SURENDRANATH GHOSH Vs. HARIDAS BISWAS

JUDGEMENT

(1.) This is a suit to realize mortgage securities. There are altogether five mortgages and two further charges involved in the suit. The mortgagor was one Haridas Biswas, who was originally defendant 1. He died on 5 January, 1932. On his death his infant sons were brought on the record and are now the first three defendants. The mortgage in favour of the plaintiff is dated 20 March 1927. All the other mortgages and further charges are subsequent in date to the mortgage of the plaintiff. Defendants 4 to 8 are the subsequent mortgagees. The mortgages have all been duly proved and in the normal course a mortgage decree in the usual form would follow.

(2.) A question of priority has however been raised by the defendant Durgacharan Mitra. This has led to some further evidence being given and considerable argument being advanced, in the course of which various cases have been cited. The mortgage in favour of the defendant Durgacharan Mitra was executed on (SI) June, 1927, and registered on the following day. There was a further charge in favour of the defendant Durgacharan Mitra on 6 August 1927, which was registered on 8 August 1927. The defendant Durgacharan Mitra has claimed that, though his mortgage and further charge are subsequent to the plaintiff's mortgage and the mortgage in favour of the defendant Kunjalal Datta, which was executed on 21 May 1927, Durgacharan Mitra should have priority over the mortgages of the plaintiff and the defendant Kunjalal Datta. The way this claim has been formulated is to be found in paras. 3 and 4 of Durgacharan Mitra's written statement. Though there was a suggestion of fraud made in para. 3 of the written statement, learned Counsel appealing on behalf of the defendant Durgachaian Mitra stated that he did not rely on any case of fraud. In para. 3 it has been alleged that, through the "gross neglect" of the plaintiff and the defendant Kunjalal Datta in not getting their respective mortgages registered until after the mortgage and further charge in favour of the defendant, Durgacharan Mitra, he was prevented from having any notice or knowledge of the prior mortgages and was induced bona fide to advance money to the mortgagor Haridas Biswas on the security of the mortgage and further charge. In para. 4, the claim has been put forward that the plaintiff and the defendant Kunjalal Datta are estopped from claiming priority in respect of their mortgages. In support of his case, the defendant Durgacharan Mitra has relied on the evidence of his solicitor, Babu Rajkumar Basu. The defendant Kunjalal Datta gave evidence on his own behalf. The plaintiff has not called any evidence.

(3.) Now, it is clear that the ease of "gross-neglect" made by the defendant Durgacharan Mitra is based simply on the fact that the mortgages in favour of the plaintiff and the defendant Kunjalal Datta had not been registered prior to the mortgage and further charge in his favour. The mortgage in favour of the plaintiff was presented for registration on 22 June, 1927, and was registered on 12 August 1927. The mortgage in favour of the defendant Kurjalal Datta was resented for registration on 21 September 1927, and was registered on. 20 January 1928. The delay in registration in both cases was undoubtedly due, to a great extent, to the default of the mortgagor, who in both casts had to be compelled to register the documents. Mr. P.C. Ghosh on behalf of the defendant Durgacharan Mitra has argued that there was a duty on the part of the prior mortgagees to register their mortgages within a reasonable time and he submitted that, by neglecting to register their mortgages prior to the date of his client's mortgage and further charge, they had held out that the properties were free from encumbrances, and so induced his client to advance the money. He contended that on general equitable principles and under Section 78, T.P. Act, his client was entitled to priority. The sole question therefore for determination by me as has been admitted by Mr. P.C. Ghosh, is whether the plaintiff and the defendant Kunjalal Datta, by not having their mortgages registered prior to the date of the mortgage and further charge of Mr. P.C. Ghosh's client, could be said to have been guilty of such "gross neglect" as would entitle the defendant Durgacharan. Mitra to claim that his mortgage should have priority over theirs.