R.K. GUPTA. — This is an Appeal preferred by the Appellant under section 20 of the R.D.D.B.F.I. Act, 1993 challenging the order passed by the D.R.T. on 9th June, 2003 in T.A. No. 1190/2000, whereby the Original Application so preferred by the Appellant has been allowed only against the original borrower i.e., Respondent No. 1 in the present Appeal and so far as the Original defendant Nos. 2 to 6 are concerned, they have been discharged. The Appeal which was preferred by the Appellant before this Tribunal was said to be barred by time, therefore, this Tribunal passed an order on 20th January, 2005 by which this Tribunal held that the appeal is not barred by time and as a consequence of the same, the earlier order passed by this Tribunal on 26th August, 2003 was not recalled. The contesting Respondent Sri Mahendra Prakash Daga filed two writ petitions before the Hon'ble High Court of Judicature at Allahabad, which were registered as Writ-C No. 17155/05 and Writ-C No. 42219/11. The said writ petitions were preferred against the orders dated 20th January, 2005 and 6th July, 2011. The said two petitions were finally decided by the Hon'ble High Court vide its order dated 14th March, 2012 by which the Hon'ble High Court has confirmed the order dated 20th January, 2005 subject to the cost of Rs. 30,000/- which was to be paid by the Bank i.e., Appellant and thereafter, the case was directed to be decided on merits. 2. The relevant facts for adjudication of the present Appeal are that the bank filed a Civil Suit before the Civil Judge (Senior Division), Muzaffarnagar for recovery of a sum of Rs. 6,46,69,779.92. All the Respondents were the parties as the defendants before the Civil Court. The said Civil Suit ultimately was transferred to the Tribunal after promulgation of the R.D.D.B.F.I. Act, 1993, which has been decided by the impugned order dated 9th June, 2003. 3. The Tribunal while deciding the said Civil Suit has directed to issue the Recovery Certificate for a sum of Rs. 6,46,69,779,92 against the principal borrower i.e., Respondent No. 1 and has exonerated the defendant Nos. 2 to 6 from the liability, against which the Bank has preferred the present Appeal and while preferring the present Appeal, the bank has wrongly impleaded as Respondent, No. 1. 6,46,69,779,92 against the principal borrower i.e., Respondent No. 1 and has exonerated the defendant Nos. 2 to 6 from the liability, against which the Bank has preferred the present Appeal and while preferring the present Appeal, the bank has wrongly impleaded as Respondent, No. 1. Because there was no occasion to implead the said Respondent as claim was allowed against him. 4. While arguing the case, the learned Counsel for the bank Sri G.P. Agrawal also submitted that in the present Appeal, no relief as such is claimed against the Respondent No. 1 i.e., Rainbow Steels Ltd., which was the principal borrower. In view of this, the Appeal is treated to be an Appeal against the Respondent Nos. 2 to 6. 5. The Tribunal has exonerated the defendant Nos. 2 to 6, who were the guarantors on the ground that there was a substitution of a new contract through the Guarantees, which were executed in pursuance to the fresh guarantee under the fresh sanction vide letter dated 22nd February, 1991. 6. The Tribunal was of the view that since it was a fresh guarantee in pursuance to the fresh sanction letter dated 22nd February, 1991 and there was innovation and substitution of a contract, therefore, earlier guarantees stood discharged and when a new guarantor was inducted, then security through D.P. Note was not presented, therefore, in pursuance to the section 74 of the negotiable Instruments Act, there is no liability of the present guarantors i.e., defendant Nos. 2 to 6 to discharge the dues. For this reason, they are discharged. 7. Prior to 1990, temporary Non-fund based limits were sanctioned aggregating to Rs. 52.00 lacs and against the same, Mr. Mahendra Prakash Daga, Mr. Alok Maheshwari and Mr. Anirudh Kumar who were defendant Nos. 2, 3 and 5 before the Tribunal stood guarantors. Subsequently, the said limit was enhanced to Rs. 103 lacs on 10th April, 1990. Thereafter, vide letter dated 23rd May, 1990 a regular sanction was granted and thereafter, supplementary sanction was issued on 1st June, 1990, by which the fund based limits as well as non fund based limit were guaranteed by the said defendants by endorsement of D.P. Note. The same was in relation to C.C. Limit for a sum of Rs. 55.00 lacs, bills Discounting for a sum of Rs. The same was in relation to C.C. Limit for a sum of Rs. 55.00 lacs, bills Discounting for a sum of Rs. 25.00 lacs, L/C for a sum of Rs. 500 lacs, B/G for a sum of Rs. 20.00 lacs, Deferred Payment Guarantee for a sum of Rs. 34.92 lacs and the aggregate amount was Rs. 634.92 lacs. 8. Thereafter, according to the Bank, vide letter dated 22nd February, 1991 the said sanctioned limit was enhanced and according to the Appellant, it is not the limits with regard to the enhancement of earlier benefit, but it is a letter of fresh sanction and after when the fresh sanction has been granted in relation to the CC Hypothecation of Rs. 70.00 