Property lawMortgageSupreme Court of India

KJ Nathan v SV Maruty Reddy

AIR 1965 SC 430; (1964) 6 SCR 727; 1964 INSC 3219641 min read
The case in brief30-second read
Facts
The creditor already held the debtor's title deeds in Madras on 10 May 1947 while lending to him. A document of 5 July 1947, later registered, recorded that the deeds had been deposited on 10 May 1947 to create a mortgage.
Issue
Was a mortgage by deposit of title deeds created, and from what date?
Held
The essentials are (i) a debt, (ii) a deposit of title deeds, and (iii) an intention that the deeds be security for the debt.
Principle
A mortgage by deposit of title deeds (S.58(f) TPA) needs only a debt, a deposit of title deeds (actual or constructive) and an intention that the deeds be security; no written instrument is needed, and intention is a question of fact.
Cite this

Facts

  • The creditor already held the debtor's title deeds in Madras on 10 May 1947 while lending to him.
  • A document of 5 July 1947, later registered, recorded that the deeds had been deposited on 10 May 1947 to create a mortgage.
  • A later registered mortgagee of the same property disputed the priority of the deposit mortgage.

Issue

  1. Was a mortgage by deposit of title deeds created, and from what date?

Held

  • The essentials are (i) a debt, (ii) a deposit of title deeds, and (iii) an intention that the deeds be security for the debt.
  • Intention is a question of fact, proved by oral, documentary or circumstantial evidence. There is no presumption of law that a mere deposit is a mortgage.
  • Delivery can be constructive: where the creditor already holds the deeds, the parties may agree to treat them as deposited.
  • The mortgage took effect from 10 May 1947 and prevailed over the later registered mortgage.

Cite this

Citation

KJ Nathan v SV Maruty Reddy AIR 1965 SC 430; (1964) 6 SCR 727; 1964 INSC 32

Reported: https://api.sci.gov.in/jonew/judis/3341.pdf ; https://indiankanoon.org/doc/1798395/. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.