HARIDAS MUNDRA Vs. NATIONAL AND GRINDLAYS BANK LTD

JUDGEMENT

(1.) This is an appeal by the plaintiff from a decree dis-missing his suit, claiming a perpetual Injunction restraining the defendant banking company from selling the shares pledged by him with the defendant. The plaintiff had a current overdraft account with the defendant. To secure the overdraft, the plaintiff pledged divers shares with the defendant. The plaintiff executed a letter of lien dated April 27, 1955, empowering the defendant to sell and dispose of the shares on default of payment of the moneys due on demand. On July 1, 1959, the plaintiff was indebted to the defendant for the sum of Rs. 36,46,627-82 nP. On July 1, 1959 the defendant instituted suit No. 858 of 1959 against the plaintiff for the recovery of Its dues and obtained leave under Order 2 Rule 2 of the Code of Civil Procedure, 1908 to take appropriate proceedings in respect of the shares. We are informed that this suit has now been decreed in full. During the pendency of this suit, on February 6, 1960 the defendant served a notice on the plaintiff demanding payment of its dues and stating in default of payment on or before February 18, 1960 'the pledged shares or such of them as the defendant might decide to sell would be sold by the defendant i. exercise of its rights and powers as the pledgee and the nett proceeds would be applied in reduction of the plaintiff's indebtedness." On June 27, 1960, the plaintiff wrote to the defendant stating inter alia that in view of the pendency of the suit instituted by the defendant, the defendant had no right to sell or dispose of any of the shares. On June 29, 1960, the plaintiff instituted this suit claiming perpetual injunction restraining the deten-dant from selling the shares on the ground that in view of the institution of Suit No. 858 of 1959, the defendant had no longer any right to sell the shares. By a subse-quent amendment made on September 7, 1961, the plaintiff alleged that the notice dated February 6, 1960, was not a reasonable notice of the sale and/or was in contravention of Sec, 176 of the Indian Contract Act. There was also a prayer in the plaint asking for a decree directing the defendant to accept the bullion offered by the plaintiff in exchange of the shares. This prayer is no longer pressed. The plaintiff now presses his claim !ur perpetual injunction in terms of prayer (a) cf the plaint only. The learned trial Judge has dismissed the suit.

(2.) Mr. R. C. Deb appearing on behalf of the plain-tiff contends that upon the institution of suit No. 858 of 1959 the defendant has lost the right to sell the shares in exercise of its rights as a pawnee under Section 1/6 of the Indian Contract Act. The argument is that the right of the pawnee to sue upon the debt or the promise is alternative to his right to sell the pawn and that he cannot sell the pawn after he elects to sue on the debt or the promise.

(3.) In support of this argument, Mr. Deb relied upon the dicta in Nimchand Baboo v. Jagabundhu Ghosh, ILR 22 Cal 21 at 24, in Mahalinga Radar v. Ganapathi Subblen, ILR 27 Mad 528 at 531 and Co-operative Hindusthan uanK Ltd. v. Surendranath Dey, ILR 59 Cal 667 at 685: (AIR 1932 Cal 524 at 532) to the effect that under Section 176 of the Contract Act, the pawnee is entitled either to bring a suit against the pawnor upon the debt or promise retaining the pawn as collateral security or he may sell it upon giving reasonable notice of the sale and that the section gives him the right to sell only as an alternative to the right to have his remedy by suit. On the otner side reliance was placed on the dicta in Saiyid Ali Khan v. Debi Prasad, ILR 24 All 251 at 253 and Lala Jyoti Praliash Nandi v. Lala Mukti Prahash Nandi, 22 Cal WN 297 at 301: (AIR 1918 Cal 947 at 949), to the effect that the section gives the pawnee the right to bring a suit on the debt retaining the pawn as collateral security and also empowers him to sell it after giving reasonable notice and to recover the balance of the debt, if any, remaining after such sale and that the two rights are concurrent rights. In this connection reference was also made to the dicta in ILR 27 Mad 528 at 529-30, to the effect Wat in a case where both the right to sue for the sale ot the pledged property and the right to sue for a personal decree exist, they are concurrent rights. It is to be observed that in none of these cases the Courts were called upon to decide the question whether the right to sell the pawn is alternative to the right to sue on the debt ana whether upon the institution of a suit upon the debt the pawnee loses his right to sell the pawn on giving reasonable notice. We think that we are free to decide the point in issue on a consideration of the relevant sections of the Indian Contract Act.