lacs, C.C. Book Debts of Rs. 40.00 lacs, Bills discounting of Rs. 65.00 lacs, which was never utilized according to the defendant Nos. 2 to 6, and W/CT/L of Rs. 20.00 lacs and thus, the total fund Based Limits of Rs. 19,5.00 lacs was a new sanction. Rs. 20.00 lac was interchangeable. After the said letter, the new documents were executed according to the said Respondents and the said documents were executed on 18th March, 1991 and these documents were afresh documents in pursuance to the fresh sanction letter dated 22nd February, 1991 therefore, it was objected that the letter dated 22nd February, 1991 cannot be treated to be in continuation of earlier sanction and it being a new sanction, there was no liability of the defendants with respect to the earlier facility and their facility ultimately may come after when they executed the documents in relation to the guarantee on 18th March, 1991 after the new sanction letter dated 22nd February, 1991. 9. The Tribunal also held in its judgment that the letter dated 22nd February, 1991 was a new sanction and since thereafter the new documents have been executed, therefore, according to the Tribunal also, the earlier contract has been innovated and substituted by a new contract, therefore, there is no liability in respect of the previous sanction of the defendant Nos. 2 to 6. The original guarantors were the defendant Nos. 2, 3 and 5 i.e., Mr. Mahendra Prakash Daga. Mr. Alok Maheshwari and Mr. Anirudh Kumar. After when the new papers were executed, then new guarantors i.e., defendant No. 4 Mr. 2 to 6. The original guarantors were the defendant Nos. 2, 3 and 5 i.e., Mr. Mahendra Prakash Daga. Mr. Alok Maheshwari and Mr. Anirudh Kumar. After when the new papers were executed, then new guarantors i.e., defendant No. 4 Mr. Vineet Maheshwari and defendant No. 6 Smt. Vipin Lata Daga were inducted as new guarantors. 10. One of the interesting facts is also relevant that the Respondent No. 1 was the Company, which was directed to liquidate the dues in terms to the order passed by the Hon'ble Allahabad high Court on 9th March, 1995. The suit was already instituted against the said company. Official Liquidator took over the charge of the property. 11. The Tribunal was of the view that the defendant No. 5 Mr. Anirudh Kumar was the guarantor in respect of the credit facility granted under the sanction letters dated 23rd may, 1990 and 1st June, 1990 and so far as he is concerned, he was replaced by the defendant No. 4-Mr. Vineet Maheshwari, when afresh sanction was granted on 22nd February, 1991. Therefore, on that basis it is submitted that there was no liability of any of the guarantors because of innovation and substitution of the contract. 12. Learned Counsel appearing for the Appellant-bank submitted that the letter dated 22nd February, 1991 cannot be treated to be a fresh sanction, but in fact it is only a grant to the enhancement of earlier facility. Thus, it is submitted that the Tribunal has wrongly constituted the letter dated 22nd February, 1991 to be a new sanction, it is also submitted that the letter dated 22nd February, 1991 is a continuation to the earlier one, as by this letter only limit was enhanced, therefore, guarantee be continued as guaranteed by the earlier guarantors until it is revoked by the letter in writing or the debt is fully discharged. The effect of continuing Bank Guarantee continues to be there and the Tribunal has wrongly exempted the said defendants. It is also submitted that the new guarantee deeds which have been executed relates to the enhancement of limit by the bank under the sanction letter dated 22nd February, 1991 and whatever guarantees have been issued after 22nd February, 1991, such guarantees have to be understood which referred to the enhancement of limit. 13. It is also submitted that the new guarantee deeds which have been executed relates to the enhancement of limit by the bank under the sanction letter dated 22nd February, 1991 and whatever guarantees have been issued after 22nd February, 1991, such guarantees have to be understood which referred to the enhancement of limit. 13. It is contended that when the Tribunal has held that the principal borrower, i.e., Rainbow Steels Ltd. is liable for the payment of the amount and liability of the guarantors being coextensive with a borrower, the guarantors could not have been discharged from the liability. It was also submitted that the Tribunal was wrong in interpreting and that after when fresh contract was entered into on the basis of a fresh sanction, the earlier contract was substituted by the new contract. It was also submitted that the presentment of D.P. note was not the material and when the notice before filing of the Suit was given to the borrower also, then it was the demand raised for payment of the money. Therefore, under these circumstances, the provision as contained under sections 74 or 62 of the Negotiable Instruments Act shall have no application and the demand when was made and was not satisfied by the guarantors, who issued the D.P. Note for a sum of Rs. 90.00 lacs, then the Tribunal was not justified in absolving the guarantors and the Tribunal was wrong in its conclusion that surety stands discharged. 