BANK OF BARODA Vs. TIGER ELECT MOTORS COMPANY

JUDGEMENT

(1.) This appeal by the original plaintiff (Bank of Baroda) is directed against the judgment and decree which reads as under ;

(2.) Respondent-Defendant No. 1 is the principal debtor a Private Limited Co. Respondent No. 3 has been deleted. Respondents Nos. 2 4 and 5 are the Directors of the principal debtor Private Limited Co. and are also the guarantors. Respondent No. 2 seems to be a past director but he has also given a guarantee and that also continues. All the defendants have been held liable for the decretal amount. The suit was not a simple money suit. It was suit for recovery of monetary dues secured by mortgage of land factory and building as also hypothecation of raw materials semi-finished goods and finished goods and the other pledged goods and they have also been secured by necessary letters of continuing securities as well as personal guarantees by the other defendants. The contractual rate of interest was 14 1/2% compound interest with quarterly rests. The appellant-plaintiff prayed for a decree for sale of the mortgage property and hypothecated properties and to realise these dues. Thus the aforesaid suit was a mortgage suit. In such a suit decree for instalments could not have been passed.

(3.) The learned counsel for the appellant has drawn our attention to Division Bench judgment in the case of Bank of Baroda v. M/s. Manva Bone Mills and others 1983 (3) GLR 1025 (= 1983 GLH 603) wherein it has been held that the court has no power to grant any instalment while passing the preliminary decree in a suit in respect of equitable mortgage. Another Division Bench has also taken a similar view in the case of M/s jr. p. Steel lndustries v. State Bank of Saurashtra 1978 (19) GLR 998 wherein also it has been held that in case of decree to recover mortgage amount no instalment can be granted and this stands to reason because the mortgage security is taken with a view to secure full payment of the dues. It is only because that property has been given in security as mortgage that the amount has been advanced to a party and if that security is not allowed to be enforced the very purpose of taking the security is lost.