UNITED INDUSTRIAL BANK LTD. Vs. BEPIN BEHARI MODAK

JUDGEMENT

(1.) This is an appeal against a judgment and decree dated March 30, 1961. The Plaintiff-Appellant's case in the plaint was as follows:

(2.) The Plaintiff is a banking company. Defendant No. 1, Bepin Behari Modak and Defendant No. 2 Ranjit Kumar Modak carried on at all material times a business in partnership under the name and style of East Bengal Society at room No. 9 in the premises No. 87/2, College Street, Calcutta. In March 1951, an account was opened with the Plaintiff bank by East Bengal Society. At that time the partners of that Society were Defendant Bepin Behari and one Rash Behari Modak, since deceased, who was the father of Defendant Ranjit. Immediately thereafter Rash Behari died and Ranjit became the partner of Bepin Behari in the said Society. The account that the Defendants No. 1 and 2 had with the Plaintiff bank was, inter alia, on the following terms and conditions:

(3.) The Plaintiff bank from time to time lent and advanced various sums of money to the Defendants in their said business in the said account. The Defendants also paid various sums of money in the said account in part payment of the amounts due to the Plaintiff bank. The Plaintiff bank used to collect various amounts at the direction and advice of the Defendants and appropriated them towards part satisfaction of their dues from the Defendants in the said account. As security for the due repayment of the loans and advances made by the Plaintiff bank, the Defendants executed two deeds of hypothecation on August 20, 1951 and September 3, 1951 respectively, whereby they hypothecated all their stocks of goods and merchandise which were stored or might be stored from time to time in the said Defendants' shop and godown at room No. 9, at 87/2, College Street, Calcutta. Alter appropriating all earlier items of credit towards earlier items of debits in order of time and giving credit for all amounts received from or realised on account of the said Defendants, there was a sum of Rs. 36,921 -8 as due to the Plaintiff bank from the Defendants Nos. 1 and 2 calculated upto June 30, 1955. The said Defendants failed and neglected to pay this amount inspite of demands. The Defendants Nos. 1 and 2 from time to time made acknowledgments of liability of the Plaintiff bank's dues in that account in writing. Such acknowledgments were made on January 9, 1954 and July 26, 1954. The Defendants Nos. 1 and 2 also made a promise in writing on June 26, 1954 to repay the dues of the Plaintiff bank by September 30, 1954. On or about May 21, 1955, the Certificate Officer, 24 -Parganas, caused all the goods of the Defendants Nos. 1 and 2 in their said business of East Bengal Society and stored in the said shop and godown to be attached in execution of a claim of the State of West Bengal on account of arrears of sales tax for the sum of Rs. 10,971 -5 -9 p. The goods were removed by the nazir of the Certificate Officer inspite of protests made on behalf of the Plaintiff bank. The Plaintiff bank contends that since all the goods had already been hypothecated to the Plaintiff by the Defendants Nos. 1 and 2 the State of West Bengal, i.e., the Defendant No. 4 had no right in priority to the claim of the Plaintiff bank in respect of the said hypothecated goods. The Plaintiff bank applied to the Defendant No. 3, the Certificate Officer of 24 -Parganas for withdrawing the attachment and for releasing the said goods. But this prayer of the Plaintiff bank was rejected by the Certificate Officer by an order dated June 16, 1955. At the time of filing of the suit the Defendant No. 3 was proceeding to carry out the sale of the attached goods. The Plaintiff bank contended that the Defendant No. 3 had no right to attach or sell the goods and further that the Defendant State of West Bengal was not in any event entitled to the proceeds of the said attached goods in priority to the claim of the Plaintiff bank. The Plaintiff bank also claimed to have suffered a loss because of the attachment and/or sale of the goods by the Defendant No. 3. The Plaintiff bank claims that amount from the Defendants Nos. 3 and 4 or in any event from the Defendant No. 4, i.e., the State of West Bengal. On these facts the Plaintiff bank has claimed a decree against Defendants Nos. 1 and 2 for Rs. 36,921 -8 as. and further interests; a declaration that all the goods, merchandise and movables belonging to the Defendants Nos. 1 and 2 in their business of East Bengal Society are charged for the payment of the Plaintiff bank's dues and that the Plaintiff bank was entitled to have its dues satisfied out of those goods in priority to any claim to the Defendant State of West Bengal. The Plaintiff bank also prays for the sale of the goods and appropriation of the net sale proceeds towards the Plaintiff bank's dues and alternatively "if any of the said goods were sold by the Certificate Officer, 24 -Parganas, decree for payment to the Plaintiff bank's dues out of the sale proceeds thereof in priority to the Defendant No. 4 the State of West Bengal." In the further alternative the Plaintiff has asked for a decree against Defendants Nos. 3 and 4 or against Defendant No. 4 for Rs. 36,928 -8 as. as damages.