LUXMI NARAYAN ARJUNDAS Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) This is an appeal by the defendants from the judgment and decree of the Court of the 3rd Additional Subordinate Judge at Purnea in Title Mortgage Suit 29 of 1957, whereby the suit of the plaintiff respondent for realisation of Rs. 65,555/3/9 has been decreed in full, and a preliminary mortgage decree has been passed.

(2.) The defendants were members of a joint Hindu Mitakshara family, of which the karta was Luxmi Narayan Changotia (defendant 2). The managing members of the business were also Ram Chandra Changotia (defendant 5) and Sheodayal Changotia (defendant 14). Defendant 2 died during the pendency of the appeal here, and his heirs have been substituted. They all caviled on their business under the name and style of M/s. Luxmi Narayan Arjundas (defendant 1) in village Banmankhi in the district of Purnea. They opened a cash credit account in the year 1948 with the Imperial Bank of India, which undertaking has been taken by the State Bank of India under the State Bank of India Act, 1955 (Act 23 of 1955) with all its assets, liabilities, etc. As the relevant transactions and facts took place and occurred when the bank was known as the Imperial Bank of India, for the sake of brevity, hereinafter in this iudg-ment, the reference to the plaintiff will be by the word 'Bank' only, which term, unless otherwise indicated in the context, will ordinarily and generally mean Imperial Bank and may mean the State Bank, as the suit has been instituted by the latter Bank. Since the argument in the appeal has been confined to two points only to be statrd hereafter, I shall state the relevant facts of this case only so far as they are necessary for the decision of the two points aforesaid.

(3.) After the opening of the cash credit account, there were several transactions between the defendants and the Bank in pursuance of eight written agreements executed by and on behalf of the defendants from the year 1948 to January, 1952, as detailed in paragraph 4 of the plaint. The Bank advanced money to the defendants against pledge of jute which was stored in the godown of the defendants situated near their residential house. There was a fall in the jute market in the year 1952 and the value of the pledged security became considerably low. Considerable amount was outstanding due from the defendants to the Bank, and when called upon by the Bank to cover the margin of the fall, the defendants failed to do so. They failed either to pay up the dues of the Bank or to cover the short fall in the value of the security. Hence, according to the case of the Bank, on or about the 14th January, 1953, the defendants created an equitable mortgage by delivering to the Bank in the town of Calcutta the documents of title of their immovable properties comprising their gaddi, residential houses and godown in Banmankhi Bazar and cultivable lands in Banmankhi and Rupouli which are fully described at the foot of the plaint. It may be made clear here that there are five lots of the property described at the foot of the plaint, out of which lots 1 and 2 are situated in village Banamnnkhi, lot 3 is described as situated in village Rashar and the properties described in lots 4 and 5 are situated in village Rupouli, It seems that village Rashar is either a suburb of Banmankhi Bazar or very near it, and that is the reason why all throughout properties of lots 1 to 3 have been described as Banmankbi properties and will be described as such hereinafter in my judgment, and the properties of lots 4 and 5 will be called Rupouli properties.