Judgement

Law. Rep. 68 Ind. App. 144 ( 1940- 1941) Bhowanipur Banking Corpn. Ltd. v. Sreemati Durgesh

44

Appeal (No. 79 of 1939) from a decree of the High Court (June 6, 1938) which had reversed a decree of the Court of the Subordinate Judge, 24-Parganas (April 23, 1935).

The suit out of which this appeal arose was for the recovery of Rs. 63,236-10-3, being principal and interest due on a mortgage bond, dated June 27, 1925. The executant of the bond, the respondent, was the widow of one Kalidas Roy Chowdhury. The bond set out that Kalidas was indebted to the appellant bank in the sum of Rs. 1,78,965-4-7, that it was impossible for him to pay off the debt in full from his own resources, and that the mortgagor had determined to reduce her husbands debt as far as possible by borrowing money by mortgaging her own properties. By the document she borrowed Rs. 30,000 repayable with interest at the rate of nine per cent, per annum. The bond was registered.

The appellant bank instituted the present suit on December 19, 1933, claiming a decree for Rs. 63,236-10-3, with interest, future and pendente lite, and in default of payment a decree for sale. The defendant, in her written statement, alleged (inter alia) that the bank had brought a false criminal case against her husband and her eldest son, and that during the pendency of that case the bank undertook to withdraw it if she executed the mortgage bond in question, and that under the apprehension of her husband and son being sentenced to imprisonment, and not having had an opportunity of getting advice from a disinterested person, she executed the document in suit. She pleaded that the mortgage bond, having been executed with the object and consideration of getting the criminal case withdrawn, was illegal, inoperative and void in law.

The facts appear fully from the judgment of the Judicial Committee.

The Subordinate Judge decreed the suit for Rs. 60,000, with interest at the bond rate from the date of suit.

On appeal by the defendant the High Court (Nasim Ali and Henderson JJ.), in separate but concurring judgments, found that there was an agreement between the parties that the criminal case would be withdrawn if the dues to the appellant bank from Kalidas and his son were adjusted to the satisfaction of the appellant; that the object or purpose of the mortgage deed was the dropping of the criminal case ; that such object was illegal, and that the deed was therefore void. They accordingly passed a decree allowing the appeal and dismissing the suit.

1941. May 21, 22, 26. Sir Herbert Cunliffe K.C. and Wallach for the appellant bank. This was a simple suit on a mortgage bond, but when the defence appeared the whole character of the action was changed, the respondent alleging (inter alia) that the bank had brought a criminal charge against her husband and eldest son, but had promised to withdraw it if she (the respondent) would execute the mortgage in suit. She said, further, that the bank never gave, nor did she receive, any part of the consideration money alleged in the deed. That is a very sweeping case of fraud. It is submitted, first, that the High Court did not approach this case in the spirit in which a court should approach a charge of fraud, which must be clearly proved. The respondent, though a purdanashin lady, according to the evidence and the view of the Subordinate Judge, and the High Court do not appear to have disagreed, was an educated and intelligent woman, not without experience in business matters, and she had ample advice. The tests in Jones v. Merionethshire Permanent Benefit Building Society ([ 1891] 2 Ch. 587 ; [ 1892] 1 Ch. 173.) are to be applied in such a case as the present. In cases of this nature there must be sufficient evidence to justify the finding that the agreement said to be contrary to public policy, although not express—for it would seldom be in writing—must be implied in the circumstances. One must not be misled by mere elements of suspicion; it is