DHARANI MOHAN ROY Vs. PRAMATHA NATH ROY

JUDGEMENT

(1.) This appeal has merged out of a suit for enforcement of an equitable mortgage. The plaintiff Dharani Mohan Roy is the appellant. On 15 August 1919 plaintiff's adoptive mother purchased from defendant 2, Khitipati Roy, a property known as Ayma Roy Chak subject to an agreement that the price to be paid would be ascertained within a year, and on that basis executed a promissory note in favour of the latter for Rs. 50,000. On 27 August 1919, Khitipati borrowed from one Mohendra Nath Kundu a sum of Rs. 25,000 on executing a pro note for the amount and depositing certain securities and title deeds in respect of some properties amongst which were premises No. Section 25 and 26 Joy Kissen Street in Uttarpara in the District of Hooghly. These promises will hereafter be called the Uttarpara property. On 8 September 1919, Khitipati endorsed over the promissory note of 15 August 1919 in favour of Mohendra and Mohendra returned to him some of the securities which he had previously taken. In 1922 two suits were instituted on the Original Side of this Court. One was a suit by Mohendra against Kbitipati, and the plaintiff on the promissory note dated 27th August 1919, in which Mohendra prayed for a money decree against Khitipati reserving his right to enforce the security created by the deposit of the title deeds. Pending the suit Mohendra on 5 July 1923 executed a deed of assignment in favour of the plaintiff.

(2.) It is said that this assignment was in respect of the promissory note as well as the mortgage. On the strength of this assignment the plaintiff got himself transferred to the category of plaintiff in the aforesaid suit in the place of Mohendra and went on with the trial. Later on, on 19 July 1923, the plaintiff obtained a decree against Khitipati for Rs. 34 thousand odd. The other suit was by Khitipati against the plaintiff on the basis of the promissory note dated 15 August 1919. Pending the trial of this suit, the execution of the decree which the plaintiff had obtained against Khitipati as aforesaid was stayed. In this suit, as appears from para. 9 of the plaint in the present suit, the value of the property Ayma Roy Chak which the plaintiff's adoptive mother had purchased from Kitipati was found to be Rs. 23,800. This suit had not been finally disposed of at the date when the present suit was instituted and it has since then come to an end by a decree passed on 17 February 1930. On 11 July 1929 the plaintiff instituted the present suit. He based his claim under the assignment dated 5 July 1923 and prayed for a decree declaring him entitled to enforce the equitable mortgage in Mohendra's favour dated 27 August 1919, in respect of which he had become the assignee. He sought to enforce that mortgage against the properties amongst which were the Uttorpara properties, and he claimed that the said equitable mortgage should be enforced to the extent of the amount which would be found due to him under the decree he had obtained against Khitipati deducting therefrom the amount of the decree which Khitipati had obtained against him (vide, para. 9 of the plaint). Khitipati was impleaded as defendant 2 in this suit. Defendant 1 in the suit was Kumar Pramatha Nath Roy and he was impleaded as defendant for the following reason.

(3.) On 20 November 1926 and 17 December 1926, Khitipati and his son borrowed Rs. 2,300 and Rs. 1,200 from the Bengal Central Bank by depositing the title deeds of the Uttarpara property, the very same title deeds which had been deposited by Khitipati with Mohendra on 27 August 1919. On 17 December 1927, Khitipati in order to pay off the amounts due to the Bengal Central Bank on the loans aforesaid executed a simple mortgage bond in favour of defendant 1, Kumar Pramatha Nath Roy, and the title deeds of the Uttarpara property were produced and made over to the said defendant 1. On 18 July 1928, defendant 1 had instituted a suit on the said mortgage and on 27 September 1928 he had obtained a final decree thereon. It may be mentioned here that during the pendency of the present suit, the plaintiff obtained an injunction restraining the execution of the decree which defendant 1 had obtained as aforesaid. The contesting defendant in the suit was defendant 1. Various defences were taken on his behalf. Amongst them the one that was found in his favour was that his mortgage, though later in date, was to have priority over the equitable mortgage which the plaintiff sought to enforce. This defence having succeeded, a decree on that basis was made by the Court below and from that decree the plaintiff has preferred the present appeal. So far as the aforesaid defence is concerned, the Judge of the Court below has dealt with it on a view of the law which he has expressed in these words: The question of postponement raises the question as to whether Kumar Pramatha was induced to advance money to Khitipati on the security of the mortgage property due to gross neglect of Dharani Mohan Roy. This provision is made in Section 78, Transfer of Property Act; it is an exception to the general rule that a prior mortgage takes precedence over a later one. In this case we are not asked to decide if the other elements of fraud or mis-representations which are similar grounds for postponement do exist. The onus of the issue is on the defendant, who asserts the exception to the general rule. The question cf gross neglect is always treated as a question of fact; its determination must depend on the circumstances of each case. It is again conceded that a slight neglect or carelessness does not substitute the exception for the general law. As a matter of fact gross neglect must be found and proved.