THE HON’BLE SRI JUSTICE N.V. RAMANA. W.P. No. 14698 of 2008 Oral order: The petitioner’s husband, who is proprietor of Tirupati Trade Centre, had taken a loan of Rs.5,00,000/- from the 4 th respondent-Bank in the year 2001 for development of his business. He oﬀered Plot bearing No. 602, VI Floor of Sukh Sagar Apartments, bearing MCH No. 3-5-805, Hyderguda, Hyderabad, as security for repayment of the same amount, together with interests and costs, and deposited the title deeds relating thereto on 19.01.2001, and also executed Registered Memorandum of Deposit of Title Deeds No. 216/2001, dated 25.01.2001. Subsequently the cash limit was enhanced to Rs.15,00,000/- in the year 2005 and thereafter to Rs.80,00,000/- in the year 2008, and he executed the Memorandum of Deposit of Title Deeds on 22.02.2005 and 19.03.2008 for the enhanced limits and created mortgage. The petitioner states that she having executed the Memorandum of Deposit of Title Deeds dated 19.03.2008 for repayment of the amount of Rs.80,00,000/- to the 4th respondent-Bank, and as per Article 7 of Schedule I-A of the A.P. Stamp Act, paid an of Rs.40,000/- towards stamp duty on the said Memorandum of Deposit of Title Deeds and presented for registration, but the 3rd respondent-Joint Sub Registrar of Assurances, without going through the contents of the document, insisted the petitioner to pay stamp duty on the instrument @ 3% on the loan amount treating it as a simple mortgage deed, and vide Memo No. 2/2008, dated nil, demanded the petitioner to pay an amount of Rs.2,39,000/- towards deﬁcit stamp duty under Article 35(b) of the Indian Stamp Act on the Memorandum conﬁrming the deposit of Title Deeds. It is this Memo, which the petitioner questioned in this writ petition as being illegal and arbitrary, and consequently direct the 2nd and 3rd respondent to register the Memorandum of Deposit of Title Deeds that is pending as Document No. 33/2008, by collecting stamp duty as per the provisions of Article 7 of Schedule I-A of the Indian Stamp Act, as amended by A.P. Stamp Act 19/2005, and registration fee as per G.O. Ms. No. 2045, Revenue (Registration) Department, dated 28.11.2005. The learned counsel for the petitioner submits that mortgage by deposit of title deeds as security for repayment of the money advanced as per the provisions of Section 58(f) of the Transfer of Property Act, is called Mortgage by Deposit of Title Deeds, and mere use of mortgager in the Agreement/Memorandum of Deposit of Title Deeds, does not entitle respondent Nos. 2 and 3 to collect stamp duty as per the provisions of Article 35(b) of the Stamp Act. He submitted that the Government of Andhra Pradesh by way of Act No. 19/2005, made amendment to Article 7 of Schedule 1-A of the Stamp Act, and rationalized the stamp duty on the agreement relating to deposit of title deeds, and reduced the stamp duty to 0.5% of the amount secured by such deed subject to a maximum of Rs.50,000/-. According to him, as per the explanation provided under Article 7 of Schedule 1-A, any document such as, letter/note/memorandum or writing relating to deposit of title deeds, are brought under the purview of Article 7, and as such, stamp duty has to be collected as provided thereunder, and not under Section 35(b) of the Stamp Act, which the 2nd and 3rd respondents sought demand in the instant case. He further submitted that the Government of Andhra Pradesh, vide G.O. Ms. No.2045, Revenue (Registration) Department, dated 28.11.2005 rationalized the registration fee payable on the registration of agreement/memorandum relating to deposit of title deeds under Article 7 of Schedule 1-A to the Indian Stamp Act, and reduced the registration fee to 0.1% on the loan amount subject to a maximum of Rs.1,000/-. He submitted that the petitioner executed the Memorandum of Deposit of Title Deeds dated 19.03.2008 for repayment of the amount of Rs.80,00,000/- to the 4th respondent-Bank, and paid an amount of Rs. 40,000/- towards stamp duty, as required by Article 7 of Schedule I-A of the A.P. Stamp Act, and presented the said document for registration, but the 3rd respondent-Joint Sub Registrar of Assurances, without looking into the contents of the document, treated it as a simple mortgage and insisted the petitioner to pay stamp duty on the instrument @ 3% on the loan amount, and vide Memo No. 2/2008, dated nil, demanded the petitioner to pay an amount of Rs.2,39,000/- towards deficit stamp duty under Article 35(b) of the Indian Stamp Act on the Memorandum conﬁrming the deposit of Title Deeds, which is illegal and arbitrary. However, the learned Assistant Government Pleader for Revenue appearing on behalf of the respondents brought to my notice a judgment of a learned single Judge of this Court in M/s. Siddhi Vegetable Oil Products v. Govt. of A.P.[1], wherein it was held that the action of the 3rd respondent in levying stamp duty @ 3% on the Memorandum of Deposit of Title Deeds under Section 35(1)(b) of the Stamp Act, treating it as simple mortgage, is not correct. The learned Judge, in para 8 of the said judgment, discussed about the diﬀerence between mortgage deed and memorandum of deposit of title deeds in the following manner: “Substantial diﬀerence exists between a Mortgage Deed and Memorandum of Deposit of Title Deeds. The only common feature in them is that both of them relate to the transaction of mortgage. The distinguishing feature is that the former brings about a transaction of mortgage by itself, whereas the latter refers to what has already taken place. In the judgment referred to above, the Supreme Court held that what becomes registerable under law, is a deed and not the transaction. If a transaction cannot exist independent of a deed, the transaction comes to be brought about by the deed itself. In other words, where a transaction is required to be evidenced through a registered deed, it comes into existence, with the registration, and it does not have an independent existence. Conversely, where a transaction can take place, without any registered deed, it comes into existence the moment the necessary ingredients are complied with. If, at a subsequent point of time, any Memorandum or deed, mentioning the transaction is executed, it serves only as a device to instill conﬁdence to the parties. Its registration, or lack of it, would have absolutely no bearing on the transaction, since it has already come into existence.” Since the issue raised by the petitioner in this writ petition, is covered by the judgment, referred to above, and considering the fact that the Memorandum of Deposit of Title Deeds cannot be treated as a mortgage, the action of the 3rd respondent in demanding the petitioner to pay stamp duty on the Memorandum of Deposit of Title Deeds, executed by the petitioner in favour of respondent No.3, at the rate of 3% on the loan amount, under Section 35(b) of the Stamp Act, is illegal and arbitrary. Hence, the impugned Memo No. 2/08, dated nil, passed by the 3rd respondent demanding the petitioner to pay an amount of Rs.2,39,000/- is set aside. The 2nd respondent is directed to process the document presented by the petitioner that is pending by collecting stamp duty as per Article 7 of Schedule 1-A of the Indian Stamp Act, as amended by A.P. Stamp Act 19/2005 and registration fee as per G.O. Ms. No. 2045, Revenue (Registration) Department, dated 28.11.2005. Accordingly, the writ petition is allowed. No costs. ________________ N.V. RAMANA, J. Dated: 11th August, 2008 KSR [1] AIR 2007 AP 196