T. Chandrasekhara Menon, J.
1. The appellant is the plaintiff in O.S. No. 56/72 on the file of the Munsiff Court, Payyannur. The suit was for recovery of a sum of Rs. 4,215 alleged to be the balance principal and interest due on a promissory note.
2. Appellant-plaintiff is a company registered under the Indian Companies Act. The 1st respondent joined a kuri conducted by the plaintiff-company at Payyannur branch. On the 6th instalment, the 1st defendant bid the kuri and received the price amount on August 13, 1969. At that time as security for future subscriptions to the kuri, the defendants executed a surety and security proposal Form on June 30, 1969 as per Ext. A-1. On August 13, 1969 a pronote, Ex. A-2, for Rs. 4,400 was executed as security for the future instalments due from the 1st defendant to the company. The 2nd defendant stood as surety. According to the plaintiff after the execution of the promissory note the 1st defendant had made payments of Rs. 750 which is inclusive of the dividends up to February 8, 1972. The amount due from 14th instalment is kept due. A notice was issued demanding the defendants to pay the entire balance amount as per Ext. A-7 on September 20, 1971. In the plaint, it had been stated that title deeds deposited in the Cannanore branch by the 2nd defendant over properties allotted to her share in partition amounts to a mortgage by deposit of title deeds. The plaintiff sought realisation of the amount concerned personally from the defendants and also by sale of the property mortgaged.
3. In the joint written statement filed by the defendants, it is admitted that the 1st defendant joined the kuri and bid the same. But the payment of consideration of Rs. 4,400 under Ext. A-2 had been denied. According to them, there was no payment on the date of Ext. A-2, and only Rs. 3,735 had been paid to the 1st defendant by cheque on a bank in Cannanore and the Payyannur court before which the suit was filed had no jurisdiction to entertain the matter. It is stated that the 2nd defendant was an unnecessary party to the suit and only the 1st defendant who received the consideration was liable. It is also asserted therein that some amounts that had been paid had not been credited in the plaint. According to them, the total amount discharged by the 1st defendant was Rs. 1,440. It is also contended that the 1st defendant was entitled to a dividend which comes to Rs. 1,265. A contention has also been taken that the legal requirements for the creation of a mortgage by deposit of title deeds have not been complied with in the case and the suit on the basis of the mortgage is not maintainable.
4. The trial court decided that Ext. A-2 is supported by consideration and the partial discharge pleaded by the defendants is not true. It was also held that the 2nd defendant is a necessary party to the suit and liable under Ext. A-2. According to that court no valid mortgage by deposit of title deeds had been created and a decree for the sale cannot be granted. Learned munsiff also held on the basis of a decision of a Division Bench of this court in Raghavan v. Subbarama Sastrigal  KLT 231 ; AIR 1972 Ker 21, that the provision for collecting the entire future instalments in a lump even before the termination of the kuri and 12% interest from a defaulting prized subscriber is unconscionable and unenforceable in law. The court came to the conclusion that the defendants are entitled to get dividend and granted a decree for an amount of Rs. 3,700 less dividend with interest from February 27, 1970, from the defendants. The plaintiff was directed to file a statement showing the correct dividend within 10 days from the date of judgment with interest at 6% from the date of the 14th instalment. Parties were to bear their costs.
5. The matter was taken up to the District Court, Tellicherry by the plaintiff in appeal. The respondents filed a memorandum of cross-objections claiming credit for Rs. 2,101 and also for adjustment of dividends coming to Rs. 871.18. They also claimed costs. The finding of the trial court was to some extent modified by the appellate court. The decision of the trial court that the plaintiff is not entitled to a decree for sale and entitled only for a personal decree on the basis of Ext. A-2 was confirmed. The decision of the trial court that the defendants are entitled for dividend was also confirmed. But on the basis that the amount of dividend is undetermined, the case was remanded to the trial court for re-fixing the dividend to be adjusted after affording further opportunity to both parties. The trial court was also asked to determine the question of discharge taking into consideration Exts. B-1 to B-4 which are receipts issued by the plaintiff-company. The court also held that the parties are entitled to pay and receive proportionate costs in both the courts. It is in these circumstances that the plaintiff has approached this court in this S.A.
