JADU NATH Vs. JAGAT PRASANNA

JUDGEMENT

(1.) The father of the respondents Rai Bahadur Girija Prossono Mukherjee borrowed on 24th October 1916 from the appellants predecessors-in-title, Rai Bahadur Janaki Nath and Sita Nath Roy a sum of Rs. 3,15,000. To secure the sum of Rs. 3,00,000 he executed a mortgage bond (Ex. A) on that date in favour of the lenders. The mortgage comprised five items of property. Two of those were situate in Calcutta -- one in Masjidbari Street and the other in Elgin Road being premises No. 5 of that street, and the remaining three were mufassil properties. Interest stipulated for w.s at the rate of 7 per cent, per annum (compound) with quarterly rests. The due date for repayment was 24 October 1919. The remaining sum of Rs. 15,000 was secured by a deed of further charge (Ex. B) executed on the same date which secured the self same properties. The stipulation for interest was the same as in the mortgage bond, but the due date of repayment was 24 October 1917.

(2.) The mortgagor, Girija Prossona, died in June 1918. On his death his estate devolved upon his sons, Jagat Prossono and Sailaja Prossono who, being wards of Court are the respondents to the appeal represented by the Manager, Court of Wards, Gobordanga estate. One of the mortgagees, Sita Nath, died in April 1920, and his two sons, Jadu Nath and Priya Nath, along with the heirs of the other mortgagee, Raja Janaki Nath who died shortly before the commencement of these proceedings in the Court below, are the appellants. In consideration of the mortgagees giving them time to repay the loan Jagat Prossono and Sailaja Prossono executed a registered agreement in favour of the former on 2 July, 1920 (Ex. C) by which they covenanted to repay the mortgage money and the money secured by the deed of further charge at an enhanced rate of interest (7 3/4 per cent, compound, with quarterly rests) the mortgagees undertaking not to call in their dues before 31 December 1921. By a further registered instrument (Ex. D) they agreed to pay the dues of the lenders at a further enhanced rate of interest, 10 per cent., compound, with quarterly rests in consideration of the lenders undertaking not to call in their dues before 31 May 1923.

(3.) On 4 July 1923, Jagat Prossono and Sailaja Prossono were declared disqualified proprietors by a notification issued under the Bengal Court of Wards Act and the Court of Wards assumed management of their estate. By a verbal agreement between the lenders and the manager, Court of Wards, dated 18 May 1924, the lenders agreed to reduce the rate of interest from 10 per cent, as provided for in Ex. D to 8 per cent. Before 25 February 1928 the mortgaged property situate in Masjidbari Street in the town of Calcutta was sold by the mortgagors with the concurrence of the mortgagees who released their security on it. This follows from the recitals of Ex. F, a registered instrument executed by the parties on 25th February 1928. This is an important document in the case. On that date the mortgagors sold to the mortgagees for a sum of Rs. 1,17,000 premises No. 5, Elgin Road. Out of this sum Rs. 27,000 was paid by the mortgagee purchasers to the mortgagor vendors in cash and the balance, Rs. 90,000 was applied by the former in reduction of their claims under the mortgage bond and the deed of further charge. By this all their dues on the deed of further charge and all the arrears of interest due on the mortgage up to that date were wiped off.