JUDGMENT 1. The Appeal, under Sec. 96 of the Code of Civil Procedure [for short 'the C.P.C.'], is filed by the Appellant/Plaintiff challenging the Decree and Judgment, dtd. 31/3/2003, in O.S. No. 30 of 2000 passed by the learned Senior Civil Judge, Kandukur [for short 'the trial Court']. The Respondents herein are the Defendants in the said Suit. 2. The Appellant/Plaintiff filed the Suit praying for passing of preliminary decree directing the Defendants to deposit the suit amount of Rs.2, 51, 663.00 with future interest. 3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court. 4. The brief averments of the plaint, in O.S. No.30 of 2000, are as under: (i) The Plaintiff is the State Bank of India, constituted under the Central Act 23/1955, dtd. 8/5/1955, having its registered Branch Office at Kandukur Town of Prakasam District. The 1st Defendant is proprietorship Company, which is represented by 2nd Defendant - Proprietor. (ii) The 2nd Defendant approached the Appellant Bank for financial aid to run the iron safes and iron furniture business under the scheme of Small Business Finance under the name and style of 1st Defendant Company at Kandukur. Accordingly, the Appellant Bank sanctioned a sum of Rs.2, 00, 000.00, which was agreed to be paid on demand with interest @ 14% per annum with quarterly rests. (iii) The 2nd Defendant deposited title deed bearing registration No. 3010 of 1995, dtd. 27/11/1995, on 1/8/1996 and also sent a confirmation letter on 2/8/1996 in favour of the Plaintiff Bank by creating an equitable mortgage on the property contained in the registered sale deed as collateral security and also executed a demand promissory note for the said amount of Rs.2, 00, 000.00 on 1/8/1996 in favor of the Appellant Bank. (iv) The Schedule Property is a self-acquired property of the 2nd Defendant having a terraced building at 14 Ankanas. (v) As the 2nd Defendant failed to pay the amount, even- after repeated demands, but on considering the written representation, dtd. 16/5/2000, submitted by the 2nd Defendant requesting the Appellant Bank to facilitate him to pay a sum of Rs.5, 000.00 per month commencing from July, 2000, still the 2nd Defendant did not adhere the promise and failed to pay any amount. 16/5/2000, submitted by the 2nd Defendant requesting the Appellant Bank to facilitate him to pay a sum of Rs.5, 000.00 per month commencing from July, 2000, still the 2nd Defendant did not adhere the promise and failed to pay any amount. Accordingly, on 20/5/2000, the Appellant Bank issued a notice to the Defendants demanding them to pay the amount by May 2000, but the Defendants failed to respond to the notice. Hence, the present Suit is filed. 5. The brief averments of the written statement, filed by the Defendants, are as under: (i) The Defendants while admitting applying for loan with the Appellant Bank and availing the loan of Rs.1, 70, 000.00 submitted that the remaining balance amount of Rs.30, 000.00, out of the loan amount, has not been utilized and it is with the bank. However, the Defendants denied granting of loan on the condition of creating equitable mortgage by deposit of title deeds. The Defendants also denied that the stocks were pledged. (ii) The 2nd Defendant contended that he is an illiterate person but learnt to sign. The authorities of the Appellant Bank took his signatures on unfilled blank bank documents, which were utilized by them for filing the Suit. The Defendants further contended that they did not agree to repay the loan with quarterly rests. The Defendants contended that, the alleged equitable mortgage deed and the pledge requires registration, otherwise, the same is not valid and binding. Since, the Suit is barred by limitation, the same may be dismissed with costs. 6. Based on the above pleadings, the trial Court framed the following issues: (i) Whether the defendants have not availed the entire amount? (ii) Whether the creation of equitable mortgage is not true? (iii) To what relief? 7. During the course of trial in the trial Court, on behalf of plaintiff, PW1 was examined and Ex.A1 to Ex.A10 were marked. On behalf of defendants, DW1 was examined and no document was marked. 8. After completion of the trial and hearing the arguments of both sides, the trial Court dismissed the Suit vide its Judgment, dtd. 31/3/2003, against which the present appeal is preferred by the Plaintiff in the Suit questioning the Decree and Judgment passed by the trial Court. 