6. As regards the question of the plaintiff's entitlement to refuse dividend to the defendants and claim interest at 12%, I think the matter is concluded by a Full Bench decision of this court in Achuthan v. State Bank of Travancore  KLT 806 ; AIR 1975 Ker 47, 53 [FB]: There, after a detailed consideration of the law on the matter, Justice Eradi, speaking for the court, has held :
'... ...the relationship between the foreman and the subscribers in a chitfund transaction is of such a nature that there is special necessity and justification for making stringent provisions for the protection of the interests of the foreman. Viewed against such background, the provision for interest at 12% cannot be regarded as unconscionable.'
7. His Lordship pointed out thus (p. 53) :
' If a prized subscriber defaults in prompt payment of his subscriptions the foreman will be obliged to find an equivalent amount from other sources for the purpose of meeting his obligations for payment of the kuri amount to the other members who prize the kuri at the subsequent auctions or draws. For raising such amount the foreman may have to pay high rates of interest and this is a relevant aspect to be taken into account in deciding about the reasonableness of the stipulation that the defaulting subscriber shall be liable to pay interest at 12%.'
8. The court was of the view that there is no legal principle on the basis of which it could be held that such a stipulation is penal and unenforceable.
9. In regard to the question whether concessional facility given to a prized subscriber of effecting repayment in instalments could be subject to a stipulation that the said concession is liable to be withdrawn in the event of default being committed in payment of any of the instalments, the court pointed out (p. 51) :
'......what actually transpires when a prized subscriber is allowed todraw the kuri amount is the grant of a loan to him from the common fund in the hands of the foreman with the concessional facility of effecting the repayment in instalments subject to a stipulation that the said concession is liable to be withdrawn in the event of default being committed in payment of any of the instalments. Thus, it is really a debt in praesenti but permitted to be paid by instalments, the benefit of the said facility being available to the debtor only so long as the instalments are regularly paid. Such being the true nature of the transaction it is evident that......the stipulation contained in the kuri security bond entitling the foreman to recover from the prized subscriber the whole of the balance amount due from him in a lump sum on his committing default in payment of any of the instalments cannot be regarded as a penalty clause.'
10. The court pointed out that in the case of a stake-holder (foreman) of a chit his relation to the subscriber is of such a special nature that special necessity exists justifying stringent provisions being incorporated in the agreement for the protection of his interest. Any question as to the unconscionableness of a stipulation contained in an agreement would properly arise for consideration only if it is shown that the relationship between the contracting parties was such that one of them was in a position to dominate the will of the other and that he had made use of such position to obtain an unfair advantage over the other. Persons join as subscribers in a chit fund of their own free will. After having knowingly and voluntarily agreed to abide by the rules and conditions of the kuri they cannot be heard to contend that they should be relieved of their obligations under the chit fund transaction on the ground of alleged unconscionableness of the bargain. In this view, the decision in Raghavan v. Subbarama Sastrigal,  KLT 231 ; AIR 1972 Ker 21, was distinguished and explained by the Full Bench. It would be proper to quote the relevant portion from the judgment here (p. 53):
' It appears to us on a close reading of the judgment of the Division Bench in Raghavan v. Subbarama Sastrigal  KLT 231 ; AIR 1972 Ker 21, that the observations found therein that the provisions of the kuri vari empowering the stake-holder to collect from the defaulting prized subscriber the entire future instalments in lump with 12% interest amounted to unconscionable stipulations in the nature of a penalty were made by the learned judges only in the context of the peculiar facts and special circumstances of that case. We do not think that the Division Bench intended to lay it down as a principle of general application that such stipulations occurring in kuri varis or chitty security bonds have to be regarded as penal in nature. The correct legal position governing the matter has already been explained by us in detail in the preceding paragraphs. We need only say, with respect, that to the extent to which any of the observations in Raghavan v. Subbarama Sastrigal  KLT 231 ; AIR 1972 Ker 21, are inconsistent with the principles enunciated in this judgment, those observations cannot be regarded as laying down correct law. '
11. In this view, the findings entered by the courts below that the plaintiff is liable ito credit the dividends as far as the defendants are concerned in the liability due from them and that the company cannot claim 12% interest, cannot be sustained. The defendants would be bound by the contract between the defendants and the plaintiff in the matter which is embodied in exhibit B-7. By virtue of Rules 8 and 11 of the said document defaulting prized subscriber is liable to pay the entire future instalments in a lump before the termination of the kuri with 12% interest and he is denied his share of dividend. The decision of the courts below with regard to this aspect will, therefore, have to be vacated.
