INDIAN OVERSEAS BANK Vs. N A SELLAMUTHU

JUDGEMENT

(1.) THIS is an appeal by the plaintiff from the judgment of the learned II Additional Subordinate Judge of Salem in O. S. No. 8 of 1974.3

(2.) THE appellant instituted O. S. No. 8 of 1974 on the file of the Sub-Court, Salem, for recovery of a sum of Rs. 16,849 26 due under a mortgage by deposit of title deeds created by defendants 1 and 2 on 12th June, 1970, receiving a consideration of Rs. 12,000 repayable with interest at 4- per cent, over the Reserve Bank of India official rate with a minimum of 9- per cent, per annum with quarterly rests, every month, and in default, at the rate of the 12 per cent, per annum with quarterly rests.

(3.) THE question to be considered is whether the mortgage executed in favour of the third defendant should have priority over the mortgage in favour of the plaintiff. It is contended by the learned counsel for the third defendant-third respondent that under section 28 of the Tamil Nadu Co-operative Land Mortgage Banks Acts as amended by the Tamil Nadu Act XVII of 1968, to be referred to hereafter as the Act, the third defendant is entitled to such a priority. Section 28, subsection (2) of the Act reads as follows