Telangana High Court
Smt. Kandala Pulamma vs Chennu Vijaya Venkata Lakshmana Kumar on 18 July, 2025
*THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
+ APPEAL SUIT NO.305 OF 2020
% 18--07--2025
# Smt. Kandala Pulamma
... Appellant
vs.
$ Chennu Vijaya Venkata Lakshmana Kumar
... Respondent
!Counsel for the Appellant: Mr.J.Ashvini Kumar
^Counsel for Respondent: Mr.Vedula Srinivas learned Senior Counsel
appearing for Mr.Seeta Ramaiah Tenneti
<Gist :
>Head Note :
? Cases referred:
AIR 1965 SC 1591
2014 (1) SCC 105
2015 (16) SCC 787
AIR OnLine 2013 AP 133
AIR 2016 Hyderabad 24
Indian Kanoon - http://indiankanoon.org/doc/107888899/
______________________________
B.R.MADHUSUDHAN RAO,J
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BRMR, J
AS.No.305 of 2020
IN THE HIGH COURT FOR THE STATE OF TELANGANA
HYDERABAD
****
APPEAL SUIT NO.305 OF 2020
Between:
Smt. Kandala Pulamma
... Appellant
And
Chennu Vijaya Venkata Lakshmana Kumar
... Respondent
JUDGMENT PRONOUNCED ON: 18.07.2025
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
1. Whether Reporters of Local newspapers
may be allowed to see the Judgments? : No
2. Whether the copies of judgment may be
Marked to Law Reporters/Journals? : Yes
3. Whether His Lordship wishes to
see the fair copy of the Judgment? : Yes
_______________________________
B.R.MADHUSUDHAN RAO,J
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AS.No.305 of 2020
THE HON'BLE JUSTICE B.R.MADHUSUDHAN RAO
APPEAL SUIT NO.305 OF 2020
JUDGMENT:
1. This appeal is filed by the appellant aggrieved by the judgment
and decree passed by the learned II Additional District Judge,
Nalgonda, Suryapet in O.S.No.2 of 2014, dated 07.02.2020.
2. Appellant is the defendant and respondent is the plaintiff in the
suit. For the sake of convenience, the parties will be hereinafter
referred to as the plaintiff and the defendant.
3. The plaintiff has filed suit for recovery of amount of
Rs.18,67,000/- and for preliminary decree directing the defendant to
pay the suit amount by granting reasonable time for redemption of
mortgage plaint schedule property, in the event of failure to redeem
the mortgage property in accordance with preliminary decree, to pass
a final decree for sale of mortgaged immovable plaint schedule
property in terms of Order 34 of Code of Civil Procedure, 1908 for
realization of decreetal amount with subsequent interest at the rate of
24% per annum.
4. The contention of the plaintiff in the plaint is that the defendant
has borrowed an amount of Rs.15,00,000/- from him on 27.12.2012
for development of her business, executed a promissory note at
Vijayawada in his favour and on the same day agreed to repay the
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AS.No.305 of 2020
borrowed amount with interest at the rate of 24% per annum. The
plaintiff has insisted for security, the defendant has provided the suit
property i.e., two storied building constructed in an extent of 313
sq.yds bearing Door No.1-7-116/2/1 in Survey No.9, Ward No.9 of
Suryapet Municipality within the boundaries by depositing the title
deed dated 20.01.1996. The defendant has executed memorandum of
deposit of title deed on 31.12.2012 in favour of the plaintiff. In spite of
demands made by the plaintiff, defendant has failed to repay the
amount.
5. Defendant filed her written statement contending that she
neither borrowed any amount from the plaintiff nor created equitable
mortgage of the scheduled property. Son of the defendant by name
K.Ramakrishna Reddy is doing transport business at K.P.H.B. at
Hyderabad and he got acquaintance with one Narendar Chowdary.
The son of the defendant requested Narendar Chowdary to advance
loan for his business needs, as Narendar Chowdary had no money
with him he introduced one Ravikanth to her son. Son of the
defendant through Narendar Chowdary obtained loan of
Rs.6,00,000/- from Ravikanth, in turn he handed over two singed
blank cheques and original registered sale deed No.88/1996 relating
to the suit property. On 07.01.2013 the son of the defendant made
part payment of Rs.4,12,500/- along with interest to Ravikanth and
also paid remaining amount of Rs.2,00,000/- with interest on
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AS.No.305 of 2020
29.01.2013 to Ravikanth through Narendar Chowdary. In spite of
discharging the amount by her son, Ravikanth and Narendar
Chowdary did not return the singed blank cheques and original
registered sale deed which were kept with him as security and
postponed to return the same. In the month of September 2013, the
son of the defendant received phone call from Sheelam Govind Reddy
claiming an amount of Rs.15,00,000/- otherwise the matter will be
moved before the Court. The defendant never approached the plaintiff,
nor she visited Vijayawada at any point of time. The defendant has
sufficient agricultural properties, two buildings at Suryapet town and
getting rents. The son of the defendant got issued legal notice on
18.12.2013 to Ravikanth and Sheelam Govind Reddy demanding
them to return the cheques and original registered sale deed
belonging to the defendant, after receiving the said legal notice the
present suit came to be filed and prayed to dismiss the same.