14. It was also submitted that there was no specific denial by the defendants to the pleadings submitted by the Appellant, which are contained from Paras No. 80 to 108 of the Plaint. On this basis, it was submitted that in absence of denial by the said defendants in respect to the previous liability, wherein their guarantee was continuing guarantee, therefore, the liability under the guarantee being a continuing has to be discharged and there was nothing on record to show that the previous guarantee stands discharged. Therefore, the judgment passed by the Tribunal is liable to be set aside. 15. Learned Counsel for the Respondent Nos. Therefore, the judgment passed by the Tribunal is liable to be set aside. 15. Learned Counsel for the Respondent Nos. 2 to 6 Shri R. P. Agrawal submitted that the letter dated 22nd February, 1991 is a letter with respect to the fresh sanction and after the new sanction or fresh sanction, fresh documents were executed, therefore, liability with respect to the previous sanction cannot be clubbed with the liability of the present one, which was sanctioned on 22nd February, 1991. It was submitted that after when a fresh letter was issued and new documents were executed, then it is the case where the earlier contract is to substitute and innovate and thus every guarantor is discharged. It was also contented that the judgment so passed by the Tribunal is correct and the same does not require any interference. It was submitted that when the Company has gone in liquidation under the orders passed by the Hon'ble High Court, then bank should have preferred the claim before the Official Liquidator and since the claim was not filed before the Official Liquidator, therefore, the bank stands in the queue of unsecured creditor and has to be satisfied with the proportionate amount which is to be disbursed by the Official Liquidator. 16. It was also submitted by him that the reason given by him with reference to the non presentment of D.P. Note within reasonable time is correct conclusion drawn by the Tribunal in the light of sections. 62 and 64 of the negotiable Instruments Ace. It was also submitted that the mortgage was not registered even though the title deed was deposited. 17. Before considering the rival submissions, it would be appropriate to reproduce here the letter dated 22nd February, 1991 which in fact is to be interpreted, whether it is a new sanction or this is in continuation of the earlier sanction. Reading of the heading of this letter itself indicates and states "C.&I. Market Segment". Advances Enhancement of Limit". Subsequent to this, it states that as per Head Officer approval/sanction, present credit facilities have been enhanced as enumerated in the letter. Clause 2 further states that the terms and conditions of the enhanced limits given oh Annexure-1 of this letter will remain. 18. Advances Enhancement of Limit". Subsequent to this, it states that as per Head Officer approval/sanction, present credit facilities have been enhanced as enumerated in the letter. Clause 2 further states that the terms and conditions of the enhanced limits given oh Annexure-1 of this letter will remain. 18. The Tribunal unfortunately understood the said letter to be a letter of new sanction and on that basis; the Tribunal below proceeded with to decide the case by holding it to be a fresh sanction. But reading of the said letter does not show that by letter dated 22nd February, 1991 any new sanction was granted but the said letter has to be a letter with reference to the enhancement of earlier credit facilities, which were enjoyed by the defendants in pursuance to the earlier contract dated 1st June, 1990. 19. On the basis of the aforesaid, I am inclined to hold that the Tribunal was not correct in treating or interpreting the letter dated 22nd February, 1991 to be a new sanction. With reference to the earlier facility, which was extended on 1st June, 1990 there were three guarantors i.e., Defendants. Nos. 2, 3 & 5. The reading of the guarantee itself indicates that this is continuing Guarantee in pursuance to the section 129 of the Indian Contract Act, 1872. 20. Section 130 of the Indian Contract Act, 1872 provides "revocation of continuing guarantee". It is provided that a continuing guarantee may at any time be revoked by the surety, as to future transactions, by notice to the creditor. Thus, by virtue of cumulative sections 129 and 130 of the Indian Contract Act, 1872 as said, if the Guarantee is continuing Guarantee, then such Guarantee at any time be revoked by the Surety as to future transactions, by notice to the creditor. In the present case, the letter dated 22nd February, 1991, which the enhancement of earlier facility cannot be understood to me, that the creditor has extended any time to revoke the earlier guarantee. After letter dated 22nd February, 1991 earlier guarantors i.e., defendant Nos. 2 and 3 are also the signatory to the enhanced limit. Along with them, the defendant No. 4 was inducted and defendant No. 5 was withdrawn from the guarantee. After letter dated 22nd February, 1991 earlier guarantors i.e., defendant Nos. 2 and 3 are also the signatory to the enhanced limit. Along with them, the defendant No. 4 was inducted and defendant No. 5 was withdrawn from the guarantee. Thus, after when the limit was enhanced, then only conclusion which can be drawn against the defendants, would be that the liability with reference to the sanction from 1st June, 1990 continues to be there inclusive of defendant No. 5 and so far as the earlier two guarantors are concerned, they will also be stood as guarantors with reference to the enhanced sanction under the letter dated 22nd February, 1991. 