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HIGH COURT OF CALCUTTA
P. B. Mukharji
SONAR BANGLA BANK LTD. - Appellant
Versus
CALCUTTA ENGINEERING COLLEGE - Respondent
Suit 706 Of 1957
Decided On : MAY 20, 1959
MORTGAGE - Suit for mortgage decree - Maintainability - Societies Registration Act, 1860 - Section 6 - Permissive and not mandatory - Leave to withdraw previous suit and institute fresh suit - Order 23 Rule 1 of the Civil Procedure Code - Authority of Principal and Secretary of Governing Body to execute mortgage - Rules and Regulations of the College - Acknowledgment of liability - Limitation - Bengal Money-lenders Act - Usurious Loans Act - Applicability - Mortgage decree.
Fact of the Case:
Sonar Bangla Bank Ltd. (in liquidation) filed a suit against Calcutta Engineering College, its Principal and Secretary, Kalikata Shilpa Vidyapith, and its Principal Secretary for a mortgage decree under Order 34, Rule 4 of the Code of Civil Procedure for the sum of Rs. 69,135-0-3. The mortgage was dated 15th March, 1945, and the parties to the mortgage were expressly said to be the Calcutta Engineering College as the mortgagor and the Sonar Bangla Bank Ltd. as the mortgagee.
Finding of the Court:
1. Section 6 of the Societies Registration Act is permissive and not mandatory. 2. Leave to withdraw a previous suit and institute a fresh suit is clearly recognized in Order 23 Rule 1 of the Civil Procedure Code. 3. The Principal and Secretary of the Governing Body of the Calcutta Engineering College had the authority to execute the mortgage on behalf of the College. 4. The acknowledgment of liability contained in the letter of 27th November, 1948, is valid. 5. The claim of the plaintiff on the mortgage is not barred by limitation. 6. The Bengal Money-lenders Act and the Usurious Loans Act do not apply to the loan in question.
Issues: 1. Is the suit maintainable under the Societies Registration Act? 2. Had the Court jurisdiction to grant leave on 2nd August, 1945? In any event can that question be agitated in this suit? 3. Was the suit No. 4440 of 1950 non est on the 2nd August, 1955? 4. Did the defendant No. 1 authorise defendant No. 2 to mortgage or to incur any debts on its behalf? 5. Did the defendant No. 1 or any of its authorised agent make any payment in respect of the accounts in suit? If so, were the same in the handwriting of any authorised agent of the defendant No. 1? 6. Was the defendant No. 2 authorised by defendant No. 1 to make any acknowledgment on behalf of the defendant No. 1? 7. Was the letter dated 27th November 1948 a valid acknowledgment of any and if so what debt? is the said letter binding on the defendant No. 1? 8. What were the terms and conditions of the loan and overdraft account? 9. To what principal and interest is the plaintiff entitled? 10. Can the loan or any part thereof be reopened under the Bengal Money Lenders Act and Usurious Loans Act? 11. Is any part of the plaintiffs claim barred by limitation? 12. Is the defendant No. 1 entitled to contest the suit in view of its admissions in the written statement about the College being taken over by the State of West Bengal and it having ceased to exist?
Ratio Decidendi: 1. Section 6 of the Societies Registration Act is permissive and not mandatory, and therefore, a suit against a registered society as such is competent. 2. Leave to withdraw a previous suit and institute a fresh suit is clearly recognized in Order 23 Rule 1 of the Civil Procedure Code, and therefore, the order granting such leave is valid. 3. The Principal and Secretary of the Governing Body of the Calcutta Engineering College had the authority to execute the mortgage on behalf of the College, as evidenced by the mortgage deed, the Memorandum of Association, and the Rules and Regulations of the College. 4. The acknowledgment of liability contained in the letter of 27th November, 1948, is valid, as it is signed by the Principal and Secretary of the Governing Body of the College. 5. The claim of the plaintiff on the mortgage is not barred by limitation, as the mortgage deed is dated 15th March, 1945, and the date of maturity is 1st December, 1946, and the suit was filed on 5th April, 1957, which is within the 12 year period under Article 132 of the Limitation Act. 6. The Bengal Money-lenders Act and the Usurious Loans Act do not apply to the loan in question, as the loan was advanced to a society registered under the Societies Registration Act, and the purpose of the loan was to meet the expenses of the construction of the structure of the Calcutta Engineering College.