6. The Trial Court basing on the pleadings of the parties has
framed the following issues:
1) Whether the defendant borrowed Rs.15,00,000/- from the plaintiff
on 27.12.2012 and executed demand Promissory note and created
equitable mortgage of title deeds by executing a Memorandum of
deposit of title deeds in favour of the plaintiff?
2) To what relief?
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AS.No.305 of 2020
7. Plaintiff got examined himself as PW1, also examined PW2 and
PW3 in support of his contention, got marked Exs.A1 to A3.
Defendant did not enter into the witness box.
8. The Trial Court after going through the evidence let by the
plaintiff and perusing the documents passed a preliminary decree
with costs directing the defendant to pay Rs.18,67,000/- with interest
at the rate of 24% per annum on Rs.15,00,000/- from the date of suit
till the date of preliminary decree with further interest at the rate of
6% per annum on Rs.15,00,000/- from the date of preliminary decree
till actual payment. The defendant is given three months time for
redemption. If the defendant failed to redeem the mortgage within the
time given by the Court, the plaintiff is at liberty to apply for final
decree. If the sale proceeds of mortgage property are not sufficient to
recover the decree amount the defendant is personally liable for
balance amount.
9.1 Learned counsel for the appellant submits that the appellant/
defendant had categorically denied the execution of the suit pro-note
and the memorandum of deposit of title deeds as they are forged and
fabricated documents. The learned Judge ought to have seen that the
evidence adduced by the plaintiff clinchingly establish that there was
no acquaintance between the appellant/defendant with that of
respondent/plaintiff and no loan transaction has taken place.
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AS.No.305 of 2020
9.2 The appellant/defendant has filed I.A.No.812 of 2013 under
Section 45 of the Indian Evidence Act, 1872 to send the promissory
note dated 27.12.2012 and the alleged memorandum of deposit of title
deed dated 31.12.2012 to the hand writing expert for the purpose of
comparison of signature, which was dismissed by the learned Judge
vide order dated 12.04.2019, aggrieved by the same
appellant/defendant has preferred the Civil Revision Petition before
the High Court vide CRP.No.3159 of 2019 and the said CRP is
pending, meanwhile the learned Judge has passed the judgment and
decree. The appellant/defendant was deprived of the opportunity to
send the disputed document for handwriting expert and the Court is
competent to compare the signatures of the defendant under Section
73 of the Indian Evidence Act, 1872.
9.3 The memorandum of deposit of title deeds is compulsory
registerable document under Section 17 of the Registration Act, 1908
but the learned Judge has erred and concluded that it is not required
to be registered under Section 17 of the Registration Act, 1908. The
suit filed by the respondent/plaintiff is not maintainable though the
memorandum of deposit of title deeds was impounded by paying
deficit stamp duty and it is not a curable defect, memorandum of
deposit of title deeds is invalid and not admissible document. To
substantiate his contentions, has relied on the following decisions:
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AS.No.305 of 2020
(i) United Bank of India Ltd Vs. Messrs Lekharam Sonaram and Co.
and others 1, (ii) State of Haryana and Ors Vs. Navir Singh and
Another 2, (iii) Yellapu Uma Maheswari & Anr Vs. Budda
Jagadheeswararao & Ors 3, (iv) Golla Dharmanna Vs. Sakari Poshetty
and Others 4, (v) Satti Venkateswara Reddy Vs. Mallidi Venkata
Reddy 5 and (vi) V.Madhusudhan Rao and 7 Others Vs. S.Nirmala Bai
and 4 Others. 6 Prayed to allow the appeal by set aside the judgment
and decree in O.S.No.2 of 2014, dated 07.02.2020, passed by the
learned II Additional District Judge, Nalgonda at Suryapet.
10. Lenard Senior Counsel for the respondent submits that the
Trial Court has appreciated the evidence adduced by the
respondent/plaintiff and the appellant/defendant has not entered
into the witness box to substantiate her contention, no interference is
called for and also relied on the decision cited by the learned counsel
for the appellant in State of Haryana, prayed to dismissed the same.
11. Heard learned counsel for the parties and perused the record.
12. Now the point for consideration is: whether the impugned order
suffers from any perversity or illegality and requires the interference
of this Court or not?
