BHABANI PROSAD GHOSH Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) This appeal arises out of judgment and decree dated 20/02/1980 passed by the learned subordinate Judge, 7th Court, Alipore in Title Suit No. 18 of 1970.

(2.) The plaintiff bank filed the Title Suit No. 18 of 1970 claiming (a) a decree for Rs. 4,43,734.95 p. (b) a declaration that premises No. 12/2B, Circular Garden Reach Road, Calcutta and 1A, Harisabha Street, Calcutta are charged with a first and paramount charge in favour of the plaintiff for repayment of plaintiff's dues : (c) a decree for sale of the immovable properties mentioned in prayer (b) above with liberty to the plaintiff to appropriate the sale proceedings in protanto satisfaction of its claim in the suit and. for interest and other reliefs.

(3.) Plaintiff's case in short is that defendants 1, 2 and 3 were Directors of the Bango Steel Furniture Co. Private Limited carrying on business at No. 57, Diamond Harbour Road, Calcutta, for short the Company. The Company was a customer of the plaintiff Bank and had a current deposit account and the Company had overdraft facilities and other arrangements for financial accommodation with the Bank. The Company had a Block Account, a Supply Bills Account No. 2 and Goods Account No. 3 with the Bank. The advances to the Company in the accounts aforesaid were made against the security inter alia of hypothecation of all raw materials, stock-in-trade of finished goods and work progress and also all sorts of machineries, tools, furnitures, fixtures, motor car etc. The respective limits of the said Block Account, Supply Bills Account No. 2 and Goods Account No. 3 were Rs. 2,45,000.00 and Rs. 2,00,000.00 and Rs. 3,60,000.00 in or about 16/06/1966. In respect of the accounts Nos. 2 and 3 all the 3 defendants and the Company duly executed from time to time diverse sets of documents, each set consisting of the following - (a) letter of hypothecation, hypothecating all raw material, stock-in-trade of finished goods and works in progress at No. 57, Diamond Harbour Road, Calcutta : (b) letter of continuity. In addition, all the 3 defendants and the company executed from time to time demand promissory notes for the cash credit/overdraft limit then existing in respect of account Nos. 2 and 3 and also executed letters of co-obligation. Pursuant to and in terms of the agreement between the plaintiff and the defendants and the Company, account Nos. 2 and 3 were duly operated. upon by the Company and the plaintiff duly maintained mutual, open, current and continuous accounts of the dealings and transactions according to the English Calendar year. The Block Account was declared by hypothecation of all tangible movable properties such as products, stocks-in-trade and goods of the defendants' Company also comprising of all sorts of machinery, tools, furnitures etc. In consideration of the Bank making advances and/or giving facilities to the Company, defendants 1 and 2. On or about 17/06/1966 deposited with the Bank the following documents of title :- (1) a security deed dated 19/06/1931 between Ratneswar Ghosh since deceased (the father of the Improvement Trust); (2) a deed of partition dated 3/05/1942 between Ratneswar Ghosh and Sm. Anupama Ghosh, Sukumar Ghosh and Sudhir Ghosh (the last two being minors represented by their mother Sm. Anupama Ghosh) whereunder the southern portion of Plot No. 25, Scheme-XVI was given to Ratneswar Ghosh and northern portion was given to the other parties; (3) a deed of gift dated 5/03/1965 whereby the Donor Ratneswar Ghosh made a gift of the premises No. 12/2B, Circular Garden Reach Road, Calcutta and 1A, Harisabha Street, Calcutta to his sons defendants Nos. 1 and 2 in consideration of natural love and affection; (4) a deed of reconveyance dated 19/04/1966 between Gobordhan Das and defendant No. 1; and (5) Municipal Rate Bills evidencing payment of Municipal Bills. Thereafter defendants 1 and 2 deposited with the plaintiff and/or its agents duly authorised in that behalf deed of re-conveyance from one C. C. Saha and another deed of re-conveyance from one A. C. Koondu. On/or about 31/12/1968 there became due and owing by the Company to the Bank a total sum of Rs. 3,99,005.95 p. inclusive of interest up to 31/12/1968. This amount was arrived at after giving credit to the Company for all sums paid by the Company and/or on its behalf and after appropriating the items of credit to the items of debit in order of time in the said account Nos. 2 and 3. But the Company failed and neglected to pay the dues of the Bank and so the Bank in/or about the year 1969 filed a suit being Suit No. 1469 - the Central Bank of India Ltd. v. Bango Steel Furniture Co. Private Limited - in the Calcutta High Court in its original side. Upon an application made in the said suit, the High Court made an interim order whereby the Company was restrained by an injunction from selling any machinery except upon notice to the Bank. By the said interim order the Official Receiver of the High Court, Calcutta was also appointed Receiver over all the hypothecated movable properties of the Company including book debts and Bills. The said immovable properties were held by the Bank as security which was in addition to the securities furnished by the defendants 1 and 2 by the delivery of documents of title as mentioned above. The Receiver is still in possession of the hypothecated movable properties. On 24/05/1974 a decree was passed by the High Court in its original side in the aforesaid suit No. 1469 of 1969. The said decree is still unsatisfied. No payment was made by the Company to the plaintiff after filing of the said suit in the High Court and also after passing of the decree in the aforesaid suit. Nothing has been received by the Receiver out of the hypothecated movable properties. The total sum due by the Company to the plaintiff stood at Rs. 4,43,734.95 inclusive of interest up to 24/03/1970. Hence the plaintiff prayed for a decree for the aforesaid sum against the defendants including other reliefs already set forth at the outset.