SURJYA KUMAR NAIK Vs. BIJOY KUMAR HAZRA

JUDGEMENT

(1.) This is a mortgage suit against the first three defendants and the Official Assignee of Calcutta in respect of a mortgage dated April 20, 1934. The suit was instituted on August 6, 1935, and, the plaintiff had to join the Official Assignee M a defendant owing to the provisions of Order XXXIV, Rule 1 of the; Civil P. C., the first three defendants having been adjudicated insolvent on May 10, 1934.

(2.) The suit is undefended by the first three defendants, but the, Official Assignee has filed a written statement in which he denies the mortgage, and says that at the time when the mortgage suit was instituted, the defendants were insolvent and that this was not made in good faith or for valuable consideration, but was collusive and fraudulent and- he submits that it is void as against him.

(3.) The relevant dates are as follows: On April 13, 1934, the defendants told a number of their creditors that they were unable to meet their obligations until they had got in certain dues owing to them. On April 15, there was a larger meeting of the creditors at which the defendants stated that they were unable to pay their debts and made an offer of a composition. On the same day the defendants approached the plaintiff and asked for a loan of Rs. 4,000 saying that they were in urgent need of money for the purposes of their business and in order to meet their business dues. Between this date a April, 20 the plaintiff inspected the property offered as security and his attorney made the necessary enquiries and searches and found that the property was unencumbered and that a previous mortgage bad been paid off. The plaintiff having agreed to lend the money, the mortgage deed was executed on April 20, and Rs. 4,000 in four currency notes of Rs. 1,000 each were paid to these defendants by the plaintiff's attorney. The petition upon which the defendants were adjudicated insolvents was dated April 27 and they were adjudicated on May 10. In December the Official Assignee wrote to the plaintiff asking for inspection of his mortgage deed, and this was sent to him and returned with a request that the plaintiff should apply to the Court for sale of the mortgage property by the Official Assignee. The plaintiff objected to a sale by the Official Assignee and nothing father was done until August 5, 1935, when an order was made under Section 36 of the Presidency Towns Insolvency Act for the examination of the plaintiff. On the next day the present suit was filed. A subsequent application was made for stay of the proceedings under Section 36, pending the hearing of this suit and a stay was granted.