1. This appeal by the plaintiffs and the memorandum of objections by the defendants (respondents 1, 3 4 and 5) arise out of a suit filed in the subordinate Judge's Court of Bezwada So recover about Rs. 40,000 on the basis of an equitable mortgage.
2. Defendants 1 to 4 are the heirs and executors of one Uppaluri Venkatarama Seshayya who borrowed the suit amount, defendant 1 being the son, defendant 2 being the widow and defendants 3 and 4 being the executors under the will. Defendant 5 is the subsequent mortgagee and purchaser of some of the properties. Defendants 6 to 8 are legatees of some of the properties under the same will, defendant 8 being the same person as the third but impleaded as legatee. Plaintiff 1 is the widow and plaintiff 2 is the son of the original creditor Venkataramayya. Venkataramayya was originally a native of the Kistna. District, but latterly he was residing at Madras and was carrying on money lending business and was occasionally going to the Kistna District. On one such occasion the debtor Venkatarama Seshayya handed over a letter, Ex. C, dated 26th May 1917, giving a list of his properties worth about Rs. 1,50,000; and a list of the debts due by him amounting to about Rs. 40,000. The letter says that he intended to take a loan from Venkataramayya and that the information in the letter was given so that he ' may not entertain any doubt,' thereby meaning any doubt of the debtor's solvency. But the letter makes no mention about any deposit of title-deeds or of any mortgage. On 28th May, Rs. 9,000 were borrowed under a promissory note, Ex. A, and the payees of the note were Venkataramayya and his wife, plaintiff 1, or either or survivor. On 14th June, Rs 5,000 were borrowed under another note, Ex. B, payable to the same persons. These two notes were executed at Masulipatnam. On 27th October Venkatarama Seshayya went to Madras and there borrowed a sum of Rs. 10,000 executing a promissory note, Ex. D, payable to the same persons as before. On this occasion;he also executed Ex. F which is headed:
List of documents belonging to Wuppulooru Laksmi Narayana Pantulu Garu, son of Ramayya Garu.
3. This Laksmi Narayana was the father of Venkatarama Seshayya. At the end of the list we have got this sentence: ' These documents are given as security for the debts I owe you' and it is then signed by W. V. Ramaseshayya at Madras. Under Section 59, T. P. Act, an equitable mortgage can be created without any registered instrument by the mere deposit of the title-deeds in certain towns of India one of which is Madras, but not in the mofussil of the Madras Presidency. The title-deeds handed over on 27th October were obviously so handed over with a view to create an equitable mortgage. On 10th November 1917, a further sum of Rs. 5,000 was borrowed on another promissory note, Ex. G, and on the same day Exs A and B were renewed by Ex. H for Rs. 14,700, the amount of Rs. 700 representing the interest. The present suit is brought to recover the sums due on the above notes.
4. The Subordinate Judge of Bezwada held that all the suit notes were genuine, that Ex. F did not require registration and was, therefore, admissible in evidence, that there was a valid equitable mortgage for the sum of Rs. 10,000 borrowed under Ex. D, but there was no 'equitable mortgage for the Rs. 5,000 borrowed under Ex. G or for the sum of Rs. 14,000 due under Ex. H. He also found against the plea of part payment of Rs. 4,000 by the defendants. He accordingly passed a sale decree in respect of Ex. D and a mare money decree in respect of other amounts. The plaintiffs filed this appeal for the sums in respect of which a sale decree is disallowed and the respondents filed the memorandum of cross-objections in which they raised the question that Ex. F requires registration and is inadmissible and therefore there is no equitable mortgage and the plea of part payment of Rs. 4,000.
5. It will be convenient now to take up the question of the admissibility of Ex. F. At the time when the Subordinate Judge decided the suit the case reported in Subramonian v. Lutchman A.I.R. 1923 P.C. 50, had not been decided. The point has now to be considered with reference to that decision. In that case the debtor executed a letter running as follows;
We hand you herewith title-deeds relating to fifth class Lots Nos. 78, 79, and 80, Block E, each measuring 25 by 50...belonging to Saleman Ahmed Seedat...this please hold as security against advances made to us: we also hand you second mortgage executed in our favour by C. Ranga Swamy Moodaliar.... On this we had advanced Rs 32,000. Please also hold this as further security against advances made to us.