12. The next question that arises for consideration is whether a mortgage by deposit of title deeds is validly created in the case. On June 30, 1969, a surety and' security proposal form was made by the 1st respondent as evidenced by exhibit A-1. The pronote, exhibit A-2, was executed by both the respondents on August 13, 1969, for Rs. 4,400. On the same day as exhibit A-2, a letter was written by the 2nd respondent to the appellant regarding deposit of title deeds. Exhibit A-5 is this letter, wherein it is stated : ' I hereby give you the list of title deeds relating to my property at Koromeamsom which has already been deposited with you as a security for the due payment of the sum of Rs. 4,400 due by me in respect of Sri R. Sankar.' And this is followed by a list of the documents consisting of a registered partition deed of 8th May, 1962, marked as exhibit A-6 and an encumbrance certificate evidenced by exhibit A-9. The learned district judge has quoted the following passage from Mulla's Transfer of Property Act, 1966 Edn., at pages 399 and 400:
'Registration.--A mortgage by deposit of title deeds does not require any writing and being an oral transaction is not affected by the law of registration. But it is usual for the deposit to be accompanied by a memorandum in writing. If this writing is the contract of mortgage so that it creates the mortgage it must be registered--and oral evidence to contradict it is not admissible. But registration is not necessary if the mortgage is complete without the writing and the writing is merely a statement that the mortgage has been effected, or a statement of facts from which the contract of mortgage can be inferred. In Obla Sundarachariar v. Narayana Ayyar, AIR 1931 PC 36, the memorandum was merely a list of the deeds deposited and it did not need registration although it was deposited before the money was advanced. Their Lordships of the Judicial Committee said--' No such memorandum can be within the section unless on its face it embodies such terms and is signed and delivered at such time and place and in such circumstances as to lead legitimately to the conclusion that so far as the deposit is concerned, it constitutes the agreement between the parties.' The necessity for registration therefore depends upon the construction of the memorandum in the light of the surrounding circumstances and if it is loosely worded the distinction is very fine. A good illustration is the leading case of Kedarnath Dutt v. Shamloll Khettry  11 Beng LR 405, 406; 20 WR 150 (Cal). Shankerlal had advanced Rs. 1,200 to the borrower who deposited the title deeds and executed the promissory note for the amount. On the promissory note he made the following endorsement : ' For the repayment of the loan of Rs. 1,200 and the interest due thereon of the within note of hand, I hereby deposit with Shamloll Khettry, as a collateral security by way of equitable mortgage title deeds of my property.' Sir Richard Couch in giving judgment pointed out that if there had been no endorsement at all on the promissory note there would have been a complete equitable mortgage and that the endorsement was merely a recital of the fact of the deposit from which the contract of mortgage is inferred so that though the writing was not registered there was a valid equitable mortgage. This case may be contrasted with Bhairab Chandra Bose v. Anath Nath De  24 Cal WN 599 ; 57 IC 686 (Cal). The defendant had mortgaged his house to the plaintiff and had delivered his title deeds to him for the purpose of that mortgage. He then took a fresh advance of Rs. 1,500, executed a promissory note for that amount and on the same date sent the plaintiff a letter in these terms : ' For the payment of the sum of Rs. 1,500 with interest I have borrowed from you on a promissory note of date, I hereby put it on record that the title deeds re my premises already deposited with you shall be held by you as collateral security.' It was held that the letter constituted the mortgage contract and that it was inadmissible for want of registration. The distinction between the two cases lies in the fact that in Kedarnath's case  11 Beng LR 405 (Cal), the loan and deposit were completed irrespective of the endorsement, while in Bhairab Chandra's case  57 IC 686 (Cal), there was no completed contract of mortgage before the letter passed and it was by the letter that the deeds were made security for the fresh loan.In Rachpal Mahraj v. Bhagwandas Daruka, AIR 1950 SC 272, Patanjali Sastri J. (as he then was) has stated the law thus :
' The crucial question is : Did the parties intend to reduce the bargain regarding the deposit of title deeds to the form of a document 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 itself, being merely evidential does not require registration.' In all cases in which a deposit is made by a letter which explains why the deeds are deposited the letter must be registered, for there is nothing but the letter to connect the deposit with the debt. Cases cited in footnote are instances in which registration was held to be necessary and those cited in footnote are instances in which registration was held to be not necessary.'
