ALI MUHAMMAD Versus Messrs WORLD WAYS TRAVEL Ltd.
ORDER
This suit has been filed for the recovery of Rs.28,45,766.16 by ways of preliminary decree against the three properties shown therein allegedly kept with the Plaintiffs by way of equitable mortgage for the payment of loan advanced to defendant No.1. It is alleged that certain loan was advanced by the plaintiff‑Bank to defendant No.1 which is a registered firm and as security for payment of the said loan defendants Nos.2, 3 and 7 are alleged to have created equitable mortgage on their properties specified in the plaint by deposit of title‑deeds.
2. It is contended by the learned counsel for the defendants that the defendants deny to have deposited title‑deeds for the purpose of creation of equitable mortgage. According to him, the creation of an equitable mortgage by deposit of title‑deeds requires three ingredients; (1) a debt, (2) deposit of title deeds, and (3) an intention that the deeds shall be security for the debt. Reference is made to the Mulla's Transfer of Property Ad, Pakistan Edition by Sari Muhammad Iqbal Khan Mokal, 1981 Edition. At page 537 it is observed that such an intention cannot be presumed from possession, for mere possession of the deeds is not enough without evidence as to the manner in which the possession originated so that a contract may be inferred. It is contended that even to prove the intention of creation of equitable mortgage, it is essential that the plaintiff should lead evidence.
3. Admittedly defendant No.2 is alleged to have created equitable mortgage on his property by deposit of Sale‑Agreement, but no memorandum of deposit of title deeds was signed by him. It is also admitted that prior to the institution of this suit, the defendant No.2 had sold away the plot and the purchaser of the said plot has not been made party to this suit. Mr.Sultan Allana learned counsel for the plaintiffs states that because of the sale they do not claim any relief against the property of defendant No.2,
4. Defendant No.3, who is a lady and Director of the Defendant No.1, is alleged to have deposited title‑deeds of property for the purpose of creation of equitable mortgage and is also alleged to have signed the memorandum of the deposit of the title‑deeds. It is contended by the learned counsel for the defendants that the deposit of the title‑deeds as well as signing of the memorandum of deposit of title‑deeds has taken place on the same day viz. 31‑10‑1983 and as such it will be considered as a contract of mortgage and such contract requires registration and is not admissible, as it is not registered. Reliance is placed on 1984 C L C 1046.
5. The Defendant No.7 is alleged to have filed photostat copy of the letter of KDA. transferring the plot in question and other documents, but he has not signed any memorandum of deposit of title‑deeds. No relief is sought against the principal debtor or against the other defendants except that in Para.(c) of the prayer clause, it is prayed that in case the proceeds of the sale are found to be insufficient for amount due on the decree, then a liberty be preferred to plaintiffs for personal decree against the defendant under Order XXXIV, Rule 6, C.P.C.. It is contended by the learned counsel for the Defendants that the permission contemplated under Order XXXIV, Rule 6, C.P.C. is only against the defendants whose property is mortgaged.
6. Reliance is also placed on 1986 C L C 1086 wherein a learned Single Judge of this Court has observed that where the only relief sought by the plaintiff is by sale of mortgaged property, unconditional leave to defend the suit will be granted to specified defendant.
7. The learned counsel for the plaintiffs has referred to certain admissions of defendant No.2 with regard to deposit of title‑deeds of his property with the plaintiffs. But as already pointed, in view of the changed circumstances, no relief is being sought against the property of defendant No.2,
8. In my opinion triable issues have been raised by the defendants as such leave to defend is granted. It appears that one defendant (Deft.No.2) has sold away the property alleged to have been mortgaged with the plaintiff. Under the circumstances the only condition imposed is that the defendants N053 and 7 are not to sell the property, which is alleged to have been mortgaged with the plaintiff till the decision of this case. All the applications stand disposed of accordingly.
H.B.T./B‑71/K Order accordingly.