9. Heard Sri. Kota Venkata Rama Rao, learned Counsel for the Appellant/Plaintiff and heard Sri. A. Lalit, Advocate, on behalf of Sri. 31/3/2003, against which the present appeal is preferred by the Plaintiff in the Suit questioning the Decree and Judgment passed by the trial Court. 9. Heard Sri. Kota Venkata Rama Rao, learned Counsel for the Appellant/Plaintiff and heard Sri. A. Lalit, Advocate, on behalf of Sri. Turaga Sai Surya, learned Counsel for the Respondents/Defendants. 10. Sri. Kota Venkata Rama Rao, learned Counsel for the Appellant/Plaintiff would contend that, Ex.A3 ingredients clearly goes to show that the same was executed in respect of the past transaction and it does not require registration. The learned Counsel would further contend that the decision of Thota Venkata Narasamma Vs. S.V.M. Srinivasan, (1996) 3 ALD 887 . which was relied upon by the trial Court is not at all applicable to the facts of the present case on hand. He would further contend that the Suit has to be decreed. 11. Per contra, the learned Counsel for the Respondents/Defendants would contend that the trial Court on considering the entire material on record has rightly dismissed the Suit and there are no merits in the present appeal. 12. Having regard to the pleadings in the Suit and the finding recorded by the trial Court and in the light of rival contentions and submissions made on either side before this court, the following points would arise for determination: (i) Whether the Ex.A3 - memorandum of deposit of title deed is compulsorily registrable document, or not? (ii) Whether the Plaintiff Bank is entitled to Suit claim as prayed in the plaint and whether the Decree and Judgment of the trial Court needs any interference? 13. Point Nos. (i) and (ii): The case of the Appellant/Plaintiff Bank is that the 2nd Defendant, who is the Proprietor of the 1st Defendant, approached the Plaintiff Bank for obtaining a loan of Rs.2, 00, 000.00 for running a small-scale industry. 13. Point Nos. (i) and (ii): The case of the Appellant/Plaintiff Bank is that the 2nd Defendant, who is the Proprietor of the 1st Defendant, approached the Plaintiff Bank for obtaining a loan of Rs.2, 00, 000.00 for running a small-scale industry. Accordingly, the Plaintiff Bank sanctioned loan of Rs.2, 00, 000.00 on 1/8/1996 and on the same day the 2nd Defendant deposited his title deeds and so also executed Ex.A1 - letter of terms and conditions, Ex.A2 - registered title deeds of the 2nd Defendant and also Ex.A4 - demand promissory note executed by the 2nd Defendant for Rs.2, 00, 000.00 and Ex.A5 - demand promissory note delivery letter and also Ex.A6 - an agreement of hypothecation in favour of the Plaintiff Bank and availed the said loan and on 2/8/1996 the 2nd Defendant sent a letter evidencing deposit of title deeds [Ex.A2] on 1/8/1996 and after availing loan, the 2nd Defendant, who is the Proprietor of the 1st Defendant, failed to discharge the loan amount to the Plaintiff Bank. 14. As seen from the judgment of the trial Court, the trial Court came to a conclusion that Ex.A3 - memorandum of deposit of title deeds is a compulsorily registrable document and since Ex.A3 is not a registered document, therefore, the Suit is liable to be dismissed. 15. The paramount question that falls for adjudication, in this appeal, is whether the Ex.A3 is compulsorily registrable document? 16. As seen from the recitals of Ex.A3 - inland letter, it is clear that the same was sent to the Plaintiff Bank through registered post on 2/8/1996. The recitals in the said Ex.A3 is hereunder: "Dear Sir, I am writing this to confirm that I have deposited with you on 1/8/1996 title deeds relating to my property at Kandakur described below. [hereinafter referred to as the 'said property'] with the intention of creating an equitable mortgage on the said property by way of collateral security for amounts due to the Bank from me/the concern of M/s.Sardar Iron Safe Company under the credit facility of Rs.2, 00, 000.00 availed by me". 17. Ex.A3 is the inland letter addressed to the Chief Manager of State Bank of India through registered post. Ex.A3 goes to show that it was posted in a post office through registered post; postal stamp is also visible. 17. Ex.A3 is the inland letter addressed to the Chief Manager of State Bank of India through registered post. Ex.A3 goes to show that it was posted in a post office through registered post; postal stamp is also visible. Ex.A3 goes to show that the debtor deposited title deed of his property one day prior to the date of Ex.A3 with the creditor with an intent to create a 'security'. The law implies that, it is only a contract between the parties to create a mortgage and, therefore, it does not require registration. 