13. On the alleged ground that the wording in exhibit A-5 in the present suit is more or less similar to the wording in the letter in Bhairab Chandra's case  57 IC 686 (Cal), quoted above and taking due note of the circumstances in the case, the learned district judge held that in this case also it is exhibit A-5 by which the deeds are made security for the loan in which event it must comply with the provisions relating to registration and unless registered it cannot be acted upon for purposes of creating a charge. Therefore, the district judge came to the conclusion that the appellant is not entitled for a decree by the sale of the right, title and interest of the 2nd respondent and only entitled for a personal decree on the basis of the promissory note.
14. I might here itself point out that the learned district judge is clearly in error in stating that the wording in the letter in Bhairab Chandra's case  57 IC 686 (Cal) is similar to the wording in ext. A-5. In Bhairab Chandra's case, the defendant had mortgaged his house to the plaintiff and had delivered his title deeds to him for the purpose of that mortgage. He then took a fresh advance of Rs. 1,500, executed a promissory note for that amount and on the same date sent to the plaintiff a letter in these terms : ' For payment of the sum of Rs. 1,500 with interest I have borrowed from you on a promissory note of date. I hereby put it on record that the title deeds regarding my premises already deposited with you shall be held by you as collateral security.' It could be said in the nature of the wording therein that the collateral security was created by that letter. On the other hand, in the present case, what is stated in Ext. A-5 is only that the list of title deeds are being given, which title deeds had already been deposited with the plaintiff as security for the due payment of the amount concerned. What is recorded is a fact that the mortgage had already been created by the deposit of title deeds earlier and by the letter only a list of title deeds was being given. It is difficult to state in this case that Ext. A-5 can be treated as a document creating a mortgage.
15. It will be useful in this connection to refer to certain decisions. In Sundarachariar v. Narayana Ayyar, AIR 1931 PC 36, the case revolved on the following facts : A person in Madras gave a promissory note and on the same date gave a memorandum which contained a list of the title deeds with the introductory words : ' As agreed upon in person, I have delivered to you the undermentioned documents as security.' The Privy Council held that the memorandum was none other than a written record of the particulars of deeds, the subject of an agreement, constituted in fact by the act of deposit and the payment of the money, and that it neither purported nor operated to create or declare any right, title or interest in the property included in the deeds, with the result that it did not require registration. Even if it was a condition of the advance that the memorandum was to be given, the fact that the memorandum was prepared, signed and handed over to the mortgagee before the advance of the balance of the money to be secured by the deposit could not alter the nature and meaning of the document. It was and remained a list of the documents deposited and nothing more. It did not embody the terms of the agreement between the parties and did not require registration,
16. I think on the facts of the case it can also be said with equal force that exhibit A-5 did not purport or operate to create or declare any right, title or interest in the property included in the deeds. It only gives a list of documents deposited and nothing more.
17. In Rachpal Maharaj v. Bhagwandas Daruka, AIR 1950 SC 272, the relevant memorandum that came up for consideration was in the form of a letter addressed to the respondents' firm and was in the following terms (p. 273) :
' 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 depositedwith 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......'
In that case, Justice Patanjali Sastri (as he then was) said, ' there are numerous decisions, some of them not easy to reconcile, where this question was considered with reference to the document concerned in the particular case '.
18. His Lordship referred to Sundarachariar v. Narayana Ayyar, AIR 1931 PC 36, and Hari Shankar Paul v. Kedar Nath Saha, AIR 1939 PC 167, wherein title deeds were deposited accompanied by a memorandum when part of the advance arranged for was made. In that case, Hari Shankar Paul v. Kedar Nath Saha, AIR 1939 PC 167, some days later when the balance was advanced, another memorandum was delivered superseding the earlier one, and this was a formal document stating the essential terms of the transaction, ' hereby agreed ' and referred to the moneys ' hereby secured '. It also conferred an express power of sale on the mortgagee. Lord Macmillan, after reviewing the earlier decisions of the board, held that the document required registration observing (p. 170):
'......where, as here, the parties professing to create a mortgage bydeposit of title deeds contemporaneously enter into a contractual agreement, in writing, which is made an integral part of the transaction, and isitself an operative instrument and not merely evidential, such a documentmust, under the statute, be registered.'