6. He had (1) an equitable mortgage by deposit of title-deeds and (2) a second mortgage under a document; and he purported to create an equitable sub-mortgage by depositing his title-deeds with the creditor. Their Lordships of the Privy Council after quoting the dictum of Couch, C.J., from Kedarnath Dutt v. Shamlall Khettry 11 Beng. L.R. 405; secondly from Pranjivandas Jagjivandas Mehta v. Chan Ma Phae A.I.R. 1916 P.C. 115; and thirdly from the judgment of Lord Cairns in Shaw v. Foster  5 H.L. 341, found that the letter constituted the bargain between the parties and that, without its production in evidence, the plaintiff's claim could not be established and, as it was unregistered, it ought to be rejected. In support of their conclusion they refer to the words:
We hand you herewith title-deeds. This please hold as security.' The learned vakil for the appellant sought to distinguish this case by saying that in the present case Ex. F is merely a list of documents and does not contain any note of the bargain between the parties. I would agree with the appellant's contention if the last sentence in Ex. F were not written. But that sentence: ' These documents are given as security for the debts I owe you' is similar to the letter considered by the Board of the Judicial Committee. I am unable to distinguish this case from the decision in Subramonian v. Lutchman A.I.R. 1923 P.C. 50. Reference to Shaw v. Poster  5 H.L. 341 by the Privy Council shows that we can refer to the 'terms of the written document only, and
any implication that might be raised, supposing there 'was no document, is put out of the case and reduced to silence by the documents by which alone you must be governed.
7. It follows that while Ex. F was inadmissible for want of registration no other evidence can be referred to or relied on for proving the bargain which was reduced to writing in Ex. F. At the time when Ex. F was executed there were three promissory notes on which money was due to Venkataramayya and plaintiff 1, namely Ex. D, executed on 27th October 1917 and Exs. A and B. Assuming that Ex. F was intended to create an equitable mortgage on its date for these three debts, that mortgage cannot be proved.
8. The next question is whether there is an equitable mortgage in respect of Exs. G and H. Ex. G was executed on 10th November, about a fortnight after Ex. F. The plaint alleges that ' the said Venkataramaseshayya further agreed on the same day and at the time of the execution of the said promissory notes D and E, that the title-deeds B series should stand deposited as security for this loan also The notes D and E mentioned in the plaint are the notes G and H as finally exhibited. Plaintiff 1 gives evidence supporting the allegation in the plaint. She says:
At the time of the execution of Exs. G and H we objected to give such large sums on pro-notes. Then U. V. Ramaseshayya said that security was already given and that moneys may be advanced on that security whenever he wanted. It was subsequent to this that we sent the money to U. V. Ramaseshayya whose acknowledgments are Ex. J and Ex. J-1.
9. Exhibits J and J-l are acknowledgements for the money lent under Ex. G. Thus, on 27th October 1917, the title-deeds already deposited were offered as security for a further loan, the money being actually remitted and received under Ex. J and J-l dated 20th and 26th November. By these dates the loan and the deposit were complete and there is no written instrument reducing the bargain to writing. Thus there is no objection similar to the one regarding Ex. D. I therefore think that there is a valid equitable mortgage in respect of the debt under Ex. G. The case cited by the Subordinate Judge Bhairal Chandra Bose v. Anath Nath De  Cri.L.J. 375 has no bearing on the matter.
10. The next question is whether there is a proper equitable mortgage in respect of ' Ex. H, which, as we have already seen, is the renewal of Exs. A and B If the renewal had not been made and if the debt is claimable only under Exs. A and B, the only equitable mortgage was by reason of Ex. F and that, we have already seen, is invalid. But Exs. A and B are renewed by Ex. H on 10th November and plaintiff 1 swears that Ramaseshhayya said that security had already been offered and that moneys might be advanced on that security whenever he wanted. This was at the, time when Exs. A and B were renewed by Ex. H. The renewal contains an additional sum of Rs. 700 as interest. It is true that the words attributed to Ramaseshhayya support the suggestion that there was a valid mortgage in respect of the debts due under Exs. A, B and D and that it now turns to be invalid; but the words also show that for all further transactions the old title-deeds were to be security and though there was no valid security for Exs. A and B, because Ex. F was inadmissible, the objection does not apply to holding that there is an equitable mortgage in respect of the renewal under Ex. H for which the only security was by reason of the old deposit. It seems to me that there is no legal objection to a valid equitable mortgage in respect of Ex. H. Thus I am of opinion that there is a valid equitable mortgage in respect of Exs. G and H but not in respect of Ex. D.
