Mortgage by deposit of title deeds whether requires compulsory registration?

When borrower and the creditor choose to reduce a contract in writing as the sole evidence of terms between them, It since becoming integral part of the transaction, shall require registration under Section 17 of the Registration Act.

The above discussion came up in the wake of question as to whether ‘charge’ of mortgage can be entered in the revenue record in respect of a mortgage effected by deposit of title-deeds without its registration and payment of registration fee and stamp duty?

In the case of mortgage by deposit of title-deeds the immovable property is handed to the creditor by the borrower and documents stands as security. Entire transaction may be recorded in a memorandum but such memorandum would not be construed as an instrument of mortgage but merely evidential and thus not requiring registration, unless the memorandum includes terms and conditions pertaining to deposit in the form of a document, creates right, liability or extinguishes, which will require registration under Section 17(1)(c) of the Registration Act. Thus what is to be understood is that a document merely recording a transaction which is already concluded and which does not create any rights and liabilities do not require registration.

As in the instant case, the original deeds were deposited with the bank, the charge of mortgage can be entered into revenue record in respect of mortgage by deposit of title deeds and for that, instrument of mortgage is not necessary. Since mortgage by deposit of title-deeds does not require registration, no payment towards registration fee and stamp duty is necessary.

State of Haryana & Ors. vs. Navir Singh and Anr.
(Delhi HC, 07.10.2013)