18. The law is well settled by Apex Court [4 Judges Bench] in a case of United Bank of India Limited Appellant Vs. Messrs Lekharam Sonaram and Co. and others Respondents, AIR 1965 Supreme Court 1591. 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." 19. In the aforesaid decision, the Apex Court [4 Judges Bench] held in paragraph No. 8 as under: "Applying the principle to the present case, we consider that the letter at exhibit 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 exhibit 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-exhibit 7(a) - did not require registration under Sec. 17 of the Indian Registration Act." 20. The ratio laid down in the above judgment of Apex Court squarely applies to the present facts of the case. It follows, therefore, that the document-exhibit 7(a) - did not require registration under Sec. 17 of the Indian Registration Act." 20. The ratio laid down in the above judgment of Apex Court squarely applies to the present facts of the case. In the instant case also Ex.A3 goes to show that the title deed was deposited by the debtor one day prior to Ex.A3 with the bank and Ex.A3 does not contain what was the principal amount borrowed or to be borrowed nor it referred to rate-of-interest for loan. Ex.A3 letter was sent to record transaction, which has already been concluded and under which rights and liabilities had already been created, therefore, it did not require registration. 21. A Division Bench of this Court in a case of Durga Emporium, Vijayawada and Others Vs. Munaga Brothers, rep. by Munaga Subbarao, Cuddapah and another, 2002 (5) ALT 650 (D.B.). held that "letter written by mortgager to mortgagee does not by itself create any mortgage except evidencing the factum of deposit of title deed already taken place with a creditor, as such it does not require registration." 22. As stated supra, in the instant case also Ex.A3, dtd. 2/8/1996, goes to show that the title deed relating to property, as a debtor, was deposited on 1/8/1996 itself; Ex.A3 is only a letter evidencing factum of deposit of document, which has already taken place. Therefore, the ratio laid down in the aforesaid decisions are squarely applicable to the present case on hand. Thus, the trial Court erroneously came to a conclusion by applying the decision of a Single Judge of this Court in Thota Venkata Narasamma [cited 1st supra] that "Ex.A3 is not a valid document, which require registration." 23. As stated supra, the ratio laid down by the Apex Court [4 Judges Bench] in United Bank of India Limited [cited 2nd supra] and in the Durga Emporium [cited 3rd supra] would squarely applicable to the present facts of the case. Therefore, the said finding of the trial Court is contrary to law and it is liable to be set-aside. 24. In order to prove the case of the Plaintiff, the Plaintiff Bank relied on the evidence of its Manager, who was examined as PW1. Therefore, the said finding of the trial Court is contrary to law and it is liable to be set-aside. 24. In order to prove the case of the Plaintiff, the Plaintiff Bank relied on the evidence of its Manager, who was examined as PW1. As per the evidence of PW1, the 2nd Defendant, who is the Proprietor of the 1st Defendant, approached the Plaintiff Bank for running business of iron safe and furniture and also availed loan on 1/8/1996 by executing Ex.A1, Ex.A2, Ex.A4 to Ex.A6. His evidence further goes to show that the 2nd Defendant deposited title deed on the same day itself and he sent a letter under Ex.A3 by evidencing the fact of deposit of title deeds deposited on 1/8/1996. The evidence of PW1 further goes to show that the 2nd Defendant executed a revival letter under Ex.A7 and subsequently failed to discharge his liability to the Plaintiff Bank. The evidence of PW1 coupled with Ex.A9 [notice] clearly goes to show that after issuance of demand notice by the Plaintiff Bank, the Defendants failed to discharge their debt. Ex.A10 - account copy furnished by the Plaintiff Bank clearly goes to show that the liability of the Defendants to discharge the debt to the Plaintiff Bank. Though the PW1 was cross- examined by the Defendants Counsel, nothing was elicited from PW1 to discredit his testimony in the evidence of his cross-examination. In cross-examination, the evidence of PW1 is not disturbed on the material aspects of the case. 25. The 2nd Defendant examined himself as DW1 by way of defense. As per his evidence also, he applied loan of Rs.2, 00, 000.00 with the Plaintiff Bank and the same was sanctioned by the Plaintiff Bank. He also admitted about the execution of promissory note and also documents on the same day and he also admitted the execution of Ex.A3 and Ex.A4, and the borrowing of amount from the Plaintiff Bank by the Defendants is not at all disputed by the Defendants. 