21. With reference to the withdrawal of defendant No. 5 from the guarantee, he will not be liable for the enhanced limit, which was sanctioned by the letter dated 22nd February, 1991 but he will continue to be liable under the Guarantee executed with reference to the sanction letter dated 1st June, 1990 and so far as the defendant No. 4 is concerned, he was also the guarantor for enhanced limit, therefore, defendant No. 4 shall not believable for the earlier guarantee in pursuance to the initial sanction on 1st June, 1990. Under these circumstances, the Tribunal cannot be said to be in accordance with the law to exempt the said defendants and all the defendants would be liable in the manner as indicated above. 22. With reference to induction of new guarantor i.e., defendant No. 6 Smt., Vipin Lata Daga she would also be liable because she was accepted the guarantee for a sum of Rs. 7.15 crores. This amount incudes the previous amount, which was due under the sanction letter dated 1st June, 1990 and also the amount, which was due under the enhanced limit vide sanction letter dated 22nd February, 1991. 23. 7.15 crores. This amount incudes the previous amount, which was due under the sanction letter dated 1st June, 1990 and also the amount, which was due under the enhanced limit vide sanction letter dated 22nd February, 1991. 23. This could be viewed from another angle that the following defendants against whom the date is shown, have confirmed the balance which was to be recovered from them by the Bank, alongwith written arguments, the Counsel for the bank has shown the date against their names, which itself indicates that even after the letter dated 22nd February, 1991 which according to them is a new sanction, yet, they have acknowledged their liability much after the letter dated 22nd February, 1991 and the acknowledgment of their liability is combined i.e., with reference to the earlier sanction under the letter dated 1st June, 1990 and under the letter dated 22nd February, 1991. Details of acknowledgment with regard to the confirmation of balance from time to time by the defendants are as under: Balance as on Confirmation by Date of confirmation Amount Account  31.8.1992 Sri Alok Maheshwari 3.9.1992 22768012.71 C.C.H.  31.8.1992 Sri Alok Maheshwari 3.9.1992 6000000.00 C.C.H.D.  8.10.1992 Sri M.P. Daga 27.10.1992 31255076.82 C.H.H.   Smt. Vipin Lata Daga 27.10.1992     Sri Alok Maheshwari 27.10.1992    31.3.1993 Sri M.P. Daga 2.4.1993 6000000.00   31.3.1993 Sri M.P. Daga 2.4.1993 44254500.92   31.3.1993 Sr. M.P. Daga 1.4.1993 242738.00   Other writings— Letter No. 1211/91-92 dated 31 3.1992 Letter No. 896/92-93 dated 11.11.1992 Audited balance-sheet of the year 1990-91 Audited balance-sheet of the year 1991-92 24. There is nothing on record and nothing can be understood from the letter dated 22nd February, 1991 which is the sanction of enhanced limit, that bank has further agreed to revoke the continuing Guarantee and directed the defendant Nos. 2 to 6 to issue a new Guarantee by revoking the earlier Guarantee, which were executed by the said defendants. Even after, the letter dated 22nd February, 1991 does not show that the earlier Guarantee executed by the Defendant Nos. 2, 3 and 5 also stood revoked. Under these circumstances, it cannot be said that none of the defendants i.e., from defendant Nos. Even after, the letter dated 22nd February, 1991 does not show that the earlier Guarantee executed by the Defendant Nos. 2, 3 and 5 also stood revoked. Under these circumstances, it cannot be said that none of the defendants i.e., from defendant Nos. 2 to 6 are not liable to pay any amount to the bank, as earlier guarantee was revoked. 25. Reading of the Guarantee executed even after 22nd February, 1991 also does not state that these Guarantees shall be misused by revoking earlier and fresh Guarantee is executed for substituting the earlier one. 26. On the contrary, the letter dated 22nd February, 1991 only states that there have to be terms and conditions of the enhanced limit, but does not say that these terms and conditions would apply in relation to the earlier sanction under the letter dated 1st June, 1990, so that it could be understood to me that there had been complete innovation or substitution of earlier contract. 