreed advance was conditional upon it being given; and that, there being no written agreement, the memorandum as well as oral evidence, was admissible in evidence to prove the intent to create a security by deposit of the documents named. The same view was expressed by this Court in Rachpal Mahraj v. Bhagwandas , 1950 SCR 548 AIR 1950 SC 272 in which it was pointed out that the question whether a memorandum of deposit of title deeds is compulsorily registrable under S. 17 of the Indian Registration Act, 1980 depends on whether the parties intended to reduce their bargain regarding the deposit to the form of a document. If so, the document required registration, If on the other hand, its proper construction and the surrounding circumstances lead to the conclusion that the parties did not intend to do so, there being no express bargain, the document being merely evidential did not require registration. If so, the document required registration, If on the other hand, its proper construction and the surrounding circumstances lead to the conclusion that the parties did not intend to do so, there being no express bargain, the document being merely evidential did not require registration. In that case, accounts were taken relating to the appellants dealings with the respondents on a certain date and the appellant gave certain title deeds to the respondents for being held as security for the amounts then found due and which may become due, and on the same day the appellant gave a memorandum to the respondents in the form of a letter addressed to the respondents which stated as follows:— “We write to put on record that to secure the repayment of the money already due to you from us on account of the business transactions between yourselves and ourselves and the money that may hereafter become due on account of such transactions, we have this day deposited with you the following title deeds in Calcutta at your place of business at No. 7, Sambhu Mullick Lane, relating to our properties at Samastipur with intent to create an equitable mortgage on the said properties to secure all moneys including interest that may be found due and payable by us to you on account of the said transactions’. It was held by this Court that the parties did not intend to create a charge by the execution of the document, but merely to record a transaction which had already been concluded and under which rights and liabilities had already been created and the document did not require registration.” 6. The ruling will apply to the present case. It is argued by the learned counsel for the respondent that in this case, the two letters Exs. A-26 and A-27 refer to the maximum liability of Rs. 2 lakhs and he submits that they contain the terms of the contract and therefore the documents require registration. We are unable to accept this contention. We have already extracted the terms of the document. Nothing has been said about the rate of interest or the amount actually borrowed and to be borrowed. Nor is there any reference to the method of repayment or time for repayment. None of the terms of the contract find a place in the documents. We have already extracted the terms of the document. Nothing has been said about the rate of interest or the amount actually borrowed and to be borrowed. Nor is there any reference to the method of repayment or time for repayment. None of the terms of the contract find a place in the documents. Just because the maximum liability is mentioned, it does not mean that it is one of the terms of the contract and that all the terms of contract find a place in the documents. Hence, there is no substance in the contention that the documents require registration. Moreover, the documents clearly refer to the fact that the title deeds were deposited on 16.10.1975 with an intention to create an equitable mortgage. That clearly shows that the mortgage was created even on 16.10.1975 and the transaction of mortgage was completed by then. It is also seen from the evidence that the parties executed a promissory note on 18.10.1975. It is marked as Ex. A-1. Thus, by no stretch of imagination, it can be contended that Exs. A-26 and A-27 contain all the terms of the transaction and therefore they require registration. 7. We have no hesitation to hold that there is a valid equitable mortgage in favour of the plaintiff and it is entitled to a decree on the basis of a mortgage. The judgment and decree of the trial court, in so far as they negative the prayer for the grant of mortgage decree in favour of the plaintiff, are set aside. There will be a decree in the suit O.S. No. 244 of 1980 on the file of the Principal Subordinate Judge, Tuticorin as prayed for by the plaintiff. 8. The Appeal is allowed with costs.