Madras High Court affirms that deposit of title deeds operates as a valid mortgage under Section 58(f) of the Transfer of Property Act, subject to a 12-year limitation under Article 62 of the Limitation Act, 1963, and that acknowledgments extend limitation under Section 18; upholds existing precedent and is binding on subordinate courts in Tamil Nadu, with persuasive value elsewhere in secured-lending disputes.
Summary
| Category | Data |
|---|---|
| Case Name | CS/3/2021 of Suresh Kumar Vs Mumtaj Bheevi (DECEASED) – CNR HCMA010304892019 |
| Date of Registration | 05-01-2021 |
| Decision Date | 26-08-2025 |
| Disposal Nature | DECREED |
| Judgment Author | HONOURABLE MR. JUSTICE K. KUMARESH BABU |
| Court | Madras High Court |
| Bench | Single Judge |
| Precedent Value | Binding |
| Overrules / Affirms | Affirms existing precedents concerning deposit-of-title-deeds mortgages |
| Type of Law | Civil – mortgage and recovery |
| Questions of Law |
|
| Ratio Decidendi | The deposit of title deeds under a written agreement creates a mortgage charge under Section 58(f) of the Transfer of Property Act. A suit to enforce such a charge must be filed within 12 years under Article 62 of the Limitation Act, 1963, from the date the money becomes due. An acknowledgment of debt made within the limitation period further extends the period under Section 18 of the Limitation Act. Unrebutted documentary and oral evidence of the loan agreement, acknowledgment and deposit entitles the plaintiff to a preliminary decree and sale in default of repayment. |
| Judgments Relied Upon | A.S. Nos. 895 & 896 of 2010 (Division Bench, Madras HC); S.A. No. 284 of 2010; C.R.P. No. 3795 of 2018 (Single Judge, Madras HC) |
| Logic / Jurisprudence / Authorities Relied Upon | Section 58(f), Transfer of Property Act; Article 62 & Section 18, Limitation Act, 1963; Division Bench precedent on charges by deposit; admissibility of minimally stamped documents; unrebutted evidence presumption |
| Facts as Summarised by the Court | Plaintiff lent ₹50 lakhs to defendant on 01-03-2011, secured by deposit of title deeds by agreements dated 12-04-2011. Defendant defaulted, plaintiff issued legal notice (16-12-2017), defendant acknowledged liability and agreed sale (27-12-2017). Suit filed for recovery and sale; original defendant died; legal heirs impleaded but did not contest. |
| Citations | CNR HCMA010304892019; Reserved 05-08-2025; Pronounced 26-08-2025 |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts under Madras High Court |
| Persuasive For | Other High Courts dealing with secured-lending and mortgage disputes |
| Follows | A.S. Nos. 895 & 896 of 2010; S.A. No. 284 of 2010; C.R.P. No. 3795 of 2018 |
What’s New / What Lawyers Should Note
- Clarifies that deposit of title deeds under Section 58(f) TP Act unequivocally creates a charge enforceable by sale.
- Confirms a 12-year limitation under Article 62 of the Limitation Act for suits on such mortgages.
- Acknowledgment of debt within limitation extends the period under Section 18 of the Limitation Act.
- Affirms admissibility of documents stamped with even a one-rupee stamp to prove loan transactions.
- Reinforces that unrebutted oral and documentary evidence entitles the plaintiff to a preliminary decree.
Summary of Legal Reasoning
- The letter and agreement dated 12-04-2011 (Exs. P4, P8) proved deposit of title deeds, creating a charge under Section 58(f) TP Act.
- Article 62 Limitation Act prescribes 12 years from the date the loan becomes due; suit filed in 2021 is within period.
- Acknowledgment dated 27-12-2017 (Ex. P6), within limitation, extends period under Section 18 Limitation Act.
- Reliance on Single Judge precedents confirmed admissibility of minimally stamped documents for proving money transactions.
- Legal heirs did not contest; plaintiff’s unrebutted evidence entitled him to a preliminary decree with liberty to sell in default.
Arguments by the Parties
Petitioner (Plaintiff)
- Loan of ₹50 lakhs was advanced on 01-03-2011, secured by deposit of title deeds on 12-04-2011.
- Defendant acknowledged liability (Ex. P6) and undertook to sell property on default.
- Suit filed within limitation; documents and testimony unrebutted.
Respondents (Defendants / Legal Heirs)
- Transaction took place in 2011; suit filed in 2021 is barred by limitation.
- Only ₹2 lakhs borrowed in 2006, fully repaid with interest; loan agreement of 2011 and notice/reply forged on blank papers.
Factual Background
Plaintiff, a financier, advanced ₹50 lakhs to the defendant, owner of a 3.75-acre property at Maduravoyal, under agreements dated 12-04-2011, depositing title deeds as security. Upon default, plaintiff issued a legal notice dated 16-12-2017; defendant replied on 27-12-2017, acknowledging the debt and agreeing to pay or permit sale. No repayment followed. Suit was registered on 05-01-2021 for recovery of ₹1,21,25,000 (principal plus interest) and sale of the mortgaged property; original defendant died and legal heirs were impleaded but did not contest.
Statutory Analysis
- Section 58(f), Transfer of Property Act: Recognises deposit of title deeds as mortgage by way of charge.
- Article 62, Limitation Act, 1963: 12-year period for suits to enforce mortgage charges from the date money becomes due.
- Section 18, Limitation Act: Acknowledgments made in writing within limitation extend the period.
Alert Indicators
- ✔ Precedent Followed
Citations
- CNR HCMA010304892019, Madras High Court, Judgment dated 26-08-2025 (Reserve date 05-08-2025).