1. Legal Framework

What are Security Documents?

• Original Title Deeds / Sale Deed chain
• Memorandum of Deposit of Title Deeds (MODT) / Equitable Mortgage Deed
• Registered Mortgage Deed u/s 59 Transfer of Property Act
• Hypothecation Agreement, Deed of Guarantee, Demand Promissory Note

Law:

• Sec 62 Evidence Act: Primary evidence means document itself produced for inspection.
• Sec 64: Documents must be proved by primary evidence except in cases under Sec 65
• Sec 65: Secondary evidence admissible only when:
  • (a) original in possession of adversary who fails to produce after notice u/s 66
  • (b) existence, condition proved and admission in writing
  • (c) original destroyed or lost - loss properly proved
  • (e) original public document - certified copy
  • (f) original document of which certified copy permitted by law
• Sec 91-92: When contract reduced to document, no oral evidence, must produce document.
• Order XI Rule 14 CPC + Sec 17 RDDB Act: DRT can direct bank to produce original title deeds to verify priority.

Effect of failure: If bank fails without explanation, court draws adverse inference u/s 114(g) Evidence Act and mortgage not proved. DRT holds "Bank failed to establish valid mortgage".

2. Case Laws on Failure / Loss

A. When Bank Loses Originals While in Custody - Secondary Evidence Allowed If Proved

Bangladesh High Court Division - Artha Rin Suit Judgment, 13 Nov 2025 (BD Law Post)
Held: "Attested copies of original documents lost while in the custody of the court are admissible as secondary evidence under Sections 63 and 65 of the Evidence Act; a borrower's admission of liability also dispenses with necessity of further proof. An Artha Rin suit cannot lawfully be dismissed merely because original documents submitted by a bank are subsequently lost while in custody of court."

Principle adopted in India too - loss in court custody does not penalize bank if secondary evidence and foundation laid.

National Consumer Disputes Redressal Commission - FIRST APPEAL NO. 871 OF 2015 - Dispute over lost title deeds deposited with Indian Bank - Judgment 2 Jan 2024

To secure loan, 12 title deeds deposited in 1967. In 1988 when complainant wanted inspection, documents missing from bank's strong room. Bank confirmed in 2000 originals cannot be traced. NCDRC held bank liable for deficiency - bank is bailee under Sec 148 Contract Act, duty to preserve and return after repayment. Ordered compensation.

This is reverse - failure to produce after closure = bank liable to return or pay damages.

Kerala High Court: Bank Cannot Retain Original Title Deeds After Closure - Justice Bechu Kurian Thomas

Held bank has no authority to retain original title deeds after closure. If originals not available, direction to release cannot be issued but bank liable.

Bombay High Court - Banks Responsible for Safeguarding Original Title Documents After Loan Repayment - Division Bench Acting CJ Ravindra V Ghuge

Held when borrower deposits valuable original title documents as security, bank has corresponding responsibility to preserve carefully and return once liability discharged. Failure = deficiency + must issue certificate and compensate for re-creation cost.

B. When Bank Fails to Prove Mortgage Due to Non-Production

Cosmos Co-op Bank Ltd vs Central Bank of India - Supreme Court Ruling on Priority of Mortgage [Mondaq Summary]

DRT held: "Central Bank of India had failed to establish a valid mortgage due to its failure to present the title deeds based on which loan was sanctioned or to present any registered title deed pertaining to Suit Flat."

SC held mortgage created merely by depositing unregistered Agreement of Sale does not create legal interest under Sec 54 TPA. Legal mortgage by deposit of original title deeds prevails.

If you fail to produce original title deeds - you fail to prove mortgage.

DRAT Kolkata - Appeal No. 131 of 2017 - Validity of mortgage created without deposit of title deeds

Held: Three requisites of equitable mortgage: (1) debt, (2) deposit of title deeds, (3) intention that deeds are security. Only first condition satisfied where sale deed not executed nor title deeds deposited. SARFAESI proceedings quashed. Appellant possessed original Deed of Conveyance 2004, bank could not show deposit.

Punjab and Sind Bank vs Recovery Officer II - Canara Bank vs M/s Gursewak Auto Centre - RC No. 922 of 2017

Recovery Officer directed Canara Bank and Punjab and Sind Bank to produce original title deeds and mortgage registers to verify priority. Banks filed objection. DRAT upheld direction - DRT is required to examine validity and legality of mortgage to ascertain action is proper.

Union Bank of India vs M/s Shars Dairy Pvt Ltd - DRAT Allahabad Bench - Cited in IBC Laws

"DRT is required to examine validity and legality of mortgage so as to ascertain that action taken by Bank is proper and legal" and held " Union Bank is not secured creditor, as the original title deeds are not available with it". No finding which documents were original - SARFAESI action invalid.

C. Secondary Evidence Must Have Foundation

Syndicate Bank vs Modern Tile and Clay Works, Kerala High Court, 3 June 1980

Court held equitable mortgages validly created through deposit of original title deeds at Bank's Calicut branch. Defendants argued deposit not at notified place. Court rejected - deposit of originals proved by bank's register and memorandum. Emphasis: Originals must be shown to be deposited.

Kanigalla Prakasa Rao vs Nanduri Ramakrishna Rao, Andhra High Court 18 Nov 1981 + Jessie Moyle Stewart vs Bank of Upper India Ltd, AIR 1916 Lah 39

Submission that valid equitable mortgage can never be made without delivering original title deed rejected. Attested copies delivered can create mortgage if intention proved, but stronger proof required. If originals lost, certified copies may be accepted only if loss proved and deposit with intention proved.

Sec 65(c) Jurisprudence - Punjab & Haryana High Court - S. 65, 91, 92 CPC Suit

Held: Original registered mortgage deed not produced though stated to be in possession of defendants. Secondary evidence allowed only if loss properly proved under Sec 65(c) and foundation under Sec 63 laid. Bank must file affidavit of person who had custody, FIR, and show search.

Supreme Court - Marwari Kumhar vs Bhagwanpuri Guru Ganeshpuri - 2000 (5) Supreme 486 (cited in Property Documents Destroyed in Bank Fire case)

Sec 65(c) allows certified copies when originals destroyed or lost, but only if loss is properly proved. Courts dismissed secondary evidence bids stressing foundational evidence.

3. Practical Consequences in DRT / Civil Court

4. How Banks Can Cure

1. Issue notice u/s 66 Evidence Act to borrower if originals with borrower
2. File affidavit of loss + FIR + publication + search certificate of Sub-Registrar for certified copy
3. Produce Mortgage Register, Title Deed Movement Register, Board Resolution authorizing officer to receive deposit
4. If equitable mortgage, produce original MODT + letter of intent + bank's lien register
5. For public documents (registered mortgage deed) - get certified copy u/s 57 Registration Act and produce u/s 65(e) and Sec 77.