11. The appellants contend that, even in respect of Ex. D, they can prove an equitable mortgage by deposit of title-deeds, by other evidence ignoring Ex. F, and such other evidence is furnished by a letter, Ex.K, dated 31st March 1918, under which Ramaseshayya took back one of the sale-deeds deposited with Venkataramayya. In the letter he says:
Lodged with you as security along with other documents left in your custody for the debt borrowed of you,
12. The Subordinate Judge thought that on account of the use of the word 'debt' (singular) Ex. K referred only to one debt, namely that covered by Ex. D; but I cannot; agree with this construction of Ex. K. The words 'debt borrowed of you' refer to the total indebtedness of Ramaseshayya to Venkataramayya on that date, that is, it covers all the previous debts due under Exs. D, G and H which was in renewal of Exs. A and B. But assuming that Ex. K in that way is an admission of a deposit of title-deeds in respect of all the prior debts, the question will arise whether, in so far as the transaction represented by Ex. F, that is the transaction of 27th October 1917, is concerned, any other evidence can be given. That bargain was reduced to writing and no other evidence can be given under Section 91, Evidence Act. It is to make this clear that their Lordships of the Privy Council in Subramoniam v. Lutchman A.I.R. 1923 P.C. 50, quoted from the judgment of Lord Cairns in Shaw v. Foster  5 H.L. 341 saying that
any other implication is put out of the case and reduced to silence by the documents by which alone you must be governed.
13. They also say that without the production of the letter the plaintiff could not establish his claim. This implies that no other evidence is admissible. In all the cases that arose after 50 Cal. this is the view that was taken. In Chunilal v. Vithaldas A.I.R. 1922 Bom. 440, Macleod, C.J., and Coyajee, J., held that where the bargain was reduced to writing it was not open to the plaintiff to prove otherwise the intention with which the document was deposited. The same view was also indicated by Schwabe, C. J,, in the decision in Krishnaiya v. Ponnuswami Ayyar A.I.R. 1924 Mad. 547, though it is only an obiter dictum and the point did not actually arise for decision. I therefore think that Ex. K cannot be utilized to prove an equitable mortgage in respect of Ex. D as Ex. F is the only document that can be received in evidence. But this objection does not apply in the case of Ex. H, for the equitable mortgage now found in respect of: the document is the mortgage created by what happened on 10th November and not the equitable mortgage sought to be; created by Ex. F on 27th October in respect of Exs. A and B.
14. The next point which requires consideration is whether the sum of Rs. 4,000 said to have been paid by the defendants-was really paid. On this point I do not-see any reason to differ from the trial Judge. The defendants filed their account book, Ex. 3a, which shows an entry to the effect that Rs. 4,000 was taken by Rangavajhula Ramayya to Masulipatam for the purpose of paying to Venkataramayya. So far there is no reason to. suspect the genuineness of the entry; but the question will arise whether Rammayya having; taken the amount of Rs. 4,000 paid it to Venkataramayya. On this point the only evidence we have is that of D. W. 1 (the same Ramayya) who took the amount and who is accountable for its proper payment. We have got this fact that no receipt was taken for the payment of such a large sum like Rs. 4,000. This is most unusual and very unbusinesslike. It is very difficult to believe that such a large-sum of money was paid without taking a formal receipt. When, in addition to this absence of a receipt, the only evidence available in the case is that of the very person whose embezzlement of the money is the only alternative to the payment the matter becomes more difficult of acceptance. Ramayya who was impleaded in different capacities as defendants 3 and 8 raised a number of pleas which have all now been found to be false, namely that Ex. G is not genuine and that no security was given for it. He is the executor of Ramaseshayya's estate and is highly interested. He does not seem to be a person of such a position that it is impossible to disbelieve his evidence. Above all we have the improbability of the payment of a large sum without a proper receipt. I therefore think it is not safe for me to differ from the trial Judge on this matter.
15. The result is the plaintiff will have a sale decree in respect of the amount due under Exs. G and H with further interest at the contract rate after the date of plaint up to six months from this date, and there will be a personal decree against defendants 1 to 4 and 6 to 8 in respect of the amount due under Ex. D to the extent of the assets of Ramaseshayya in their hands as prayed for in the plaint.
16. The plaintiff will get his proportionate costs throughout relating to Exs. G and H along with the rest of the mortgage amount, but as to Ex. D he will get his costs throughout from defendants other than defendant 5.
17. As to defendant 5 he will get his proportionate costs on Ex. D in the memorandum of objections. The respondents will pay appellants proportionate costs relating to Rs. 4,000. Otherwise each party will bear his own costs in the memorandum of objections.
18. I agree. The question whether a written document which accompanies a deposit of title-deeds is to be regarded as the mortgage instrument or simply as a record of the fact that a deposit has been made, must be determined by the construction of the document as well as by the evidence of the circumstances in which the document is given. If the document is intended to constitute the bargain between the parties, then undoubtedly the document alone is admissible evidence of the bargain, and it is inadmissible if it has not been registered: see Subramaniam v. Latchman A.I.R. 1923 P.C. 50 and Krishnaiya v. Ponnuswami Ayyar A.I.R. 1924 Mad. 547.