27. With reference to the another reason given by the Tribunal that the D.P. Note of Rs. 90.00 lacs was executed by the defendant No. 1 and was endorsed by the defendant Nos. 2,3,4 and 6. Since it was not presented within the reasonable time as per section 74 of the Negotiable Instruments Act, therefore, there was no liability of the said defendants. The Tribunal has accepted the said submission and discharged the said defendants. In this reference, this is also to be seen that the D.P. Note being a negotiable instrument has to be put for its presentment. The question of there being a reasonable time for its presentation would not apply in the present case because the Bank could not have demanded the said money until the Bank is dissatisfied with the repayment of the debt. After when the Bank was dissatisfied with the repayment, then a notice was given by the Bank to all the defendants and the said notice was given on 14th September, 1993 i.e., before filing of the suit before the Civil Court. The amount mentioned in the D.P. Note was payable on demand, therefore, demand was raised through notice by the Bank calling upon the defendants to pay the said amount, for which D.P. Note was executed, but the amount as such was not paid. The amount mentioned in the D.P. Note was payable on demand, therefore, demand was raised through notice by the Bank calling upon the defendants to pay the said amount, for which D.P. Note was executed, but the amount as such was not paid. Under these circumstances, there was refusal on behalf of the defendant No. 1 to pay the amount under the D.P. Note. 28. The reasoning given by the Tribunal that the D.P. Note was not presented within reasonable time as per section 74 of the Negotiable Instruments Act, therefore, there is no liability of the said defendants. In this reference this is to be seen that no time limit was fixed for presentation of D.P. Note, which is clear from the said section of the said Act, but place was mentioned for its presentation. Since no time was mentioned and when the Bank found that the account has become irregular, therefore, a notice was given before filing the suit on 14th September, 1993, but it was not honoured by the defendant No. 1, therefore, it cannot be said that the D.P. Note was not presented within reasonable time and there is no liability of the defendants. Such reasoning cannot be accepted because in the D.P. Note on date was fixed for its presentment, only place was mentioned. If the date and period was mentioned in the D.P. Note for its presentment, then there would have been a different question. Similarly, by section 62 of the Negotiable Instruments Act the document has to be presented within time and place mentioned therein. No time was mentioned, but only place was mentioned, therefore, if section 64 is to be read, then it has to be read with section 62 to hold that in spite of mentioning the time in the D.P. Note, the same was not presented within reasonable time after expiry of drawee's time so mentioned therein, then section 74 would apply. The Tribunal unnecessarily travelled on section 74 and section 62 of the Negotiable Instruments Act, 1881 for holding that there is no liability under the D.P. Note of the defendant No. 1. 29. The Tribunal unnecessarily travelled on section 74 and section 62 of the Negotiable Instruments Act, 1881 for holding that there is no liability under the D.P. Note of the defendant No. 1. 29. This is also to be seen that the letter dated 18th March, 1991 written by the defendant No. 1, which is Annexure No. 32 of the record of the Tribunal, shows that the notice of demand even has been dispensed with the defendant No. 1 and therefore it was to be honoured before the demand, but in the present case, there had been demand on 14th September, 1993 which was not honoured. The Tribunal has also lost its sight of this fact. 30. The next" question which is raised, relates to the aspect that when the equitable mortgage was created by filing the documents and the deeds, then it was not registered and it is submitted that merely because letters and affidavits were given, that does not mean that there was an equitable mortgage. It was submitted that creation of equitable mortgage is void and invalid at Muzaffarnagar, which is not notified town, for the purpose of mortgage in section 58 (f) of the Transfer of Property Act, 1882. It also states that the mortgage is void under section 25 of the Indian Contract Act, 1872 for want of consideration. With reference to the said aspect, this is to be seen that for the purpose of creating the mortgagee, the intention has to be gathered and not even deposit of the title deed for it registration. In this reference, the judgment passed by the Hon'ble Delhi High Court in Ishivar Dass Malhotra v. Dhanwant Singh, AIR 1985 Del 83 is relevant, wherein the Hon'ble High Court has considered the judgment passed by the Hon'ble Apex Court in K.J. Nathan v. Marnthi Rao, AIR 1965 SC 430 . The said judgment has already been followed by this Tribunal in Appeal Sr. No. 21/2011 (Shailendra Shrivastava v. Bank of Baroda) and Appeal Sr. No. 101/2010 (Bank of India v. Bank of Baroda) decided on 7th February, 2012. The relevant paras of the judgment passed in Ishivar Das Malhotra v. Dhanwant Singh (supra) are reproduced as under: "12. The expression 'equitable mortgage' does not find mention in the Transfer of Property Act, 1882. No. 101/2010 (Bank of India v. Bank of Baroda) decided on 7th February, 2012. The relevant paras of the judgment passed in Ishivar Das Malhotra v. Dhanwant Singh (supra) are reproduced as under: "12. The expression 'equitable mortgage' does not find mention in the Transfer of Property Act, 1882. Section 58 (f) of the Act describes mortgage by deposit of title deeds. It is as good as any other mode of creating a legal mortgage where under there will be transfer of interest in the property mortgaged to the mortgagees. The expression 'equitable mortgage' which is known in the English Law is loosely used to mean a mortgage by deposit of title deeds. Rather it can be said that in India a mortgage by deposit of title deeds is commonly known as an equitable mortgage but its incidents are not the same as that of an equitable mortgage under the English Law. In K.J. Nathan v. S.V. Maruthi Rao, AIR 1965 SC 430 distinction between an equitable mortgage, as understood in the English Law, and the mortgage, by deposit of title deeds has been brought out by the Supreme Court. Subha Rao J., (as His Lordship then was) speaking for the Court, observed as under : "Under this definition (referring to section 58 (f) of the Transfer of Property Act) the essential requisites of mortgage by deposit of title deeds are, (i) debt, deposit of title deeds, and (iii) an intention that the deeds shall be security for the debt. Though such a mortgage is often described as an equitable mortgage, there is an essential distinction between an equitable mortgage as understood in English Law and the mortgage by deposit of title deeds recognized under the Transfer of Property Act in India. In England an equitable mortgage can be created either, (1) by actual deposit of title deeds, in which case parole evidence is admissible to show the meaning of the deposit and the extent of the security created, or (2) if there be no deposit of title deeds, then by a memorandum in writing, purporting to create a security for money advanced ; see White and Tudor's Leading Case in Equity, 9th Edition, Vol. 2 at p. 77. 2 at p. 77. In either case it does not operate as an actual conveyance though it is enforceable in equity; Whereas under the Transfer of Property Act a mortgage by deposit of title deeds is one of the modes of creating a legal mortgage where under there will be transfer of interest in the property mortgaged to the mortgagee. This distinction will have to be borne in mid in appreciating the scope of ht English decisions cited cited at the Bar. This distinction is also the basis for the view that for the purpose of priority it stood on the same footing as a mortgage by deed." 13. It will thus be seen that a mortgage by deposit of title deeds is like any other mortgage and there is a transfer of interest in the property mortgaged to the mortgagee. The question/therefore of the subsequent purchaser having brought the property subject to a mortgage by deposit of title deeds bona fide with or without notice, is of no relevance. The subsequent purchaser cannot avoid the mortgage by leading evidence to show that he made all reasonable inquiries to find out if the property was subject to a mortgage by deposit of title deeds or not. Section 48 of the Transfer of Property Act does not admit of any such exception. According to this section when a person propose to created, by transfer at different times, rights in or over the same immovable property, and such rights cannot all exist or be exercised to their full extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created. Further proviso to section 48 of the Registration Act enacts that a mortgage by deposit of title deeds shall take effect as against any mortgage deed subsequently executed and registered relating to the same property. Thus a subsequent sale cannot have priority over a mortgage by deposit of title deeds created before the sale. In my view, therefore the Trial Court fell in an error in holding that Harjeet Singh Dhanjal, the subsequent purchaser of the mortgaged property, was not liable on the ground that he took all reasonable care and acted in good faith. 14. In my view, therefore the Trial Court fell in an error in holding that Harjeet Singh Dhanjal, the subsequent purchaser of the mortgaged property, was not liable on the ground that he took all reasonable care and acted in good faith. 14. Before us the argument proceeded on a different line. It was argued by Mr. C.B. Thanai, learned Counsel for Harjeet Singh Dhanjal, that the memorandum (Ex. P-2) was compulsorily registerable under section 17 of the Registration Act and as the same was not registered, it was inadmissible in evidence and any oral evidence was barred under section 91 of the Evidence Act. At the time when Ex. P-2 was put in evidence it was objected to on the ground of admissibility. The Trial Court has not touched this point in its judgment. It is a legal point, and a vexed one. The law relating to registration of document like in the instant case, is to be found in section 59 of the Transfer of Property Act and sections 17 (b), 48 and 49 of the Registration Act. 15. There have been quite a number of cases in the High Courts all over the country, some of which reached the Privy Council and the Supreme Court, in which a mortgage, alleged to have been effected by deposit of title deeds, has been accompanied by a written document, and in which a question has arisen as to whether that document was of such a character as to require registration, the decision in each case has turned upon the nature of the document in question. It is, therefore, unnecessary to multiply the authorities, and it would be sufficient if reference is made to some of the cases decided by the Privy Council and the Supreme Court and also to one decision of this Court. 