THE HON’BLE SRI JUSTICE V.V.S.RAO SECOND APPEAL No.908 OF 2011 Dated:17.10.2011 Between: Mutcherla Avinash and another .. Appellants And Palacherla Paparao and others .. Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO SECOND APPEAL No.908 OF 2011 JUDGMENT: The appellants are the defendants 4 and 5. They are the minor children of one Gopala Krishna, who is the son of Mutcherla Appayamma. The first respondent herein (hereafter, the plaintiff) instituted O.S.No.391 of 2004 on the file of the Court of the I Additional Senior Civil Judge, Kakinada, for recovery of a sum of Rs.2,05,902/- based on a promissory note, dated 01.05.1999, as well as mortgage by deposit of title deeds by the first defendant. The suit was dismissed on 12.02.2007. The trial Court disbelieved the version of the plaintiff holding that the suit promissory note is not supported by consideration and that the mortgage by deposit of title deeds without there being any memorandum in writing is unenforceable. The plaintiff’s appeal being A.S.No.132 of 2007 on the file of the Court of the IV Additional District Judge, Kakinada, was allowed on 21.10.2010, aggrieved by which the minor defendants 4 and 5 filed the instant Second Appeal. The plaintiff alleged that the first defendant (since deceased) borrowed Rs.1,25,000/- from him duly executing Ex.A1 - promissory note, dated 01.05.1999; the borrower also deposited Ex.A2 – sale deed, dated 11.05.1998 creating equitable mortgage in respect of land admeasuring Ac.1.00; other defendants are also aware of such creation of equitable mortgage and in spite of demands, the amounts were not paid necessitating the suit. The appellants herein filed written statement. They admitted that the first defendant borrowed Rs.80,000/- in 1998. They alleged that at that time, the plaintiff obtained thumb marks on seven empty promissory notes and suit promissory note is not supported by consideration. They contended that in the absence of registration equitable mortgage is not enforceable. The trial Court framed ten issues. During trial, the plaintiff examined two witnesses and marked Exs.A1 to A12. The defendants examined three witnesses and marked Exs.B1 to B4. The mother of the appellants gave evidence as D.W.1. After considering the evidence, the suit was dismissed by the trial Court. The appellate Court framed six points for consideration. The submission that Ex.A1 – promissory note was materially altered; that the suit promissory note is not supported by consideration and that there is no equitable mortgage, were rejected by the appellate Court. The counsel for the appellants would contend that in the absence of any memorandum of deposit of title deeds, the execution of equitable mortgage by the first defendant cannot be inferred. He would further contend that the appellate Court did not appreciate the evidence properly that the amount was borrowed by the defendants from Raja Laxmi Finance Limited, which was repaid and the suit promissory note is not supported by consideration. It is now well settled that even though the creation of equitable mortgage is generally evidence by memorandum, its absence itself cannot be the basis for rejecting the plea of the plaintiff that there is such a mortgage. It is also well settled that the mortgage by deposit of title deeds does not require registration (V.G.Rao v Andhra Bank[1] and United Bank of India v Lekharam and Co.,[2]). If the intention of the parties is clear and the title deed has come from the custody of the plaintiff, it is sufficient to infer creation of such mortgage. In this case, as a question of fact, the first appellate Court correctly appreciated the evidence and recorded such a finding, which cannot be interfered with in the Second Appeal. The next question is whether the amount borrowed by first defendant was paid by Raja Laxmi Finance Limited as evidenced by Exs.B1 to B3. D.W.1, who is the mother of the appellants, admitted that Exs.B2 to B4 do not mention that the amount is paid by the sixth defendant. In fact, D.W.3 admitted that the plaintiff has advanced the amount to first defendant on mortgage of landed property. This piece of evidence is clinching and would improbablise the case of the defendants. The findings recorded by the trial Court, therefore, cannot be faulted. The Second Appeal is accordingly dismissed. There shall be no order as to costs. ________________ (V.V.S. RAO, J) 17.10.2011 KH [1] AIR 1971 SC 1613 [2] AIR 1965 SC 1591