Govindji Popatlal v Premchand Raichand Limited [1963] 1 EA 69

Facts

In November, 1957, the respondent, a money-lender, made a loan of Shs. 60,000/- to the appellantwhich purported to be secured by an equitable deposit of title deeds on a certain plot, accompanied by a memorandum of equitable mortgage. Thememorandum was not registered, registration not being required under s. 59 of the Land TitlesOrdinance until it was amended retrospectively by s. 9 of the Land Titles (Amendment) Ordinance,1959, which came into force on January 1, 1961. Section 9 of the Land Titles (Amendment)Ordinance provides that the amendment to s. 59 shall be deemed to have come into operation on thedate upon which s. 59 came into force, namely, 1910. The respondent (who was the plaintiff in theSupreme Court) claimed payment of the said sum of Shs. 60,000/- with interest and obtained decreeon the footing that the equitable deposit of title deeds had created a valid security and that accordinglythe Money-lenders Ordinance, by virtue of s. 3 (1) (b) thereof, had no application to the transaction. Itappeared, however, that the attention of the Supreme Court had not been drawn to the retrospectiveeffect of the amendment to s. 59, and it was common ground that if the Money-lenders Ordinanceapplied to the transaction the claim must fail since certain provisions of the Ordinance had not beencomplied with. The defendant appealed to the Court of Appeal.

Held –

 (i) by virtue of s. 9 (2) of the Land Titles (Amendment) Ordinance, 1959, the amendment to s. 59of the Land Titles Ordinance must be deemed to have been operative at the time of the loantransaction and accordingly the memorandum of equitable mortgage was invalid for want of registration.

 (ii) by virtue of s. 59 of the Land Titles Ordinance (as so amended) the deposit of title deeds didnot effectually create a valid mortgage and the purported equitable mortgage therefore was notan effectual security “upon immovable property” for the purposes of s. 3 (1) (b) of theMoney-lenders Ordinance with the result that the loan transaction was not exempted from theoperation of the latter Ordinance by the provisions of s. 3 (1) (b) thereof.

Appeal allowed