SEULI CHOUDHURY Vs. MAYDHA BAIJNATH

JUDGEMENT

(1.) This is an appeal against a judgment and the preliminary decree, passed by the learned Subordinate Judge, Ninth Court at Alipore in a mortgage Suit being Title Suit No. 99 of 1966 of that Court. The appellant is the defendant. No. 3 Seuli Choudhury. The plaintiff respondent, Maydha Rajnath lent and advanced to the defendant No. 1 Madhusudan Kundu and his alleged partners K. K. Wadia and F. R. Bhoori Rs. 25,000/- and 15,000/- on 1st of September, 1953 and 10th of September, 1953 respectively for the purpose of running their cinema business then casted on in a premises under the name and style of of 'Kartick Cinema' on their agreeing for creating a mortgage security in respect of the properties described in the schedule to the plaint. The mortgage deed was drawn up and the defendant No. 1, Madhusudan and his two other partners executed the said deed of 1.9.53. but failed to register the same. Then a dispute arose between the defendant No. 1 and his two partners Wadia and Bhoori. The defendant No. 1 filed a suit against Wadia and Bhoori in the Original Civil Jurisdiction of this Court claiming inter alia that the so-called partnership deed amongst them was void and inoperative. Wadia and Bhoori filed a counter suit for a declaration of their partnership with the defendant No. 1 Madhusudan and for dissolution of the said partnership. The suit was filed also in the Original Civil Jurisdiction of this Court. The suit of the defendant No. 1 Madhusudan was decreed and in that suit order was passed declaring the said deed of partnership void. In the suit of Wadia and Bhoori against the defendant No. 1 the High Court ordered on 13.1.55 that the defendant No. 1 that means Madhusudan alone would execute a mortgage in respect of the cinema premises now the subject matter of the mortgage suit in favour of the plaintiff respondent for securing the loan of Rs. 40,000/- advanced to the defendant No. 1 and his two other partners with interest at the rate other cent per annum until payment and all costs and charges and expenses of the plaintiff, the present respondent, in connection with the execution of that mortgage bond. Defendant No. 1 Madhusudan changed the name of the cinema from Kartick to Rukmini and the cinema now goes by the name of 'Rukmini Talkies'. The defendant No. 1 Madhusudan failed to execute the mortgage deed in favour of the plaintiff in terms of the order. The defendant No. 1 sold the cinema house with its equipments etc. subject to the charge in favour of the plaintiff for Rs. 40,000/- only with interest thereon, to the defendant No. Sm. Jyotsna Mallick. As the defendant No. 1 failed and neglected to execute the mortgage deed in favour of the plaintiff or to pay the dues of the plaintiff in spite of demands, the plaintiff filed a suit against the defendants Nos. 1 and 2 Madhusudan and Sm. Jyotsna Mallick in the Original Civil Jurisdiction of this High Court being Suit No. 1161 of 1958 for specific performance of the contract to execute the mortgage with a direction upon the defendant No. 2 to join in the said mortgage was required. The suit No. 1161 of 1958 was decreed against the defendant Nos. 1 and 2 Madhusudan and Sm. Jyotsna Mallick. Both of them failed and neglected to execute the mortgage deed in terms of the decree. The plaintiff-respondent in this appeal applied before the High Court for execution of the said decree for specific performance of the contract as against defendant Nos. 1 and 2. During the pendency of the said execution proceedings, the defendant No. 2 sold her right, title and interest in the cinema house with the equipments, being the property now under mortgage, to the defendant No. 3 Sm. Seuli Choudhury, the present appellant. The plaintiff respondent in the execution proceeding arising out of the decree in the suit No. 1161 of 1958 prayed for and obtained an order from the High Court on 16th March, 1965 being that the plaintiff would be at liberty to proceed against the defendant No. 3 also for oxecution of the mortgage deed pursuant to the decree dated 13th September, 1961 passed in the suit No. 1161 of 1958 in favour of the plaintiff. It was directed in the said order that in default of the defendant No. 2's and Nos. 3's executing the said mortgage deed, the Registrar of the Original Side of the High Court would execute the said mortgage deed and present the same for registration. The defendant Nos, 2 and 3 both failed to execute the mortgage bond. So the mortgage bond was executed by the defendant No. 1 personally and by Mr. Saral Kumar Banerjee, the then Registrar of the Original Side of the Calcutta High Court on behalf of the defendant Nos 2 and 3 jointly on 29th September, 1965 in favour of the plaintiff for a total sum of Rs. 40,000/- lent and advanced by the plaintiff together with Interest thereon from the respective dates of payment until satisfaction at the rate of 8 per cent per annum with such other costs and charges and expenses as set forth in the said deed : The mortgage decree in respect of the property is covered by the deed registered on the 30th September, 1965 : The amount dues, under the mortgage bond, on account of principal lent was at Rs. 40,000/- and interest upto the date of the said loan less the amount relinquished, was at Rs. 40.000/-; The plaintiff thus claimed on account of principal and interest Rs. 80,000/- due to the mortgage bond from the defendants, 1, 2 and 3 on the basis of the mortgage bond referred to above : He prayed for a preliminary mortgage decree for sale for the amount of the principal and interest at the mortgage rate upto the date of sale and further interest at the bond rate until realisation : The plaintiff further prayed that if within the period fixed by the preliminary decree the defendant failed to pay up the mortgage dues under the preliminary decree a final decree of mortgage for sale should be passed : The plaintiff further prayed that in case the sale of the mortgage property was found insufficient to pay the decretal dues and cost due to the plaintiff, the plaintiff should be given liberty to apply for a decree for the balance of the dues against the defendant personally :

