BANK OF KHULNA LTD Vs. JYOTI PROKASH MITRA

JUDGEMENT

(1.) This is an appeal from a judgment and two decrees of the High Court of Judicature at Fort William in Bengal, dated 24 June 1936, which set aside a judgment and decree of the Subordinate Judge of Khulna dated 29 September 1984, and dismissed the appellant's mortgage suit. The present suit was instituted by the appellant on 31 March 1930, for recovery of the principal and interest due under a mortgage deed dated 18 March 1925, executed by Nirod Bashini Mitra, a Hindu married woman, Bhuban Mohan Mitra, her husband, and Jnan Prokas Mitra, her eldest son, for a loan of Rs. 28,000, on the security of certain agricultural lands and a dwelling house, all of which belonged to Nirod Bashini Mitra in her absolute title. The original defendants were Nirod Bashini Mitra as defendant 1, her husband as defendant 2, and her eldest son as defendant 3. Defendant 1 died on 18 March 1932, and defendant 2 died on 22 October, 1933. They left three sons; the eldest son was defendant 3, and he has not appeared in the suit. The second son, Jyoti Prokash Mitra, defendant 1, and respondent 1 in this appeal, is the main contesting defendant. The third son, Jasho Prokas Mitra, is now insolvent, and the Official Assignee of Bengal appears in his interest as respondent 2 in this appeal. It is unnecessary, for the purposes of this appeal, to refer to the delays and vicissitudes of procedure which took place prior to the trial of the suit in August 1934. The Subordinate Judge delivered judgment on 29 September 1934. He rejected the defendants' case as to fraud and undue influence, and other minor issues, and he held that Nirod Bashini was aware of the contract in the mortgage deed so far as it related to the agricultural lands, but that she was not so aware as to the inclusion of her house property, and that the deed was not explained to her; he therefore held that the deed was binding on her so far as it related to the agricultural property and granted a preliminary decree so limited on 29 September 1934, and a final decree was passed on 30 November 1934. From that decree the present respondent 1 appealed, and the present appellant also appealed.

(2.) On 24 June 1936, the High Court allowed the appeal of respondent 1 and dismissed the appeal of the appellant; they accordingly dismissed the suit. Hence the present appeal. The learned Judges agreed with the Subordinate Judge's findings of fact, and in particular that the deed had not been explained to Nirod Bashini, but they held that these findings must affect the deed as a whole, and the deed must be condemned as a whole. It appears that on 11 March 1925, Nirod Bashini signed a form of application for a loan of Rs. 28,000 from the Bank, to be secured on the agricultural properties in suit. It also appears that she required the money in order to send Rs. 5000 to her two younger sons in England without delay and to give assistance to her husband and her eldest son in regard to criminal proceedings in which they were then involved. The Bank obtained a report by two of its directors as to the value of the security offered, which they estimated at Rs. 48,000, and at a special meeting of the Bank on 17 March 1925 it was unanimously resolved that if her husband and eldest son joined in the mortgage bond and Nirod Bashini mortgaged the dwelling house of Khulna town along with the lands, the loan of Rs. 28,000 would be granted. It appears from the evidence that the husband and eldest son were present at this meeting and that they were told to go and inform Nirod Bashini of the Bank's proposal but there is no evidence that she was so informed. Apparently a draft of the mortgage deed on the basis of the Bank's terms was prepared that night, and on the following day, 18 March, a fair copy was made and was executed by Nirod Bashini, her husband and her son. In view of the findings of both Courts, their Lordships find it unnecessary to review the evidence in detail. After reference to the special meeting of the Bank at 5-30 P.M. on 17 March the Subordinate Judge says : Then the bond was written in 'Nirod Bashini's house on the same night by the cashier of the company, Babu Hem Chandra Mitter. He admits in answer to Court's question that he himself did not show the deed (bond) to Nirod Bashini after it had been written. Thus on 17 March (the date of the resolution) the proposal of the Company to include the house was not communicated to Nirod Bashini. As the bond was not shown after it was written she could not know that her residence was also being included in the bond. The draft of the bond is not forthcoming and this throws doubt whether the house was inserted in the draft.

(3.) The learned Judge declined to accept Hem Chandra's evidence that, at the time of execution on 18th March, the deed was read over to Nirod Bashini and that she nodded her head by way of consent, and he found that "the lady had no knowledge of the house property being included in the bond." He rightly comments on the fact that the Bank, in order to obtain a fifty per cent, margin of security on the loan of Rs. 28,000, included the lady's own dwelling house - worth Rs. 60,000 -in addition to the lands valued at Rs. 48,000, making a total value of Rs. 1,08,000. In their judgment the High Court state: As regards the events antecedent to the execution the evidence of Hem Chandra Mitra, such as it is, does not suggest that prior to the putting up of the deed for execution anybody on behalf of the Bank or anybody at all had apprised Nirod Bashini as to what would be the terms of the loan.Then there is the evidence relating to the execution. On this point the only evidence is that of Hem Chandra Mitra. He has said that he read over and explained the deed to the lady who was seated in an adjoining room ; that Nagendra Babu asked him to read it and explain it to the executants but did not name any particular person; that he read the deed paragraph by paragraph together with the schedule, and as he finished each and asked Nirod Bashini she nodded her head in token of having understood it. The learned Judge was not satisfied from certain answers that the witness gave that the witness had the capacity to appreciate and explain the deed ; but perhaps he judges the witness by too exacting a standard. But the learned Judge was also not satisfied with the demeanour of the witness, for in one part of the record he has put down a remark that the witness was concealing truth. He has observed in his judgment that the story of nodding is a fiction; and in the absence of more convincing evidence supporting the story we are unable to dissent from this conclusion. It may be observed that the deed was in English, and it is clear that the lady did not understand English, though it appears that she could "somehow sign her own name." The appellant attempted to evade the effect of these concurrent findings of fact by a series of contentions, with which their Lordships will proceed to deal, but it may he convenient, in the first place, to recall certain of the passages in the well-known judgment of this Board delivered by Lord Sumner in 52 IA 342 1at p. 350 : The real point is that the disposition made must be substantially understood and must really be the mental act, as its execution is the physical act, of the person who makes it. ... Again, the question arises how the state of the settlor's mind is to be proved. That the parties to prove it are the parties who set up the deed and rely on the deed is clear. They must satisfy the Court that the deed has been explained to and understood by the party thus under disability, either before execution, or after it under circumstances which establish adoption of it with full knowledge and comprehension.