16. In M. Subramanian v. M.L.R.M. Lutchman, AIR 1923 PC 50 it was held that if the memorandum was of such a nature that it could be treated as the contract for the mortgage which the parties considered to be the only repository and appropriate evidence of their agreement, it would be the instrument by which equitable mortgage was creased and would come within section 17 of the Registration Act. Lord Carson, speaking for the Board, observed: "turning to the document itself, one is led to the same conclusion, "we hand you herewith title deeds, etc..........This pleas hold as security, etc.. Please also hold this as further security, "their lordships have no doubt therefore that the memorandum in question was the bargain between the parties, and that without its production in evidence the plaintiff could establish no claim, and as it was unregistered it ought to have been rejected." In Rachpal Maharaj v. Bhagwandas Daruka, AIR 1950 SC 272 - the Supreme Court dealt with the question of registration of the memorandum given alongwith the title deeds. Patanjali Sastri, J. "..................... When the debtor deposits with the creditor the title deeds of his property with intent to create a security, the law implies a contract between the parties to create a mortgage, and no registered instrument is required under section 59 as in other forms of mortgage. But if the parties chose to reduce the contract to writing, the implication is excluded by their express bargain, and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creating of the mortgage. As the deposit alone is not intended to create the charge and the document, which constitutes the bargain regarding the security is also necessary and operates to create the charge in conjunction with the deposit, it requires registration under section 17 of the Registration Act, 1908, as a non-testamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees and upwards. The time factor is not decisive. The document may be handed over to the creditor alongwith the title deeds and yet may not be registrable.........." In Sundaranchagar v. Narayana Ayyar, AIR 1931 PC 36 dealing with a memorandum which consisted of a list of the title deeds and contained a recital that as agreed upon in person, I have delivered to you the under mentioned documents as security, the Privy Council held that it recorded particulars of documents which, it stated, had been delivered as security in pursuance of an agreement reached in person. It did not state what were the terms of the agreement nor did it indicate the nature of the matter for which the deeds were deposited as security. Since the memorandum in question did not embody the terms of the agreement between the parties, it was held, that it did not require registration. In Hari Shankar v. Kedar Nath, AIR 1939 PC 167 the Board was of the opinion that: "........................ Where, as here, the parties professing to create a mortgage by deposit of title deeds contemporaneously enter into a contractual agreement, in writing, which is made an integral part of the transaction and is itself an operative instrument and not merely evidential, such a document must under the statute be registered." In United Bank of India v. Lakharam S. and Co., AIR 1965 SC 159 the Supreme Court examined the question as to whether the memorandum required registration. It held that: "applying the principle to the present case, we consider that the letter at Ex. 7 (a) was not meant to be an integral part of the transaction between the parties. The letter does not mention what was the principal amount borrowed or to be borrowed. Neither does it refer to rate of interest for the loan. It is important to notice that the letter does not mention details of title deeds which are to be deposited with the plaintiff Bank. We are, therefore, of the opinion that the view of the High Court with regard to the construction of Ex. 7 (a) is erroneous and the document was not intended to be an integral part of the transaction and did not, by itself, operate to create an interest in the immovable property. It follows, therefore, that the document-Ex. 7 (a) did not require registration under section 17 of the Indian Registration Act." In V.G. Rao v. Andhra Bank AIR 1971 SC 1613 Hegde, while dealing with the law relating to the nature of a memorandum given alongwith the deposit of title deeds or one filed thereafter, held as under : "therefore, the crucial question is : Did the parties intend to reduce their bargain regarding the deposit of the title deeds to the form of a document? If so, the document requires registration. If so, the document requires 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, then, there being no express bargain, the contract to create the mortgage arises by implication of the law from the deposit itself with the requisite intention, and the document being merely evidential does not require registration." In Parkash Dev v. New Bank of India, AI; 1968 Del 244 a Division Bench of this Court held that where the memorandum itself constitutes the bargain, registration is necessary." 