1 AIR 1965 SC 1591
2 2014 (1) SCC 105
3 2015 (16) SCC 787
4 AIR OnLine 2013 AP 133
5 AIR 2016 Hyderabad 24
6 Indian Kanoon – http://indiankanoon.org/doc/107888899/
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AS.No.305 of 2020
POINT:
13. The Trial Court observed in paragraph No.16 of its judgment
that “from 20.09.2019 to 18.10.2019 three adjournments were given
to the defendant (appellant herein) for adducing evidence and after
defense evidence was closed I.A.No.962/2018 was filed and the same
was dismissed on 12.11.2019 and the matter is posted for arguments
and later on the defendant filed another I.A.No.1023/2019 for
reopening the case and the same was dismissed and later when the
Court insisted the defendant to argue the case, on 30.12.2019 written
arguments were filed. Further earlier the defendant (appellant herein)
filed petition under Section 45 of the Indian Evidence Act to send the
document, but however the same was not pressed later by the
defendant. So, ultimately no defence evidence was adduced to prove
the case of the defendant that the signature on Exs.A1 and A3 do not
belong to the defendant (appellant herein)”.
14.1. Ex.A1 is the promissory note dated 27.12.2012. Ex.A2 is the
original registered title deed of the defendant dated 20.01.1996
pertaining to the mortgage property. Ex.A3 is the original
memorandum of deposit of title deed executed by the defendant dated
31.12.2012.
14.2. The english translation of Ex.A2 reads as under:
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AS.No.305 of 2020“On 27.12.2012 I have obtained a sum of Rs.15,00,000/- (Rupees fifteen
lakhs only) as loan from you and executed a promissory note. As a
security to the said loan amount I hereby deposit my original title deed
bearing Doc.NO.88/1996 regd, at SRO, Suryapet in respect of my
residential house bearing D.No.1-7-116/2/1 admeasuring 313 sq. yards
consisting two storied building with an intention to mortgage. This
Memorandum is executed to show that the original document is
deposited with you.”
15. Learned counsel for the appellant strongly contended that
Ex.A3 speaks that the executant intended to create a mortgage which
is a compulsory registerable document and is hit by Section 17 of the
Registration Act. Mere paying stamp duty penalty will not cure the
defect.
16.1 It is essential to bear in mind that the essence of a mortgage by
deposit of title deeds is the actual handing over by a borrower to the
lender of documents of title to immovable property with the intention
that those documents shall constitute a security which will enable the
creditor ultimately to recover the, money which he has lent. But if the
parties choose to reduce the contract to writing, this implication of
law 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 creation of the mortgage. It follows that in
such a case the document which constitutes the bargain regarding
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AS.No.305 of 2020securing require registration under S. 17 of the Indian Registration
Act, 1908 : United Bank of India Ltd.
16.2. It is well settled that the nomenclature given to the document is
not decisive factor but the nature and substance of the transaction
has to be determined with reference to the terms of the documents
and that the admissibility of a document is entirely dependent upon
the recitals contained in that document but not on the basis of the
pleadings set up by the party who seeks to introduce the document in
question: Yellapu Uma Maheswari & Anr .
16.3. Mere paying stamp duty and penalty does not make an
unregistered document admissible. An unregistered sale deed
effecting immovable property cannot be admitted in evidence as per
Section 49 of the Registration Act and it is compulsory registrable
under Section 17(1)(b) of Registration Act, 1908 : Golla Dharmanna.
16.4. If it is a simple document depositing title deed as a security, it
would not have required registration, but when authorised the lender
to take action for recovery of money on the basis of such deposit of
title deed coupled with Memorandum, it requires registration: Satti
Venkateswara Reddy.
16.5. A document which is not stamped as required under law cannot
be received in any evidence for any purpose, Section 35 of the Indian
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AS.No.305 of 2020Stamp Act, 1899 makes this very clear. However, this is a curable
defect and if the stamp duty and penalty is paid thereafter, the
document becomes admissible. The proviso to Section 35 of the
Indian Stamp Act, deals with this : V.Madhusudhan Rao.
17. At the time of marking the document i.e., memorandum of
deposit of title deeds through PW1, learned counsel for the
appellant/defendant before the trial Court raised an objection that it
was not registered and is liable for stamp duty. Respondent/plaintiff
has paid the deficit stamp duty with penalty under Sections 33 and
44 of the Stamp Act and thereafter Ex.A3 came to be marked through
PW1. The evidence of PW1 is the replica of the plaint averments and
he stated that the mortgage deed is not registered, the son of the
defendant has not signed as a witness. Prakash and Sathish are the
attesters to pro-note (Ex.A1). Though PW1 was cross-examined but no
incriminating material is elicited from his cross.