26. The learned Counsel for the Respondents/Defendants would submit that, though the Defendants availed a loan of Rs.2, 00, 000.00, the 2nd Defendant has withdrawn Rs.1, 70, 000.00 only from the Plaintiff Bank. The 1st Defendant is a small-scale industry and the 2nd Defendant is the Proprietor of the 1st Defendant Company. 26. The learned Counsel for the Respondents/Defendants would submit that, though the Defendants availed a loan of Rs.2, 00, 000.00, the 2nd Defendant has withdrawn Rs.1, 70, 000.00 only from the Plaintiff Bank. The 1st Defendant is a small-scale industry and the 2nd Defendant is the Proprietor of the 1st Defendant Company. As per the sole testimony of the 2nd Defendant, they availed a loan of Rs.2, 00, 000.00 from the Plaintiff Bank. The availing of loan of Rs.2, 00, 000.00 is not at all disputed by the Defendants. Furthermore, Ex.A8 - notice was sent to the Plaintiff Bank by the Defendants with a request to grant installments @ Rs.5, 000.00 per month, since he is suffering from financial crisis in his business. DW1 admitted in Ex.A8 - notice about the availing loan of Rs.2, 00, 000.00 from the Plaintiff Bank. Though DW1 was cross-examined, Ex.A8 is not at all denied by the Defendants. In Ex.A8, there was a clear recital by the 2nd Defendant about creating equitable mortgage of his house property. He further admits in Ex.A8 that the 2nd Defendant by creating equitable mortgage of his house property availed loan of Rs.2, 00, 000.00 for his business purpose and he is presently suffering losses in his business. 27. The learned Counsel for the Respondents/Defendants would submit that the Defendants availed only Rs.1, 70, 000.00 and Rs.30, 000.00 was not withdrawn from out of his loan account. As stated supra, in Ex.A8 - the 2nd Defendant himself admitted about the availing of loan of Rs.2, 00, 000.00. Moreover, Ex.A10 - account copy of the Plaintiff Bank shows about the liability of the Defendants. Ex.A10 is not at all disputed by the Defendants in cross-examination of PW1. No suggestion was given to PW1 - the Manager of the Plaintiff Bank by the Defendants Counsel that the entries in Ex.A10 are not at all correct. Ex.A1, Ex.A4 and Ex.A5 goes to show that on 1/8/1996 the Defendants availed a loan of Rs.2, 00, 000.00 from the Plaintiff Bank. Ex.A7 goes to show that a revival letter was executed by the Defendants and the Suit is filed in the year 2000 itself. Therefore, the Suit is filed within a period of limitation. Moreover, the signatures on Ex.A1 and Ex.A3 are not at all disputed by the Defendants. Ex.A7 goes to show that a revival letter was executed by the Defendants and the Suit is filed in the year 2000 itself. Therefore, the Suit is filed within a period of limitation. Moreover, the signatures on Ex.A1 and Ex.A3 are not at all disputed by the Defendants. The bald allegation made by the Defendants is that the signatures of the 2nd Defendant is obtained by the Plaintiff Bank on the same day, but in order to prove the same, no defense evidence is adduced by the Defendants except sole testimony of the 2nd Defendant as 'DW1'. 28. Having regard to the facts and circumstances and for the foregoing reasons, the Plaintiff Bank proved the Suit claim and, therefore, the Judgment and Decree passed by the trial Court is liable to be set-aside. 29. In the result, the Appeal is allowed, the Decree and Judgment passed by the Senior Civil Judge, Kandukur, in O.S. No. 30 of 2000 is liable to be set-aside. Resultantly, O.S. No. 30 of 2000 on the file of Senior Civil Judge, Kandukur, is preliminary decreed with costs for an amount of Rs.2, 51, 663.00 with subsequent interest @ 12% per annum on Rs.2, 00, 000.00 from the date of Suit till the date of Decree, thereafter @ 6% per annum on Rs.2, 00, 000.00 till the date of realization. The time for redemption is three [03] months. Both parties shall bear their own costs in the appeal. 30. As a sequel, miscellaneous petitions, if any, pending in the Appeal shall stand closed.