BIJU PAUL Vs. NEDUNGADI BANK LTD

JUDGEMENT

(1.) THE plaintiffs, who had their suit dismissed by the lower court, are the appellants.

(2.) PLAINT item Nos.1 and 2 were obtained by the plaintiffs as per Exts.A1 and A2 dated 24.6.1993. The plaintiffs have ever been in possession and enjoyment of the property from the said date. The second defendant had availed of a loan of Rs.10,00,000/- from Federal Bank, Ernakulam after mortgaging the plaint schedule property in March, 1989. Defendants 2 and 3 executed a mortgage in favour of the said Bank. Since the debt remained undischarged, the Bank initiated proceedings and instituted O.S.231 of 1992 before the Sub Court, North Parur. In order to discharge the debt, defendants 2 and 3 approached the father of the first plaintiff and the plaintiffs had purchased the plaint schedule property. The amount due to the Bank was paid and the defendants had obtained the original assignment deeds namely, Exts. A3 and A3(a) which were handed over to the plaintiffs. After Exts.A1 and A2, the plaintiffs have effected considerable improvements in the plaint schedule property and they are residing in plaint item No.2 house. The plaintiffs became aware of the fact that defendants 2 and 3 had forged the documents and availed of a loan from the first defendant Bank by creating an equitable mortgage in respect of the suit property. The mortgage so created is invalid and is not binding on the plaintiffs. The first defendant Bank had instituted O.S.567 of 1992 to realise the amount from the second defendant. The second defendant entered appearance and filed a written statement admitting the claim. Hence the suit was decreed. The suit property lies within the jurisdiction of Sub Court, North Paravur and Sub Court, Ernakulam has no jurisdiction to pass any decree in respect of the property. Apart from the fact that a wrong court has passed the decree, the plaintiffs were not parties to the said suit. They therefore laid the suit for injunction restraining the plaintiffs from proceedings against the plaint schedule property and for declaration as against defendants 2 and 3.

(3.) DEFENDANTS 2 and 3 remained ex-parte. On the basis of the above pleadings, issues were raised by the trial court. The evidence consists of the testimony of P.Ws.1 and 2 and documents marked as Exts.A1 to A10 from the side of the plaintiffs. The defendants did not adduce any oral evidence but marked Exts.B1 to B5. The lower court on an evaluation of the evidence came to the conclusion that the document of title deposited by defendants 2 and 3 before the first defendant Bank is concocted and fabricated one. But the court went on to hold that encumbrance certificate and tax receipts deposited were sufficient to create an equitable mortgage and held that the mortgage created in favour of the first defendant is valid. Accordingly, the suit was dismissed.