MANINDRA CHANDRA NANDY Vs. LALMOHUN ROY

JUDGEMENT

(1.) This was a suit by the trustees of a deed of arrangement for the benefit of the creditors which was executed by defendants 1 and 2 on 1 April 1921 and in connexion with which an agreement was executed one or two days before between certain creditors and the trustees. The proceedings began by way of originating summons taken out by the trustees of the deed against the debtors only. That originating summons was taken out in July 1921. By an order made in the matter, on 18 December 1924 the plaint presented together with the originating summons under the rules of the High Court as they stood before 1926 was directed to be treated as a, plaint in the ordinary sense. When that, action came on for disposal it was ordered on 9 July 1925 that it be adjourned to enable the plaintiff to implead various, mortgagees. Under this order the plaintiff impleaded first of all certain persons, who had mortgages upon the properties comprised in the deed of arrangement which were prior to the title granted to the trustees by the deed of arrangement. In addition to such mortgagees the present appellant, the Maharaja of Cossimbazar, who is a relative of the debtors was impleaded as a defendant by reason that on 10 December 1923 the debtors had executed in his favour a mortgage by which they purported to assign to him the properties which they had previously assigned to the trustees for creditors by the deed of 1 April 1921. The case was tried before my learned brother Pearson, J., and this is an appeal from his decree.

(2.) It appears that it was contended before the learned Judge, first, that the conveyance of the properties effected by the deed of trust of 1 April 1921 was invalid. In support of this contention various reasons were assigned. It was contended that the conveyance was fraudulent. It was contended that it was intended to be a conveyance for the benefit of certain creditors who had executed the agreement, and that some of these creditors not having executed or assented the conveyance never took effect. It was contended further that by reason of the fact of certain creditors haying sued or threatened to sue the debtors or in one case having taken payment contrary to the terms of the deed from the debtors the deed of trust was null and void.

(3.) The Maharaja -- the present appellant -- had a further contention which he submitted to the learned Judge. He said that at the time when the deed of trust was executed the trustees had not only permitted the debtors to remain in possession of the properties but had failed to take the precaution to get possession of the title-deeds. The question refers to properties not within the original jurisdiction of the High Court. It was said that the debtors never disclosed to the Maharaja the existence of the deed of trust for the benefit of creditors, that the Maharaja had no notice whatever of that deed, that he took on the faith of the fact that the debtors were in possession not only of the properties but of the title-deeds and that, therefore, in any case his claim under the mortgage could not be postponed in favour of the trustees under the deed of arrangement.