(2.) The suit was contested by the defendant No. 3, the appellant Seuli Choudhri, she raised various contentions such as that the mortgage bond had not been legally executed and attested and no consideration passed as alleged in the bond : She denied the transactions of loans ay alleged in the plaint in between the plaintiff and defendant No, 1 and his partners and of the decree mentioned in the plaint: The decree obtained by the plaintiff in suit No. 1-1161 of 1958 was challenged by the defendant No. 3, the appellants as fraudulent and collusive : The defendant No, 3, further contended in the written statement that she was a bona fide purchaser for value without notice and that the decree in Suit No. 1161 of 1958 being in respect of a property lying and situated beyond the local limits of the jurisdiction of the Original Side of the Calcutta High Court as a nullity, and that the mortgage bond executed in pursuance of the decree in Suit No. 1161 of 1.955 was invalid and unenforceable : She denied in the written statement that she was served with any notice in the execution proceedings arising out of the decree in Suit No. 1161 of 1958 at any time previous to the suit since she had purchased the suit property from the defendant No. 2 by a sale deed dated 3rd October, 1961 : She further contended in the written statement that the order passed on 16th March, 1965 in suit Mo. 1161 of 1958 by the High Court was invalid and inoperative against the defendant No. 3 since it was passed without any notice to her : In that trend of contentions she asserted in the written statement that the mortgage bond executed on her behalf by the Registrar of the Original Side of the Court with the terms and covenants therein were not her terms and covenants, and as such, the mortgage bond and the transactions there under were not binding on her. She challenged the rate of interest as being excessive, harsh and unconscionable. She contended that as the plaintiff had no effective money lending licence under the provisions of the Bengal Money Lenders Act the suit could not have proceeded. She, therefore, prayed for dismissal of the suit with costs; The defendant No. 2 filed a separate written statement and raised several pleas in defence and prayed for dismissal of the suit, but ultimately did not appear to contest the suit. Only the defendant No. 3 contested the suit and the following issues were framed in the suit :-"1. Is the suit bad for non joinder of parties and cause of action ? 2. Is the alleged decree in Suit No. 1161 of 1958 collusive fraudulent and void and was it brought into being by the plaintiff, in collusion with defendant No. 17. 3. Is the alleged mortgage bond is (in ?) pursuance of the decree in Suit No. 1161 of 1958 invalid and unenforceable against this defendant, as alleged. 4. Is the plaintiff entitled to a preliminary decree for mortgage against this defendant No. 3 for the amount, claimed ? 5. To what relief if any, is the plaintiff entitled ? 6 Is the suit barred by limitation ? 7. Is the suit maintainable ? 8. Is the mortgage bond void.

(3.) On the issue No.1 the learned Subordinate Judge found in favour of the plaintiff ? Issues Nos. 2, 3, 6, 7 and 8 were taken up by the Judge for consideration all at a time : The learned Subordinate Judge held that the Suit No. 1161 of 1958 was not collusive and fraudulent and found that it was not brought into being by the plaintiff in collusion with the defendant No. 1. The mortgage bond (Ext. d) as held by the learned Subordinate Judge was a valid and enforceable document against the defendants and that it was not void as alleged : The learned Judge also hold that the suit was not barred by limitation. The learned Judge held that without any effective money lender's licence the suit could well proceed to the decree since the plaintiff was not carrying on a business of money lending within the meaning of the expression money lending business in Bengal Money Lenders Act. On issue Nos. 4 and 5 the learned Judge held that the plaintiff was entitled to a preliminary decree for mortgage against the defendants including the defendant No. 3 for the amount claimed. The learned Judge concluded that the plaintiff was entitled to the preliminary decree, as prayed for on the mortgage bond against the three defendants for the amount claimed and that the suit was maintainable against the three defendants since the mortgage bond was a valid document enforceable against all the three defendants :