31. There is no dispute that the liability of the guarantors is co-extensive with the liability of the borrower. In the present case, the Tribunal has allowed the claim against the defendant No. 1 which is the borrower, but the guarantors have been discharged under the garb of innovation or substitution of fresh guarantee. Once the main borrower has been held to be liable for the liability under the sanction letter dated 1st June, 1990 and enhanced sanction dated 22nd February, 1991, then the guarantors would also be liable for the same to the extent under the said letters as liability being co-extensive with the principal borrower. 32. In view of the aforesaid discussions, I find that the judgment passed by the Tribunal is liable to be set aside, wherein so far as it discharges the respondent-defendant Nos. 2 to 6 and the original application against the said defendants stands allowed to the extent as indicated abo\e for the purpose of clarity. The defendant Nos. 2 and 3 since were also the guarantors under the sanction letter dated 22nd February, 1991 for sanction of enhanced limit, therefore, they will be responsible for all the amount in relation to the sanctions under letter dated 1st June, 1990 and 22nd February, 1991. The-defendant No. 4 shall be liable for his liability under the sanction letter dated 22nd February, 1991. The defendant No. 5 would be liable with reference to the liability under the sanction letter dated 1st June, 1990. The defendant No. 6 would be liable with reference to all the amount under the sanction letters dated 1st June, 1990 and 22nd February, 1991 because she has acknowledged the full liability under the old and enhanced sanction. The defendant No. 5 would be liable with reference to the liability under the sanction letter dated 1st June, 1990. The defendant No. 6 would be liable with reference to all the amount under the sanction letters dated 1st June, 1990 and 22nd February, 1991 because she has acknowledged the full liability under the old and enhanced sanction. Liability of the defendants is further crystallized as under: Defendant Nos. 1, 2, 3 and 7 Rs. 6,46,69,779.92 + Rs. 50,000/- cost  Defendant No. 5 Rs. 5,54,92,000 + Rs. 50,000/- cost  Defendant No. 4 Rs. 91,77,779.92 + Rs. 50,000/- cost  Liability of all the defendants is joint and several and co-extensive but is restricted to the amount mentioned against their names. 33. One of the submissions of the learned Counsel for the respondent Nos. 2 to 6 is also that the suit/original application is liable to be dismissed for mis-joinder of causes, actions and parties. As I have already held that the sanction letter dated 22nd February, 1991 was not a new sanction and it is only a continuation by way of enhancement to the earlier sanction, therefore in the present case, I do not find any substance in the arguments that the original application/suit is liable to be dismissed for misjoinder of causes and actions and parties. The liabilities of each respondents i.e., respondent Nos. 2 to 6 has also been ascertained in my earlier paras of the judgment, therefore, his submission has to be rejected. The submission with regard to the interest is that the Bank has charged the excessive interest. The same can also not be accepted. The liability against the principal borrowed has already been ascertained and fixed. The principal borrower has not come forward to challenge the same i.e., the rate of interest. The liability of the guarantors being co-extensive with the liability of the borrower and principal borrower has accepted its liability by not challenging the judgment and issuance of recovery certificate, therefore, the submission as such is misconceived that the Bank has charged the interest at higher rate, cannot be accepted. 34. The liability of the guarantors being co-extensive with the liability of the borrower and principal borrower has accepted its liability by not challenging the judgment and issuance of recovery certificate, therefore, the submission as such is misconceived that the Bank has charged the interest at higher rate, cannot be accepted. 34. In view of the aforesaid, the appeal is allowed with pendents lite and future interest @ 16% per annum on yearly rests basis and the recovery certificate accordingly is directed to be amended with the cost as above, which will be included in the recovery certificate. 35. A copy of this judgment be supplied to the parties as well as to the D.R.T. concerned as per law. Record, if summoned earlier, be also sent back to the D.R.T. concerned. Appeal Allowed. _____________