18. PW2 is the witness to Ex.A1, he deposed that the defendant
after receipt of money executed the promissory note in favour of the
plaintiff (respondent herein) and that the defendant (appellant herein)
has deposited her original title deed dated 20.01.1996 as a security
with an intension to create mortgage over the plaint schedule property
for the debt due. In his cross-examination he stated that he has no
objection to send the suit pro-note to the hand writing expert for
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AS.No.305 of 2020comparison for the hand writing. He denied the suggestion that he is
giving false evidence that the defendant did not execute Exs.A1 and
A3 and that the signatures do not belong to her.
19. PW3 is the another witness, who supported the evidence of PW2
in all aspects including deposit of original title deeds of the defendant
(appellant herein). Though PW3 was cross examined by the
defendant’s counsel, nothing material could be elicited.
20. The primary arguments of the appellant’s counsel is on Ex.A3
(memorandum of deposit of title deeds) that the document speaks the
intent to create a mortgage by the appellant (defendant) in favour of
respondent (plaintiff) and is hit by the Registration Act.
21. The Supreme Court in State of Haryana and Ors observed at
paragraph No.11, which reads as under:
“11. A mortgage inter alia means transfer of interest in the specific
immovable property for the purpose of securing the money advanced by
way of loan. Section 17(1)(c) of the Registration Act 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 or interest, requires
compulsory registration. A mortgage by deposit of title deeds in terms of
Section 58(f) of the Transfer of Property Act surely acknowledges the
receipt and transfer of interest and, therefore, one may contend that its
registration is compulsory. However, 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 instrument. In
the face of it, in our opinion, when the debtor deposits with the creditor
title deeds of the property for the purpose of security, it becomes a
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mortgage in terms of Section 58(f) of the Transfer of Property Act and no
registered instrument is required under Section 59 thereof as in other
classes of mortgage. The essence of a mortgage by deposit of title deeds
is the handing over, by a borrower to the creditor, the 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 deeds the creditor and borrower may record the
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 under Section 17(1)(c) of the
Registration Act, but in a case in which such a document does not
incorporate any term and condition, it is merely evidential and does not
require registration.”
22. The aforesaid decision cited by the appellant’s counsel in fact
assist the case of the respondent (plaintiff).
23. On close scrutiny of Ex.A3, I am of the firm view that the
essence of mortgage by deposit of title deeds is the handing over by a
borrower to the creditor, title deeds of immovable property with the
intension that the documents shall constitute security enabling the
creditor to recover the money lent.
24. The Trial Court observed at paragraph No.15 that “as can be
seen from Ex.A3, in the same it is mentioned that the defendant
borrowed Rs.15 Lakhs from the plaintiff and as a security for the
same she deposited registered sale deed but there are no other terms
in the same permitting the plaintiff to take action if the defendant
failed to repay the borrowed amount. So, as per the decision reported
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by the counsel for the defendant, as in the present case memorandum
of understanding did not contain any term attracting the provisions of
Section 17 of Registration Act, this Court is of the opinion that there
is no need for registration of Ex. A3 as claimed by the counsel for the
defendant.”
25. I agree with the observations made by the Trial Court, in
furtherance of the same, the decision of the Supreme Court in the
case of State of Haryana is aptly applicable to the case on hand and
hold that Ex.A3 does not incorporate any terms and conditions and
the essence of Ex.A3 goes to show that it is by deposit of title deeds in
handing over the document by a borrower to the creditor which
constitute a security enabling the debtor to recover the money lent.
The contention of the appellant’s counsel that Ex.A3 is compulsory
registerable document is negatived. The decision cited by learned
counsel for the appellant stated supra at paragraph Nos.16.1 to 16.5
do not assist his case in view of the fact that the case facts referred
above do not match with the case facts on hand.
26. Respondent/plaintiff could able to prove that the appellant/
defendant has borrowed the amount and executed Ex.A1/pro-note
and deposited her registered title deeds under Ex.A3 which is
supported with the evidence of PW1 to PW3 in all aspects.
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27. Defendant did not enter into the witness box to prove her
contention that she did not execute pro-note nor deposited her title
deeds with the respondent/plaintiff.
28. I am of the firm view that the Trial Court has properly
appreciated the evidence on record and rightly decreed the suit of the
respondent/ plaintiff. There is no illegality or perversity in the
judgment passed by the Trial Court and I am not inclined to interfere
with the same. Hence, the point is answered accordingly.
29. A.S.No.305 of 2020 is dismissed.
Interim orders if any stands vacated and miscellaneous
application/applications pending, if any, shall stand closed. There
shall be no order as to costs.
________________________________
B.R.MADHUSUDHAN RAO, J
18.07.2025
Dua