19. After referring to these decisions of the Privy Council, Patanjali Sastri J. pointed out (AIR 1950 SC 272, 274) :
' Turning now to the memorandum before us, it is clear, on the face of it, that the parties did not intend thereby to create the charge. The document purports only to record a transaction which had been concluded and under which the rights and liabilities had been orally agreed upon. No doubt it was taken by the respondents to show that the title deeds of the appellants' properties were deposited with them as security for the moneys advanced by them, and to obviate a possible plea that the deeds were left with them for other purposes, as indeed was contended by the appellant in his written statement, taking advantage of the non-registration of the memorandum in question. But that is far from intending to reduce the bargain to writing and make the document the basis of the rights and liabilities of the parties.'
20. In United Bank of India v. Lekharam Sonaram and Co., AIR 1965 SC 1591, the Supreme Court pointed out that, when the debtor deposits with the creditor title deeds of his property with an 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 classes of mortgage. 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 security requires registration under Section 17 of the Indian Registration Act, 1908. The letter in question, in that case, did mention details of title deeds, which were to be deposited with the bank and also did not mention what was the principal amount borrowed or to be borrowed, nor it referred to rate of interest for the loan. In the circumstances of the case it was held that the letter was not intended to be an integral part of the transaction between the parties and did not by itself operate to create an interest in the immovable property and, therefore, it did not require registration.
21. In a later case in Deb Dutt Seal v. Raman Lal Phumra, AIR 1970 SC 659, the relevant letter which was alleged to create mortgage by deposit of title deeds was in the following terms (p. 664) :
' I write to record that I delivered to and deposited with you this day... my title deeds relating to the premises No. 35, Puddapukur Road, Calcutta, solely belonging to me with intent to create security for my liability for the moneys payable under the three hundies dated this day for the sum of Rs. 80,000 drawn by me in your favour and I have undertaken to execute a legal mortgage at my cost whenever called upon by you to do so. I further assure you that the said premises No. 35 is free from all encumbrances and the same absolutely belongs to me.'
22. The defence in that case was that the letter required registration and was therefore inadmissible in evidence. In the majority judgment rendered by Shelat J. (on his behalf and on behalf of Jaganmohan Reddy J.), it was held that the letter on its true interpretation; and in the surrounding circumstances merely recorded a past transaction and did not intend to create any mortgage. The undertaking to execute a legal mortgage and the assurance that the premises were free from all encumbrances did not create or declare any interest in the premises. The court said thus :
' It is not correct to say that even if a document on the face of it and properly interpreted in the light of the circumstances does not disclose the creation of a mortgage, or even if the document itself is not an operative instrument and is merely evidential, it requires registration.'
23. In this connection, I might also refer to a recent decision of the Karnataka High Court in Murugharajendra & Co. v. Chief Controlling Revenue Authority, AIR 1974 Kar 60 [FB]. In that case, there was already an equitable mortgage of the petitioner-company's fixed assets, the company wanting to borrow additional sum requested the bank to advance the additional sum on the self same assets and the bank having agreed to the proposal got a resolution of its board of directors passed therefor, and informed of it by a letter in which reference to earlier mortgage by deposit of title deeds was made, on the question whether the letter was liable to stamp duty. On the facts of the case, it was held that the letter was not intended by the mortgagees to be the sole repository of the terms of the equitable mortgage but it was only an acknowledgment of an already concluded equitable mortgage and as such is not liable to stamp duty under Article 6. The court said :
The ' essential factor which determines whether a document is one by which an equitable mortgage is created is the intention of the parties thereto. The existence or otherwise of such intention can be established either by the documents produced by the parties or by oral evidence or by both '.
24. The court said (p. 63): 'the document concerned therein does not state that an equitable mortgage was being created by the execution of the same by the mortgagors. It is in the nature of a record of what had been done earlier by the constructive delivery of title deeds with the intention to create an equitable mortgage '.
