A suit on a Hundi is maintainable even if the Plaintiff has not exhausted his security in the shape of a mortgage, where the Defendant chose to create an independent liability by entering into a separate transaction and executing a Hundi.

SUDHAMAY BASU, J.

( 1 ) THIS is a suit for leave under Order 2, Rule 2; a decree for Rupees 88,362. 50 interim and further interest and costs. The plaintiff's case, as a appears from the plaint, is that on or about the 7th of May, 1965 the plaintiff lent and advanced to the defendant No. 1 for the purpose of his business a sum of Rs. 75,000/- at 113a, Monohar-das Chowk, Calcutta, payable 60 days from the date. The defendant No. 1, Ram Kumar Agarwal, on the same day made and drew a Hundi in favour of the plaintiff upon the defendant No. 2 for the said sum payable 60 days from the said date. The defendant No. 2 duly accepted the same. To create a further security for the due payment of the said sum the defendant No. 1 deposited certain title deeds with the plaintiff. On maturity the Hundi was presented to the defendant No, 2 for payment but the same was dishonoured by non-payment to the knowledge of the defendant No. I. The plaintiff claims interest at the rate of 6 per cent, per annum from the 6th July, 1965 upto 24th June, 1968. The total claim amounting to RE. 88,362. 50.

( 2 ) WRITTEN statements were filed on behalf of both the defendants. The defendant No. I"s case is that the defendant had dealings and transactions with the plaintiff in course of which the total sum of Rs. 40,500/-was lent and advanced to the defendant against equitable mortgage of properties. The defendant gave some details of the money that had been lent and advanced to the defendant prior to the transaction of the suit. Several Hundis, according to the defendant No. 1, had teen executed. As to the transactions in suit the defendants stated that on or about the 7th of May, 1965 the plaintiff represented that interest at the rate of 40 per cent, was in arrears for tie earlier Hundis and at the time of execution of the Hundi in suit it was agreed by and between the plaintiff and the defendants that the plaintiff would first exhaust his remedies for the loan of Rs. 40,500/- by enforcing the mortgages. The defendant No. 1's case is that the said Hundi executed on the 7th May, 1965 is not enforceable. The plaintiff is to exhaust his remedies under the equitable mortgage. The acceptance of the Hundi by the defendant No. 2 is denied. The suit according to the defendant No. 1 was premature and the plaintiff had no cause of action against the defendants or any of them. It was further pleaded that this Court had no jurisdiction to entertain, try or determine the suit.

( 3 ) THE defendant No. 2, Sayeed Jabbar has stated inter alia, in the written statement that he has no knowledge of what amount if any that was lent or advanced by the plaintiff to the defendant No. 1. According to this defendant it is agreed by and between the plaintiff and the defendants that the defendant No. 1 would execute a proper mortgage deed of his properties which were situated at Calcutta and at Jalpaiguri and that the plaintiff agreed to grant the defendant No. 1 necessary time for execution of the mortgage if the laintiff's loan was secured by a Hundi to be accepted by the defendant No. 2 on the distinct understanding that the said Hundi would be treated as cancelled as soon as the defendant No. 1 executed the promised mortgage. The defendant No. 2 believed the said representation and thereupon accepted the Hundi which had no consideration. As the promised mortgage had been created the Hundi accepted by the defendant No. 2 was cancelled. The defendant No. 2 moreover denied that the Hundi was presented to him. The plaintiff, according to this defendant had no cause of action against him. The suit is alleged to be not maintainable.

( 4 ) ON the basis of the aforesaid pleadings the following issues were raised : (1) Did the plaintiff on the 7th of May, 1965 lend and advance to the defendant No. 1 a sum of Rs. 75,000/- as alleged in paragraph 1 of the plaint. (2) Was the Hindi executed by the defendant No. 2 under the circumstances mentioned in paragraph 2 of the written statement. (3)

Click Here to Read the rest of this document