PRATAPSING MOHOLALBHAI SETH Vs. KESHAVLAL HARILAL SETALVAD

JUDGEMENT

(1.) THIS is an appeal from a judgment of the High Court at Bombay reversing the judgment of the Subordinate Judge at Ahmedabad who had given judgment for the plaintiffs. The suit was brought on a surety bond given by the defendants guaranteeing a loan on mortgage, which the plaintiffs had lent to one Desai Krishnalal Narsinhlal whose wife was a sister of the respondents. The defence was that the sureties had been released by the subsequent dealings between the creditors and the principal debtor. It appears that before the mortgage in question was executed the principal debtor, a pleader in Ahmedabad, had given mortgages over four different parts of his immoveable property to various creditors to secure loans which were then outstanding. The transaction with the creditors, who appear to be administrators of a charitable fund, was in the nature of a consolidation mortgage whereby Krishnalal was to borrow Rs. 1,25,000 which was to be applied in redeeming the four properties, the lenders to have a mortgage over the four properties. The mortgage deed, which is in Gujarati, is dated October 17, 1921. It is headed "Deed of mortgage with possession for Rs. 1,25,000 in respect of the property situate in North Dascroi. After stating the parties it proceeds : I (the mortgagor) give this in writing as follows : To wit :-I have taken (borrowed) Rs. 1,25,000 in words one lac and twenty-five thousand in full, in cash, of the Bombay currency, on personal security. Interest on the same is to accrue due at the rate of nine per cent, per annum-in all Rs. 11,250 in words eleven thousand two hundred and fifty rupees are to accrue due (thereon) for interest every year. I am to pay every year the said interest including (interest for) an intercalary month. In security for the moneys of this deed and the interest thereon (I mortgage the following property:-) Houses and Bungalow and land belonging to me by right of exclusive ownership and being in my possession, which are situate within the sim (limits) of the City of Ahmedabad and Madalpar or Chhadavad and Vadaj in Taluka and Sub-district North Dascroi, District Ahmedabad. The particulars thereof are as under.

(2.) THE document then proceeds to set out four properties : No. 1. Mortgaged to Jayantilal Motilal Co. for Rs. 30,000. No. 2. Mortgaged to Jayantilal Motilal Co. for Rs. 25,000. No. 3. Mortgaged to B. Maganbhai for Rs. 30,000. No. 4. Mortgaged to Sheth Jiwanlal Chunilal for Rs. 16,500.

(3.) THEN, after again setting out the particulars of the existing mortgages over the four properties the deed concludes : On the security of the aforesaid property Rs. 1,01,500 and the interest thereon are payable by me to the abovementioned persons. Therefore in order to enable you to pay off the said debt the amount of this deed (namely) Rs. 1,25,000 has been kept by me as Anamat (in deposit) with you. Therefore I am to get the said debt paid to them by you, to get the full satisfaction entered on the mortgage bonds relating to the said property and to obtain releases (reconveyances) according to law in respect of the said mortgage bonds and to hand over the same to you. Likewise I am to deliver to you the documents delivered by me to them as well as the documents that may be with me. And as to the surplus amount that may remain over, you are to hand over the same in cash to me. In this way Rs. 1,25,000 are to be made up and taken in full. And as regards the mortgage encumbrances that there are at present on the said property ; on the same being discharged with the moneys taken from you, the whole of the property mentioned in this deed will be deemed to be as in first mortgage for your amount. I have not in any manner given this property to any other person except as stated above, by a -writing, nor is the same subject to any claim or share on the part of any one nor is the same subject to a charge for moneys due.