INDIAN OVERSEAS BANK Vs. N A SELLAMUTHU

JUDGEMENT

(1.) This is an appeal by the plaintiff from the judgment of the learned 11 Additional Subordinate Judge of Salem in O. S. No. 8 of 1974.

(2.) The appellant instituted O. S. No. 8 of 1974 on the file of the Sub-Court. Salem, for recovery of a sum of Rupees 16,849.26 due under a mortgage by deposit of title deeds created by defendants 1 and 2 on 12-6-1970, receiving a consideration of Rs. 12,000/-, repayable with interest at 41/2 per cent over the Reserve Bank of India official rate with a minimum of 91/2 per cent per annum with quarterly rests, every month and in default, at the rate of 12 per cent per annum with quarterly rests.

(3.) Respondents 1 and 2 herein, who were defendants 1 and 2, filed a memo on 30-9-1974 admitting the suit claim. The third defendant, who is the contesting respondent, is the Salem Co-operative Land Mortgage Bank, Ltd. in whose favour the second defendant executed A. registered mortgage deed in respect of one of the suit items,, namely S. No. 147/4C of Anupur Village, for a consideration of Rs. 9,500/- received as loan by him. The third respondent contended that by reason of the provisions of S. 28 of the Tamil Nadu Co-operative Land Mortgage Banks Act X of 1934 the claim of the plaintiff is enforceable only subject to the rights of the third respondent under the mortgage deed in favour of the latter, though the mortgage deed was executed by the second defendant after the mortgage in favour of the plaintiff. The contention was accepted by the learned Subordinate Judge and a preliminary decree was passed as prayed for with costs less Rs. 500/- paid on 22-2-1975 payable by defendants I and 2 subject to the priority rights of the third defendant secured by the mortgage deed under Exhibit B-9 in respect of the first item of the suit properties. Against this judgment and decree of the learned Subordinate Judge granting priority to the third defendant the plaintiff, who is a prior mortgagee, has preferred this appeal.