N V VAIDYANATHA AYYAR Vs. INDIAN BANK LTD

JUDGEMENT

(1.) The properly which forms the subject-matter of these proceedings is a building on Macdpnald's Road, Tiruchirapalli, Cantonment. A limited liability company, called the Trichinopoly Automobiles Ltd., owned that building and was doing its business there. The Vasudeva Funds Ltd., a banking con cern in Tiruchirapalli, lent Rs. 50,000, to the Automobiles Ltd. The date when the loan was made was not mentioned to us; but it. must have been sometime prior to April 1948. In that month, the Indian Rank Ltd., lent a sum of Rs. 1,00,000 to the Automobiles Ltd., on the mortgage of this and other properties. The Indian Rank sued on the mortgage in its favour, and, on 12-12-1950, obtained a decree for Rs. 1,05,000, and odd. On 28-9-1951, the Vasudevai Funds obtained a decree for Rs. 49,000 and odd. Sometime before 2-12-1953 -here too the dale was not mentioned to us -the Indian Bank Ltd., filed an execution petition for the sale of the hypo-theca. While the execution petition was pending, the Vasudeva Funds brought the property to sale and at a court sale held on 2112- 1953 it purchased the property for Rs. 11,005. This purchase was of course, subject to the mortgage in favour of the Indian Bank. The sale of the property in execution of the decree which the Indian Bank had obtained was proclaimed for 24-2-1954. On that date, the Vasudeva Funds filed E. A. No. 360 of 1954 for adjournment of the sale by three months. But that application was dismissed. The property was then sold and purchased by Chellappa Chcttiar for Rs. 55,000. On 24-3-1954, the Vasudeva Funds filed E. A. No. 574 of 1954 for setting aside the sale on various grounds. At the same time, it filed E. A. No. 575 of 1954 praying that the personal security of the petitioner be accepted and the petition for setting aside the sale proceeded with. Both the applications were opposed. Over the date 26-3-1954, the following appears in the notes paper of E. A. No. 574 of 1950; "The petitioner prays to set aside the sale held on 24-2-1954 and posted for confirmation to 8th April 1954. Personal security offered. Notice 5th April 1951" This part of the note appears to be in the handwriting of an officer of the court and below that the initials of the Subordinate Judge appear. The notes paper shows that on 5-4-1954, - the notice ordered on 26-3-1954 having been given -counter was filed, and the petition was ordered to be taken up on 6-4-1954. On that date the petitioner was ordered to deposit cash or furnish security of im-moveable property by 10-4-1954. That day the judge was on leave and so the petition was adjourned to 12-4-1954. On that date the petition to set aside the sale was dismissed on the ground that security as ordered was not furnished.

(2.) Meantime, that is to say, on 26-3-1954, one Vaidyanatha lyer, a share-holder in the Trichinopoly Automobiles Ltd., filed E. A. No. 584 of 1954 to set aside the sale. Among others, he urged the ground that the Managing Agent of the Trichinopoly Automobiles Ltd., had been acting in fraud of the company and that Chellappa Chettiar the court auction purchaser, was his own nominee. At the same time, a separate application for accepting personal security was filed. On that, notice was ordered on 5-4-1954. On 5-4-1954, the petition was ordered to be called on 6-4-1954. The petition was then adjourned to 10-4-1954 and re- posted on that date to 12-4-1954. This petition too was dismissed on the ground that security, was not furnished as ordered.

(3.) Against the orders dismissing the two petitions the present appeals have been filed. C. M. A. No. 316 of 1954 has been filed by Vaidyanatha Iyer and C. M. A. No. 387 of 1954 by the Vasudeva Funds Ltd. The former may be first disposed of.