D C JOHAR AND SONS Vs. MATHEW

JUDGEMENT

(1.) The facts necessary for the decision of these appeals may be stated: Two brothers, Mathew and Kuruvilla, had an overdraft account with the South Indian Bank Limited; as security for the amount borrowed they created an equitable mortgage of their properties on 14-10-1950. The South Indian Bank sued for recovery of the amount due under the transaction in O.S. No. 39 of 1954 of the District Court of Anjikaimal which suit was later transferred to the Subordinate Judges court of Ernakulam where it was registered as O.S. No. 85 of 1958. Defendants 1 and 2 in that suit are Mathew and Kuruvilla and the 6th defendant is Johar & Sons, Ernakulam. The first defendant executed a mortgage on 18-1-1951 for Rs. 43,899-2-10 in favour of the Palai Central Bank Ltd. The Bank sued on the mortgage in O.S. No. 63 of 1953 of the District Court of Anjikaimal and the suit was later transferred to the Subordinate Judges court of Ernakulam where it was registered as O.S. No. 84 of 1958. Mathew and Kuruvilla are defendants 1 and 2 in that suit and Johar & Sons the 8th defendant. Johar & Sons happened to be impleaded in the two suits as assignee decree holder in O.S. No. 6 of 1123 of the District Court of Trichur and decree holder in O.S. No. 68 of 1952 of the District Court of Anjikaimal. These two were unsecured decrees obtained against Mathew. Items 1 and 2 of schedule A and items 1, 2, 3, 6, 7, 8, 10 & 11 of schedule B were attached in execution of O.S. No. 6 of 1123 on 3-4-1950 and one item had been sold in execution and purchased by the manager of Johar & Sons who deposited the sale amount. Johar and Sons had also applied for rateable distribution for the decree amount in O.S. No. 68 of 1952. The money realised in execution was not disbursed as Mathew had in the meanwhile applied for being adjudicated an insolvent in I.P. No. 13 of 1952 of the District Court and an interim receiver had been appointed in insolvency. Johar & Sons contended in the suits filed by the South Indian Bank and the Palai Central Bank that the respective mortgages on which the banks sued were void as the same were executed after the attachment of Mathews interest in the properties, in execution of the decree in O.S. No. 6 of 1123. Though O.S. No. 58 of 1952 was instituted after the dates of the two mortgages, Johar & Sons had a case that the mortgages were void in respect of the decree in that suit also as there was an application for rateable distribution in respect of that decree which thus became a claim enforceable under the attachment in O.S. No. 6 of 1123. The Palai Central Bank applied under O.21, R.89 of the Code of Civil Procedure for setting aside the sale in O.S No. 6 of 1123 and deposited the requisite amount under the rule. The sale was cancelled and Johar & Sons preferred a civil miscellaneous appeal in the High Court of Travancore - Cochin as CMA. No 146 of 1955. Ext. P. 16 is copy of the judgment of the High Court in the civil miscellaneous appeal. The order setting aside the sale was confirmed and certain directions were given for disbursement of the amount paid by the auction purchaser and the Palai Central Bank. It may also be mentioned that the Palai Central Bank claimed in their suit the amount so deposited for setting aside the sale. The contentions of Mathew and Kuruvilla who are defendants 1 & 2 in the two suits may now be referred to. Kuruvilla contended that he was only a surety and that his properties should be sold in the South Indian Banks case only after exhausting all remedies against the first defendant and his properties. The Palai Central Bank contended that the South Indian Bank should proceed against the second defendants properties in the first instance. Overruling the contentions of Johar & Sons, the two suits were decreed. The Palai Central Bank, the second mortgagee, was given a decree for the amount sued for and out of the amount decreed, Rs. 4,513-6-6 being the amount deposited for cancellation of the sale in O.S. No. 6 of 1123 and interest thereon was made a first charge on the first defendants share of the properties. The South Indian Bank was also given a decree as prayed for with the direction that the second defendants properties should be sold first. A.S. Nos. 8 & 10 have been preferred by Johar & Sons from the respective decrees in O.S. Nos.84 & 85 of 1953. A.S. No. 39 of 1959 is by the second defendant Kuruvilla against the direction in the decree in O.S. No. 85 of 1958 that his properties should be sold first. A.S. No. 419 of 1958 arises from an order dismissing the execution petition filed by Johar & Sons for execution of the decree in O. S. No. 68 of 1952 and directing them to proceed in insolvency as the judgment - debtor has been adjudicated an insolvent. All the appeals were heard together.

(2.) Kuruvilla, the appellant, who was the second defendant in O.S. No. 85 of 1958 has raised two points (1) that the court below should have directed the sale of the first defendants properties in the first instance and (2) that the direction in the decree to sell his properties first, is wrong.

(3.) As regards the first point his case is that he was only a surety for Mathew, the first defendant, and that the latters properties should be sold first. Defendants 1 & 2 are equally liable under the mortgage and the second defendant is not entitled to any special equity especially as that would be an unwarranted restriction on the right of the decree holder to proceed against any of the properties mortgaged.