KURUCHETI JANARDANAM Vs. MOTU INDUSTRIES PRIVATE LIMITED

JUDGEMENT

(1.) This is an appeal by defendants 12 and 13 from the decree and judgment of the District Court, East Godavari, at Rajahmundry, in O.S. No. 29 of 1964. The plaintiff filed the suit to recover a sum of Rs. 45,658 being the principal and interest due under a simple mortgage bond dated 5th April 1956 executed by defendants 1 to 3 in favour of the 14th defendant. The plaintiff is a transferee of the said mortgage from the 14th defendant.

(2.) The facts are not in dispute . Defendants 1 to 3 executed an agreement, Exhibit A-1, dated 11th August, 1955 in favour of the 14th defendant where-under they agreed to execute a mortgage of the properties mentioned in the agreement. A mortgage bond, Exhibit A-2, was executed by defendants 1 to 3 on 5th April, 1956 in favour of the 14th defendant which was subsequently compulsorily registered on 29th March, 1957. Defendants 1 to 3 are brothers and defendants 4 to 11 are their sons. They constitute a joint Hindu family doing business in bamboo etc. The self-same defendants 1 to 3 on 23rd September, 1952 i.e., about three years prior to the agreement in favour of the 14th defendant, executed an agreement, Exhibit B-8, in favour of defendants 12 and 13. At the time of Exhibit A-1, no mention whatsoever was made of Exhibit B-8. Exhibit B-8 inter alia stated that by 14th September, 1952 defendants 1 to 3 had owed to defendants 12 and 13 a sum of Rs. 28,191-1-3. The said agreement recited inter alia that defendants 12 and 13 had demanded and pressed defendants to pay a portion or whole of the money due to them or give security, failing which they threatened to file a suit. Hence the agreement was executed whereunder they said that the amount would be paid in ten or fifteen days and that in the interregnun they agreed to give as security certain properties described in the agreement and then execute a mortgage. We may straightaway mention that only some of the properties which are the subject matter of the mortgage under Exhibit A-2 were mentioned in Exhibit B-8, While so, defendants 12 and 13 filed O. S. No. 3 of 1953 before the Government Agent, Kakinada, against defendants 1 to 3. In the said suit, they relied on Exhibit B-8, the agreement in their favour. They prayed for a decree directing the defendants to pay them a sum of Rs. 29,842-14-3 with subsequent interest at the contract rate till payment and also by ordering that the said amount might be recovered by the plaintiff by sale of the schedule properties as a first charge. They also prayed alternatively for the execution of a mortgage bond for the full suit amount making the amount payable at once. That suit later on was re-numbered as O. S. No. 51 of 1954 on the file of the Court of the District Judge, Rajahmundry. On 22nd June, 1953 in O. S. No. 3 of 1953 on the file of the Government Agent, Kakinada, the 12th defendant had filed an Interlocutory application seeking to restrain defendants 1 to 3 from alienating their properties. On 22nd September, 1953 as per Exhibit B-15, a memorandum was filed by the Advocate for defendants 1 to 3 that they had not alienated any of their immovable properties in the plaint schedule and that they further undertook not to alienate them in future without the further orders of the Court. This undertaking was accepted by the Agent on the same day. Subsequently as evidenced by Exhibit 6-17 and B-18, on 4th December, 1953 defendants a and 3 have personally signed and filed into Court undertakings not to alienate the suit properties, pending further orders from the Court, and that they had not earlier alienated any of the properties mentioned in the plaint schedule. In spite of these undertakings, defendants 1 to 3 dishonestly entered info an agreement, Exhibit A-1, with the 14th defendant Exhibits A-3 and A-4 dated nth August, 1955, and 19th September, 1955 respectively would show that out of a consideration of Rs. 35,000, they had received from the 14th defendant about Rs. 28,000 and odd and the mortgage bond was executed on 5th April, 1956. In the meanwhile, the suit filed by defendants 12 and 13 on the file of the Agent to the Government, Kakinada, came to be transferred and was pending as O. S. No. 51 of 1954 on the file of the District Court, Rajahmundry. Defendants 12 and 13 having come to know of the mortgage deed, Exhibit A-2 dated 5th April, 1956 in favour of the 14th defendant had filed I. A. No. 526 of 1956 in O. S. No. 51 of 1954 seeking an injunction against defendants 1 to 3 restraining them from registering the mortgage, Exhibit A-2. To this application, the 14th defendant also was made a party. The learned District Judge by his order dated 16th November, 1956 dismissed the petition. The learned Judge observed that there were prima Jade grounds to issue a temporary injunction and thought that the balance of convenience lay in allowing the registration to take place, subject to such rights as the petitioners before him had in the property in dispute and without prejudice to their rights to raise any Contentions that they might urge against the transaction in favour of the mortgagee, the I4th defendant herein. It is thus manifest that the 14th defendant was aware of the claims of defendants 12 and 13 and an application also was filed to punish respondents, defendants 1 to 3, in O. S. No. 51 of 1954 for contempt, which it would appear was eventually dismissed. The suit, O. S. No. 51 of 1954 underwent several adjuournments and finally was compromised between defendants 12 and 13 on the one hand and defendants 1 to 3 on the other as evidenced by Exhibit A-37 dated 13th December, 1957. The mortgage, Exhibit A-2, was compulsorily registered earlier on 29th March, 1957. It is on this mortgage bond that the suit out of which this appeal arises was filed impleading defendants 1 to 3 their sons, defendants 4 to 11, defendants 12 and 13, the present appellants and the 14th defendant, the mortgagee under Exhibit A-2. The plaintiff obtained .a transfer of Exhibit A-2 as evidenced by Exhibit A-6 on 5th March, 1960.

(3.) Defendants 5 to 11, the sons of defendants 1 to 3, filed a written statement denying the mortgage and their liability thereunder.