AGRICULTURAL AND INDUSTRIAL BANK LIMITED Vs. STATE

JUDGEMENT

(1.) THIS is an application pupating to be under section 45B of the Banking Companies Act for a decree for partition of the properties set out in the schedule to the application free from the objection of the respondents and separate possession of a 7/8th share thereof Applicants Nos. 1 to 3 to the sons of K. R. Shenoy, the first respondent. The fourth applicant is the mother of the latter. It is claimed that the applicants, along with the first respondent, formed members of a joint Hindu Family. On 21st August, 1941, K. R. Shenoy created a usufructuary mortgage over the two items of properties set out in the application, along with another item of favour of his uncle, Subbaraya Shenoy, for a sum of Rs. 18, 000 borrowed by him. A period of 20 years was fixed for redemption. On 5th July, 1943. Subbaraya gained his mortgage right to the third respondent the Agricultural and Industrial Bank Ltd., Coondapur, which shall hereafter be referred to as "the bank", and which is now under liquidation under orders of this court in O.P. No. 73 of 1953. On 3rd May, 1946, the mortgage, K. R. Shenoy, sold the equity of redemption in the two items mentioned in the application to his cousin, one Vithaldas. The bank assigned his rights under the mortgage to the second respondent, Security and Investment Corporation (India) Ltd., for a sum of Rs. 4, 000. The second respondent thereafter purchased the equity of redemption in the two items of properties from Vithaldas on 10th December, 1948. The result is that the second responded became the full owner of the properties. On 23rd December, 1948, the second respondent created mortgage by deposit of title deeds over the priorities in favour of the bank for securing a sum of Rs. 75, 000. The bank was ordered to be wound up on 6th April, 1953. At the instance of the official liquidator a preliminary and a final decree on the mortgage have been passed in application No. 2221 of 1956Thereupon the application filed the present application for partition claiming that they were entitled to a 7/8th shares in the two items of properties. In the affidavit in support of their claim the applicants stated that the properties were joint family properties in the hands of their grandfather and on his death his widow, the fourth applicant, became entitled to a half share therein, the other half vesting in the three applicants and the first respondent in equal shares. It was then stated that all the aforesaid transactions were not supported by consideration, necessity, etc., and could not therefore operate to create any valid security in the property or any interest in it in favour of the bank for more than 1/8th share of the first respondent. Certain other objections to the validity of the assignment created by the third respondent were also taken. It is clear from the affidavit that there are other items of properties in the family but the applicants purporting to apply under section 45B of the Banking Companies Act have applied to this court for a partition which in effect could only be a partial partition of the joint family priorities. They also raised the question as to the binding nature of the alienation made by the first respondent in favour of Subbaraya Shenoy and Vithaldas

(2.) THIS application is contested on behalf of the bank. For the present purpose it is unnecessary to refer to the objections raised by the official liquidator other than the one regarding the maintainability of the application

(3.) SECTION 45B States