25. Mr. Radhakrishna Menon, learned counsel for the respondents, referred me to the decision in V. Gangadhara Rao v. Andhra Bank Ltd., AIR 1971 SC 1613, in support of his contention that ext, A-5 creates a mortgage and being unregistered, it cannot be acted upon for the purpose of creating a charge. I am not able to understand, with great respect to the learned counsel, how that decision is helpful to him. In the circumstances, it is necessary to go into the facts of that case. The 4th defendant in a suit was the appellant in that case before the Supreme Court. The suit was instituted by the Andhra Bank, contesting respondent in the appeal, to recover the loans advanced to the Godavari Sugars Refiners Ltd., defendant No. 5 in the suit. The High Court and the courts below had decreed against the appellant purely on the basis that ext. A-5 letter in that case given by defendants Nos. 1, 4 and another to a branch of the plaintiff-bank while depositing exts. A-7 and A-8 title deeds of the 4th defendant. The claim against the 4th defendant by the bank is that he along with the 1st defendant in the suit had requested the plaintiff-bank to refrain from taking legal action at a particular point of time against defendants Nos. 1 to 3 and to give themtime. For all sums due till then and owing thereafter on any account by defendants Nos. 1 and 4 either individually or jointly with others, two title deeds, exts. A-7 and A-8, of the 4th defendant were deposited with the bank on January 15, 1953, thereby creating equitable mortgage over the properties comprised therein. The 4th defendant denied that he had requested the bank to refrain from taking legal action against defendants Nos. 1 to 3. He had according to him deposited exts. A-7 and A-8 to create an equitable mortgage to secure an overdraft loan for Rs. 25,000 borrowed by him and that deposit has nothing to do with the suit transactions.
26. In considering the question whether Exts. A-7 and A-8, in that case, were deposited to secure suit debts, the Supreme Court had to consider the scope and effect of ext. A-6 letter given by defendants Nos. 1, 4 and another to the bank. Earlier to ext. A-6 the 4th defendant had applied for a loan of Rs. 50,000. As one of the items covered by ext. A-7 was on the joint ownership of himself and his brother, defendant No. 1, the officers of the bank wanted defendant No. 1 also to join in making the deposit of title deeds : but defendant No. 1 was at that time in Madras ; therefore, a printed form was given to the 4th defendant for getting the signature of defendant No. 1, and the place at which defendant No. 1 was to sign in that form was marked in pencil ; that form was sent to Madras with his clerk accompanied by a bank official ; defendant No. 1's signatures were obtained and after that the 4th defendant signed in the presence of the bank agent and gave the form to the bank's agent without scoring out any of the words in the printed form. The material portion of ext. A-6 reads :
'To The Agent,The Andhra Bank Ltd., Masulipatam. Dear Sir,
I/we write to put on record that as already agreed upon I/we have on 15-1-53 delivered by way of deposit at Masulipatam the following documents of title to immovable property with intent to secure the repayment to the bank of moneys that are now due or shall from time to time or at any time be due from me/us either solely or jointly with any other person or persons to the bank whether on balance of account or by discount or otherwise in respect of bills of exchange, promissory notes, cheques and other negotiable instruments or in any manner whatsoever and including interest, commission and other banking charges and any law costs incurred in connection thereto.'
27. In considering the question raised whether ext. A-6 created a mortgage in respect of the suit transactions, Justice Hegde, speaking for the Supreme Court (V. Gangadhara Rao v. Andhra Bank Ltd., AIR 1971 SC 1613),pointed out that from the recitals of ext. A-6, it would be seen that the memorandum in question was intended to put on record the terms already agreed upon. That being the case, the document cannot be considered as a contract entered into between the parties. If the parties intended that it should embody the contract between them, it would have been necessary to register the same under Section 17 of the Registration Act, 1908. In this connection, the'learned judge referred to the decision in Rachpal Mahraj v. Bhagwan-das Daruka, AIR 1950 SC 272, where it was said that when a debtor deposits with the creditor 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 choose 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 creation 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 Indian Registration Act as a non-testamentary instrument, creating an interest in immovable property, where the value of such property is 100 rupees and upwards. 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
28. In this connection, the learned Judge of the Supreme Court also referred to the following observations of Lord Shaw of Dunfermline in Pranjivandas Mehta v. Chan Ma Phee, AIR 1916 PC 115) :
'The law upon this subject is beyond any doubt : (1) Where titles of property are handed over with nothing said except that they are to be security, the law supposes that the scope of the security is the scope of the title. (2) Where, however, titles are handed over accompanied by a bargain, that bargain must rule. (3) lastly, when the bargain is a written bargain it, and it alone, must determine what is the scope and the extent of the security. In the words of Lord Cairns in the leading case of Shaw v. Foster  LR 5 HL 321 at p. 341. ' Although it is a well-established rule of equity that a deposit of a document of title, without more, without writing, or without word of mouth will create in equity a charge upon the property referred to, I apprehend that that general rule will not apply where you have a deposit accompanied by an actual written charge. In that case you must refer to the terms of the written document, and any implication that might be raised, supposing there were no document, is put out of the case and reduced to silence by the document by which alone you must be governed'.'
