DENA BANK Vs. BHIKHABHAI PRABHUDAS PAREKH AND CO

JUDGEMENT

(1.) This Appeal is preferred by the plaintiff against the Judgment and Decree dated 4th January, 1984, passed by the learned Prl. Civil Judge, Mangalore, in O.S.No.44 of 1972. The suit was for recovery of a sum of Rs.19,27,142-29 paise with future interest thereon at 101 /2 per cent per annum from the date of the suit and also for creating a charge of the decretal amount on the plaint B-Schedule properties free from the claim or objections of defendants 13 and 16 to 18. The plaintiff also further prayed for expenses incurred by it in respect of the mortgage security and for fixation of a date by the Court for payment of the decretal amount by the defendants and further in default of payment of the said sum, interest, costs, charges and expenses by a date to be fixed for redemption, to sell the suit schedule properties to recover the amount and, in the event the sale proceeds are found to be inadequate to discharge the decretal liability to recover the balance personally from defendants 2 to 7.

(2.) We may point out that Respondents 1 to 18 in this appeal were defendants 1 to 18 in the suit. Respondents 5 and 7, who were defendants 5 and 7 in the suit, died during the pendency of the suit. The legal representatives of Respondent-5 were brought on record. They are respondents 8 to 12. Respondent 8 is the wisdom of Respondent 5 and Respondent 9 to 12 are the children. Respondent-13 is the State. Respondents 14 & 15 are impleaded on the death of Respondent-7 in addition to R-2 to 4 & 6, as the legal representatives of Respondent-7. Respondents 16 to 18 who were defendants 16 to 18 in the suit have been impleaded because they are the tenants in possession of a part of the property over which equitable mortgage is created - in favour of the plaintiff-Bank. The State of Karnataka came to be impleaded because it tried to sell the mortgaged properties in recovery of the sales tax arrears due from the first defendant partnership firm. Thus the suit was one for recovery of money due under the equitable mortgage created by respondents 2 to 7 on 24-4-1969 in favour of the plaintiff- Bank as partners of the first respondent partnership firm. It is not necessary to summarise the pleadings of the parties because the same have been stated in detail in the judgment of the trial Court. Therefore, we do not consider it necessary to burden our Judgment with the summary of the pleading, as the relevant pleading will be referred to while dealing with the points arising in the Appeal. At this stage it is sufficient to state the issues as framed by the trial Court and the findings recorded thereon.

(3.) In the light of the pleadings of the parties the trial Court framed the following issues: 1) Whether there was any deposit title or the original documents, listed in Schedule-A of the plaint by defendant-7 on 23-4-1969 with intent to create any charge of equitable mortgage over the plaint B Schedule properties? 2) Whether the documents listed in plaint A-Schedule were handed over to the plaintiff for scrutiny of title in September 1967 in connection with the proposal of defendants 2 to 6 to sanction an overdraft facility of Rs.15 lakhs and whether there is no concluded contract for want of acceptance of the proposal? 3) Whether the documents listed in Schedule-A of the plaint are not the document of title of defendants 2 to 7 and whether their deposit cannot create an equitable mortgage? 4) Whether the 7th defendant's signature to the letter dated 24-4-1969 was obtained by misrepresentation, fraud and undue influence? 5) Whether the signature of defendants 2 to 6 to undated blank printed letter paper by duress as alleged? 6) Whether the alleged deposit of copies of documents create any charge or equitable mortgage and is supported by consideration? 7) Whether the alleged mortgage by deposit of title or alleged equitable mortgage in invalid for want of a power of alienation in favour of defendants 2 to 7? 8) Whether the assets of Devkaran Nanji Bank have become vested in the plaintiff including the alleged debts and securities if any which are the subject matter of the suit? 9) Whether the suit is filed by duly authorised attorney of the plaintiff? 10) How far the promissory notes and hupothecation deeds and letters of continuity and confirmation of defendants 1 to 6 referred to in the plaint bind the 7th defendant? 11) What is the correct amount due by defendants 1 to 6? 12) Whether the plaintiff is entitled to recover any amount from the defendants 1 to 7 personally and on the charge of the plaint B Schedule properties and their income? 13) Whether the plaintiff has given credit to all the realisation by the sale of supari? 14) Whether the interest claimed is excessive and the amount claimed is liable to be reduced? 15) Whether the plaintiff is entitled to any decree against the 7th defendant? 16) To what reliefs are the parties entitled? Additional issues framed on 5-8-1972 17) Whether defendants 1 to 6 are entitled for credit of any amount under E.C. and G.C. Policy as pleaded in para-l of the additional statement? 18) Whether the defendants 1 to 6 are entitled for the credit of any amount on Insurance Policy of hypothecation of goods as pleaded in para 4 of the additional written statement? 19) Whether defendants 1 to 6 are entitled for the credit of value of 10 bags of supari covered by the Burglry Policy and a sum of Rs.742.34 received by him by way of refund as contended in para 3 of the additional written statement? Additional issue No.20 framed on 17-1-1976 20) Whether the defendants are entitled to the benefits of Rs.10 lakhs received by the plaintiff-Bank from ECGC Corporation Ltd., and kept in the suspense account? Additional issues framed on 10-1-1978 21) Whether the defendants prove that the sum of Rs.10,00,000/- received by the plaintiff from ECGC Ltd., in October 1973 enures to the benefit of the defendants? 22) Whether the plaintiff has realised the value of 10 bags of supari and the value thereof has not been credited to the defendants account as contended by defendants 1 and 2? 23) Whether 1693 bags of supari was pledged or hypothecated by defendants 1 and 2 with the plaintiff bank? 24) Whether the same was lost by theft or mishandling by the employees of the plaintiff bank; if so, whether the plaintiff is liable to reimburse the same? Additional issues framed on 5-2-1981 25) Whether the defendants 16, 17 and 18 prove that the alleged leases in their favour are genuine, prudent and were executed in the ordinary course of management of the mortgaged properties? 26) Whether the sub-lease by the 16th defendant is valid and binding on the plaintiff? 27) Whether the leases in favour of defendants 16, 17 and 18 are hit by lies pendens? 28) Whether the leases are governed by the Karnataka Rent Control Act, 1961? 29) Whether the plaintiff is entitled to bring the properties to sale free from the objection of the defendants 16 to 18? Addl. issues framed on 20-11 -1982 30) Whether the attachment of the plaint 'B' schedule properties made by the 13th defendant for the arrears of sales tax is hit by lis pendens? 31) Whether the plaintiff is entitled to a decree against defendants 1 to 12 free from the 13th defendant's claim of sales tax, if any, against the said defendant? 32) Whether the 13th defendant proves that the arrears of sales tax and penalty due to it has got priority over the plaintiff's claim in this suit? 33) Whether the plaintiff further proves that since the 'B' schedule properties are the personal properties of the defendants 2 to 12, the 13th defendant cannot bring those properties to sale for the alleged arrears of sales tax due from the first defendant firm? 34) Whether the plaintiff proves that it issued a valid notice under Section 80 C.P.C. to the 13th defendant?