1. The plaintiff in the suit out of which this appeal has arisen, prayed for the enforcement of an equitable mortgage. The plaintiff's case was that defendants 1 and 2 executed a hand-note in her favour on 30th March 1932 and on the same date deposited title deeds of certain properties as security for the loan on the hand-note, thus creating an equitable mortgage in her favour. A memorandum was said to have been executed by the defendants 1 and 2 evidencing the fact of the deposit of title deeds. The case of the plaintiffs was that the memorandum executed by the defendants 1 and 2 had somehow passed into the hands of defendants 4 and 5 who it was alleged had succeeded in obtaining a collusive mortgage bond executed by defendants 1, 2 and 3 in their favour on 16th December 1932. It is necessary to mention in this connexion that the properties covered by the title deeds deposited by defendants 1 and 2 on 30th March 1932, were the same as those hypothecated by the three defendants 1, 2 and 3 in the mortgage deed executed by them in favour of defendants 4 and 5 on 30th March 1932. The claim of the plaintiff in the suit was at first resisted by defendants 1, 2, 4 and 5 in the suit: but in view of the events that subsequently happened, it is not necessary for the purpose of this appeal to consider the case, of the defendants other than defendants 4 and 5. These defendants asserted that a mortgage by defendant 1 of an undivided share of property belonging to a joint family governed by the Mitakshara school of Hindu Law was invalid in law; further that there was partition amongst defendants 1 and 3 (husband and wife) and their co-sharers, by virtue of which defendant 3 (the wife) acquired interest jointly with defendant 1 in respect of one of the items of property of which the title deeds were deposited with the plaintiff, on 30th March 1932. As to the nature of the transaction in favour of the plaintiff, it was pleaded in defence by defendants 4 and 5 that the memo referred to by the plaintiff in her plaint, did not and could not constitute and create any equitable mortgage; that it was inadmissible for want of registration, and further that as the memo constituted the bargain between the parties, no oral evidence of the transaction was admissible under the law. The case for the defence was that the memo had been suppressed by the plaintiff with an object, and a false statement was purposely made that it had passed into the hands of the defendants. The contesting defendants asserted that the mortgage in their favour executed by defendants 1, 2 and 3 on 16th December 1932 was a valid mortgage, and should prevail over the equitable mortgage by defendants 1 and 2 in favour of the plaintiff and alleged to have been created on 30th March 1932. The Court of first instance dismissed the plaint as against the defendants 4 and 5. On appeal by the plaintiff, the learned Additional District Judge, 24 Parganas, reversed the decision of the trial Court, and passed a preliminary decree in favour of the plaintiff on the footing of an equitable mortgage created in her favour by the defendants 1 and 2, directing the sale of the mortgaged properties specified in the plaint, on failure to pay the mortgage debt within the period of grace allowed by the Court. The defendants 4 and 5 appealed to this Court. The questions raised in support of this appeal on evidence in the case, and on the findings arrived at by the Courts below, were many and various, in view of the different matters in controversy between the parties concerned: the plaintiff on the one hand and the contesting defendants 4 and 5, the appellants in this Court, on the other. The main points, however, which arise for consideration are two in number; and we proceed to deal with them.
2. 1. In view of the pleadings of the parties, the memorandum the contents of which were proved by evidence and regard being had to the conclusions arrived at by the Court of appeal below on materials placed before the Court, we are definitely of opinion that the memorandum which was a part of the transaction evidencing an equitable mortgage by deposit of title deeds, was only the record of a completed transaction, and did not constitute a bargain as to the deposit of title deeds. The memorandum as such did not require registration, and the learned Judge in the Court of appeal below was right in holding that oral evidence as to the deposit of title deeds was admissible in evidence. Evidence was rightly admitted on this part of the case; and the conclusions on evidence arrived at by the Judge have to be accepted by us. There was, in the above view of the case before us, an equitable mortgage created by defendants 1 and 2 in favour of the plaintiff. On 30th March 1932, by deposit of title deeds; and the mortgage thus created was operative to the extent of the interests in the properties to which, the mortgagors, defendants 1 and 2, had title, and to that extent only. The mortgagee could not claim any title higher than the one the mortgagors had in the different items of property covered by the title deeds deposited with the plaintiff.
3. 2. The question that arises for consideration next, is whether the plaintiff could be allowed to have a mortgage decree against property which was owned by defendants 1 and 3 jointly, by virtue of a partition between the members of a joint family governed by the Mitakshara School of Hindu law. The fact of the partition was clearly established, and has been found by the Court of appeal below. On the terms of the partition deed Ex. B, in the case, it was beyond controversy, and it was definitely held by the trial Court, that the property which was the subject of the equitable mortgage by defendant 1 was allotted on partition to the defendants 1 and 3 jointly, their share having been left undefined and undetermined. Defendant 3 was not a mortgagor so far as the equitable mortgage in suit was concerned. On the materials on the record and on the conclusions arrived at by the trial Court referred to above, which have not been reversed by the Court of appeal below, the plaintiff was not entitled to get a mortgage decree in respect of properties Ka, Kha and Ga of the plaint, so as to bind the interest of defendant 3 who was no party to this equitable mortgage in favour of the plaintiff; the decree as passed by the Court of appeal below cannot therefore be upheld. In the above view of the case before us, and as a result of the decision arrived at by us, as indicated above, this appeal must be allowed, and we direct accordingly. The decree passed by the learned Additional District Judge, in the Court of appeal below, is varied to this extent, that in defaullt of payment of the decretal amount with interest at the rate mentioned in the handnote executed by the defendants 1 and 2 in the plaintiff's favour on 30th March 1932, and thereafter at 6 per cent per annum until realization, the right, title and interest of defendants 1 and 2 in the mortgaged property specified in the plaint will be sold for realization of the decretal debt, and that the right, title and interest of defendant 3 in the mortgaged property existing at the time of the mortgage in favour of defendants 4 and 5 on 16th December 1932 will not be affected by such a sale. In the circumstances of the case we make no order as to costs. The parties are to bear their own costs throughout the litigation including the costs in this appeal.