19. In the case before us, one U. V. Rama Seshayya (now represented by the defendants in the suit) wrote to one Venkataramayya (whose widow and son are the present plaintiffs) a letter dated 26th May 1917 (Ex. C) informing Venkataramayya of his intention to take a loan, and stating particulars of his assets and liabilities. These particulars ' showed that Rama Seshayya was the owner of considerable immoveable properties. The letter ended with the request:
If after taking all these facts into consideration you are satisfied, I pray you will kindly give me the loan.
20. The purpose of these particulars of property was obviously to satisfy Venkataramayya that Rama Seshayya could give ample security for the proposed loan.
21. On 28th May 1917 Rama Seshayya took a loan of Rs. 9,000 executing a pronote (Ex. A); on 14th June 1917 he took another loan of Rs. 5,000 executing, a pronote (Ex. B); on 27th October 1917 he took a further loan of Rs. 10,000 and executed a pronote (Ex. D).
22. All these pronotes were in favour of Venkataramayya and his wife, the present first plaintiff,
23. On this same day, 27th October 1917, Rama Seshayya deposited his title-deeds with Venkataramayya, and with the title-deeds he handed over the document Ex. F. The Subordinate Judge has found as a fact that Ex. E and the title- deeds were handed over together, and I think this conclusion is right. The only available evidence on this matter is the evidence of Venkataramayya's widow, plaintiff 1 (P. W. 1). She says in her examination-in-chief:
He (Rama Seshayya) took a loan of ten thousand rupees after Ex. C and executed a pro-note Ex. D here in Madras in my name and in the name of my late husband. He deposited title deeds as security for his loan under Ex. D. I saw the title-deeds then and a list of these title-deeds was prepared then.... When these title-deeds were deposited with us a list of these documents was prepared by U. V. Rama Seshayya and given to us and it is this, Ex. F.
24. In cross-examination she says:
Exhibit F was written in Madras. Exs. D and F were written at the same time and I was present then. When Exs. D and F were written myself, my husband and U. V. Rama Seshayya. were present and none else.
25. It appears from the evidence of D. W. 1 who was a clerk of Rama Seshayya, that Ex. F was written by this witness; but it is not disputed that the signature on the document is in Rama Seshayya's handwriting. P.W. 1 is, therefore, in error when she says that Exs. D and F were written at the same time. But I do not agree with the Subordinate Judge that her mistake ' is sufficient to discredit her testimony.' She may have meant that the documents were executed at the same time. At any rate no point on this discrepancy has been made in the argument before us, and I am of opinion that P.W. 1's evidence sufficiently proves that Ex. F was handed over at the same time when the title-deeds were deposited.
26. Exhibit F is a list of title-deeds. But at the foot of the document, above the signature of Rama Seshayya, is this passage: ' These documents are given as security for the debts I owe you.' In the light of these words it is impossible to regard Ex. F as merely a list of title-deeds or as a record of the fact that title-deeds had already been deposited. I think the only possible construction of this passage is that it shows an intention to recite the terms of the agreement between the parties. In this view, Ex. F being unregistered is inadmissible in evidence and therefore, all proof that the loan covered by Ex D is secured by an equitable mortgage fails.
27. Subsequent to these transactions Rama Seshayya on 10th November 1917 took a further loan of Rs. 5,000 for which he executed a pronote (Ex. 6) in favour of Venkataramayya and his wife, and on the same date executed a pronote (Ex. H) for Rs. 14,700 for the amount of principal and interest due in respect of the loans for which he had given pronotes Exs. A and B. P.W. 1 in her evidence says:
At the time of the execution of Exs. G and H we objected to give such large sums on pronotes. Then U.V. Rama Seshayya said that security was already given and that moneys may be advanced on that security whenever he wanted. It was subsequent to this that we sent the money to U. V Rama Seshayya whose acknowledgments are Ex. J and Ex. J-1.
and she repeats this story in cross-examination. It appears to me that this evidence is sufficient to prove the agreement between the parties that the deposit of title-deeds already made on 27th October 1917 should be security for the subsequent loans. In respect of these two loans, therefore, I am of opinion that they were secured by an equitable mortgage.
28. There is one other matter for consideration, the question whether a sum of Rs. 4,000 was paid to Venkataramayya by Rama Seshayya. I agree that this payment has not been proved. It is hard to believe that Rama Seshayya, an Assistant Cashier in the Imperial Bank; and a man accustomed to business methods, would have paid so large a sum of money without obtaining a receipt from the payee.