BANK OF BARODA Vs. PANDURANG BALASAHEB NALAVADE

JUDGEMENT

(1.) THIS is plaintiffs appeal taking exception to the dismissal of the greater part of its claim on the foot of a loan advanced to defendant No. 1 for the benefit of the joint family headed by him and including defendants Nos. 4 and 5, as also, his guarantors the 2nd and 3rd defendants.

(2.) DEFENDANT Nos. 1, 4 and 5 constituted a joint Hindu family, defendant No. 1 being the Karta thereof. The joint family was in need of money to repair an old well etc. etc. , and therefore applied for a loan to the plaintiff-Bank. A loan of Rs. 12,000/- was agreed to be advanced and to ensure the repayment of the loan, defendant No. 1 passed a promissory note on 17-6-1970 and a deed of mortgage on 16-6-1970. The agreed rate of interest was 4% over and above that fixed by the Reserve Bank of India from time to time, subject to a minimum of 9% per annum. Adjusting the repayments made, as on 31-3-1973 a sum of Rs. 15,488. 20 ps. was outstanding. This sum together with interest as from 1-4-1973 amounting to Rs. 38,447. 50 ps. making a total of Rs. 53,935. 70 ps. was claimed in the suit. Defendants contended that the claim was barred by time and that Ganpant Nalavade was a necessary party to the suit. Pleadings aforestated gave rise to the appropriate issues. The learned trial Court held that a mere sum of Rs. 15,488. 20 ps. was due from the defendants and that this amount be paid with proportionate costs and future interest at rate 6% per annum from the date of suit till realisation. It is the dismissal of the remaining part of the plaintiffs claim which has given rise to the present appeal.

(3.) THE learned trial Judge has committed a series of errors which has led to a faulty verdict. First, he has overlooked the fact that the suit was for recovery of money on the foot of a mortgage. True, there was a reference to the promissory note, but the plaintiff had also sought a decree for recovery of the amount due from the defendant by sale of the mortgaged property. According to the learned trial Judge, the mortgage deed executed on 16-6-1970 was void as being without consideration. This is a surprising conclusion. The mere fact that the money promised to defendant No. 1 started being withdrawn as from 17-6-1970, would not make the mortgage deed executed a day earlier, void for want of consideration. Section 2 (d), (e) and (f) of the Indian Contract Act, 1872 lay down as follows :