29. Justice Hegde (AIR 1971 SC 1613, 1620) also quoted the following observations of Lord Carson in Subramanian v. Lutchman, AIR 1923 PC 50:
' The law upon the subject admits of no doubt. In the case of Kedarnath Dutt v. Shamloll Khettry  11 Beng LR (OCJ) 405 Couch C.J. said : ' The rule with regard to writings is that oral proof cannot be substituted for the written evidence of any contract which the parties have' put into writing. And the reason is that the writing is tacitly considered by the parties themselves as the only repository and the appropriate evidence of their agreement. If this memorandum was of such a nature that it could be treated as the contract for the mortgage, and what the parties considered to be the only repository and appropriate evidence of their agreement, it would be the instrument by which the equitable mortgage was created, and would come within Section 17 of the Registration Act'.'
30. After quoting this, the Supreme Court observed that ext. A-6 was not registered. If that document was considered as a contract of mortgage between the bank and the depositors, the same having not been registered, it was inadmissible in evidence. If on the other hand that document was considered as a mere memorandum evidencing the deposit of title deeds in pursuance of an earlier contract then the correctness of the recitals therein can be gone into without being inhibited by Sections 91 and 92 of the Evidence Act. On that basis the court said, whichever view is taken, the bank's case will have to fail and on an overall consideration of the evidence and probabilities of the evidence the court was satisfied that exts. A-7 and A-8 in that case were not deposited with the bank to secure the debts due from defendant No. 1 to the bank.
31. From the above, it is clear that the decision (cited above) has no application here. No doubt, the law in regard to the question has been correctly laid down, and the Supreme Court accepts it to be so, in the two quotations from the Privy Council cases referred to in the Supreme Court case. If the title deeds were handed over accompanied by bargain evidenced by written agreement, then that bargain must rule and being a written bargain it must be registered. In this case, ext. A-5 is not really the bargain between the parties. It only records an earlier deposit of title deeds.
32. Looked in the light of the above cases, I have no hesitation to hold that ext. A-5 itself does not create a mortgage. It is only a record of the transaction already entered into by the delivery of the title deeds. The letter itself was written giving the list of title deeds relating to the properties concerned. In the light of the conclusions that I have arrived at, the appellant-plaintiff would be entitled to a decree for sale of property also. The plaintiff would be entitled to such a decree of the amount sued on, subject to adjustment of the amounts subsequently paid as per exts. B-1 to B-4. It had been submitted on behalf of the plaintiff that payment made as per exts. B-1 to B-4 had been adjusted towards the suit amount. The plaintiff would be entitled to costs of the appeal.
33. The appeal is disposed of as above.
34. July 6, 1978:--I had dictated the judgment on June 21, 1978. However, the learned counsel for the respondent wanted to make some further submissions in the matter. After hearing his further submissions, I have come to the same conclusions and the judgment is being now pronounced.
35. July 11, 1978 :--This case was posted for being spoken to today, though I had delivered judgment in this case on July 6, 1978.
36. I had pointed out in the judgment that it had been submitted on behalf of the plaintiff that payments made as per exts. B-l to B-4 had been adjusted towards the suit amount. Whether such adjustments had been made can be looked into in the execution proceedings. If credit had not been given to such payments, that will certainly be adjusted. The judgment in this case will not be a bar to look into that question in the execution proceedings.
37. I had omitted earlier to refer to the great assistance that I have received in the disposal of the case from Sri K. P. Dandapani, counsel for the appellant, and Sri K. P. Radhakrishna Menon, counsel for the respondent, who between them had referred to all the relevant decisions in the matter.
38. This will form part of the judgment rendered.