ABDUL RAHMAN KHAN Vs. MUFASSAL BANK LTD

JUDGEMENT

(1.) This appeal arises out of a suit brought by the plaintiff-respondent for the recovery of money due on a mortgage effected by Mt. Ulfat Bibi and Abdul Rahman Khan in favour of the Kayastha Trading and Banking Corporation Limited, Gorakhpur, on the 6 of March 1908. The Managing Director of the Corporation was one B. Ram Gharib Lal who on the 14 of March 1919, transferred the mortgagee rights held by the Corporation for consideration to Mazhar Husain Khan. Mazhar Husain Khan subsequently transferred the same for consideration to the plaintiff.

(2.) The main question for consideration in the case was whether B. Ram Gharib. Lal, the Managing Director of the Kayastha Trading and Banking Corporation Limited, had a right to transfer the said mortgage bond to Mazhar Husain,, and was the plaintiff, as a transferee from Mazhar Husain, entitled to sue for the recovery of the mortgage money, It appears that at or about the time when, the transfer was effected by the said Managing Director, the Kayastha Trading and Banking Corporation Limited was in an unsatisfactory financial position and the creditors of the Corporation were pressing it for the payment of their moneys. B. Ram Gharib Lal, the Managing Director of the Corporation, thereupon assigned various outstandings due to the Corporation to some of the creditors in lieu of the moneys due to them by the Corporation, and these transfers, or at least some of them, are said to have been subsequently ratified either by the Corporation or, in certain instances by the Official Liquidator who was subsequently appointed by this Court.

(3.) Neither party produced the Articles of Association of the Corporation in this case though time was taken for their production by the mortgagors or their representatives in interest. The trial Court found that the Managing Director had no authority to make the transfer, but the lower appellate Court held that the Kayastha Trading and Banking Corporation Limited never seriously supported the objection that their Manager and Secretary was not entitled to transfer the deed, and that in view of Section 114 of the Indian Evidence Act it should be presumed that he was duly empowered to do the same. It is admitted that after the institution of the present suit, to which the Kayastha Trading and Backing Corporation was made a party as a pro forma defendant, a suit was filed by the Kayastha Trading and Banking Corporation Limited itself for the recovery of the money due on their mortgage, hut by virtue of a compromise subsequently entered into between the Kayastha Trading and Banking Corporation Limited and the present plaintiff that suit was withdrawn on the 20 of August 1921. Before that the name of the Kayastha Trading and Banking Corporation Limited had already been removed from the present suit which was allowed to proceed.