M/s. Royal Printing Works and others vs Oriental Bank of Commerce

Amareswari, J.—The short question is when an order is passed directing the party to furnish immovable property security to the satsfaction of the Court below whether the security can be offered by way of deposit of title deeds which necessarily obviates the registration involving considerable expenditure.

This Court passed an order in C.M.A. No. 335 of 1985 on 14-4-1986 directing the petitioner to furnish immovable property security for a sum of Rs. 50,000/- to the satisfaction of Additional Chief Judge-cum-Second Additional Special Judge for S.P.E. and A.C.B. Cases, City Civil Court, Hyderabad. The petitioner furnished third party immovable property security. He offered to deposit the title deeds and create an equitable mortgage. But the learned Judge declined to accept the bond observing that since immovable property security is involved it is compulsorily registerable under S. 17(1)(b) of the Registration Act. The learned Judge further observed that the petitioner can seek a clarification from the High Court with regard to the type of security that is to be furnished.

In Purra Pentaiah Vs. Madam Pandya, Jeevan Reddy, J. held that immovable property furnished in pursuance of the order of this Court should be registered compulsorily. The learned Judge followed the decision of the Madras High Court in Nagaruru Sambayya v. Tangatur Subbayya, ILR (1908) Mad 330.

In Subrahmanyam v. Ramanamma, (1980) 2 A LT 395, P. Ramachandra Raju, J. while agreeing with the view of Jeevan Reddy, J. observed that while passing such an order, this Court could give option to the party to furnish the security by way of deposit of title deeds to avoid expenses for stamp and registration.

Another matter came up before Lakshminarayana Reddy, J. It was argued before the learned Judge that there is a conflict of judicial opinion and the matter should be decided by a Division Bench. Then the matter was posted before a Division Bench consisting of Rarnanujulu Naidu and Anjaneyulu, JJ. The learned Judges observed that there is no conflict of judicial opinion and directed the matter to be posted before the learned single Judge, who referred it to the Bench. Thereafter, the matter came up before our learned Brother Lakshminarayana Reddy, J. The learned Judge agreed with the view taken by Jeevan Reddy, J. that in the case of immovable property security, registration is necessary.

The short point for consideration is whether in every case where this Court directs third party immovable property security to be given such a security is compulsorily registra-ble under S. 17 of the Registration Act. There is no gainsaying the fact that security of immovable property is given, it has to be registered. But where a security is given by creating an equitable mortagage i.e., by deposit of title deeds, there is no necessity for any registration. When such an order is passed, the lower Court should give an option to the party to furnish third party security in the usual manner in which case it has to be registered or to furnish security by. deposit of title deeds unless othrwise specified by this Court while giving the direction. If the party offers to give security by deposit of title deeds in the absence of any specific direction in that regard, it is left to the discretion of the Court whether to accept such a security or not. Such discretion is implicit in the words "to the satisfaction of the Court below". Where a security is furnished by deposit of title deeds, no registration is necessary as held by Ram-chandra Raju, J. in C.R.P. No. 3274 of 1980 reported in Subrahmanyam v. Rammn-amma, (1980) 2 ALT 395.

The Transfer of Property Act provides for such security to be executed not only by registering the document, but also by having an equally effective security by creating a mortgage by deposit of title deeds and such a course would relieve the party of the expense involved for stamp and registration which is considerably high in the present times.

In the present case, it is represented that the cost of registration would come to about Rs. 16,000/-. We therefore think that this is a fit case where the party should be permitted to give third party immovable property security by deposit of title deeds. The petitioner had already deposited the title deeds. The lower Court shall accept the same if it is satisfied that the security is adequate.

The Civil Revision Petition is accordingly disposed of. No costs. The suit shall however be expedited and disposed of preferably within a period of six months.

Order accordingly.