Final Decision: The plaintiff is entitled to the usual mortgage decree as claimed under Order 84, Rule 4 for the sum of Rs. 69,135-0-3 up to the date of the institution of the suit to which will be added further interest at 12 per cent per annum as provided in the mortgage deed. The plaintiff is entitled to the costs of this suit.
( 1 ) THIS is a short liquidated claim in a banking company suit. It was instituted by the Sonar Bangla Bank Ltd. (in liquidation) through the Court Liquidator as the plaintiff. There are four defendants. The first defendant is the Calcutta Engineering College, a society registered under the Societies Registration Act. The second defendant is N. C. Chaudhuri, its Principal and Secretary of its governing body. The third defendant is Kalikata Shilpa Vidyapith, a society registered under the Societies Registration Act and having the same address as the first registered society defendant, namely, the Calcutta Engineering College. The fourth defendant is P. B. Ghose, the Principal Secretary of the Kalikata Shilpa Vidyapith, both for self as well as representing the said registered society.
( 2 ) IT is a simple suit on mortgage. The decree sought for is a mortgage decree under Order 34, Rule 4 of the Code of Civil Procedure for the sum of Rs. 69,135-0-3. The mortgage on which the suit is based is dated 15th March, 1945. The parties to the mortgage are expressly said to be the Calcutta Engineering College as the mortgagor and the Sonar Bangla Bank Ltd. as the mortgagee.
( 3 ) IT will be necessary to emphasise some of the features of the mortgage deed having regard to the issues raised in the suit. The mortgagor Calcutta Engineering College is expressly represented in the mortgage deed by "the Secretary of the Governing Body of the said College. " It also recites that the college was in urgent need for money for meeting the expenses of the construction of the structure of the Calcutta Engineering College. It also expressly recites that this Secretary is entrusted as the sole representative having power to borrow money from outsiders against mortgagee. " 'no evidence is given by the College to deny that it had any such need or that it built any structure or construction. The mortgage deed admits expressly that "the mortgagee advanced to the mortgagor various sums from time to time which amounted to a total sum of Rs. 35,000/- only, the receipt whereof the said mortgagor doth hereby acknowledge and admit. " It is signed by N. Chaudhuri as Secretary to the governing body of the Calcutta Engineering College. It is also executed by him as such.
( 4 ) OUT of these four defendants three of them being the second, third and the fourth defendants have not contested the suit at the trial. Among these three the second defendant Chaudhuri filed a written statement, but did not appear at the trial. The other two "defendants neither entered appearance nor appeared at the trial. The only defendant who appeared is the first defendant Calcutta Engineering College.
( 5 ) ON behalf of the first defendant a large number of issues was raised by its counsel. The issues raised by him and accepted by the learned counsel for the plaintiff are as follows:1. Is the suit maintainable under the Societies Registration Act? 2 (a) Had the Court jurisdiction to grant leave on 2nd August, 1945? In any event can that question be agitated in this suit? (b) Is the leave validly given? 3 (a) Was the suit No. 4440 of 1950 non est on the 2nd August, 1955? (b) Was the order, dated the 4th February. 1952 in suit No. 4440 of 1950 void and without Jurisdiction on the grounds pleaded in paragraph 10 (bj of the amended written statement? 4. Did the defendant No. 1 authorise defendant No. 2 to mortgage or to incur any debts on its behalf? 5. Did the defendant No. 1 or any of its authorised agent make any payment in respect of the accounts in suit? If so, were the same in the handwriting of any authorised agent of the defendant No. 1? 6. Was the defendant No. 2 authorised by defendant No. 1 to make any acknowledgment on behalf of the defendant No. 1? 7. Was the letter dated 27th November 1948 a valid acknowledgment of any and if so what debt? is the said letter binding on the defendant No. 1? 8 (a ). What were the terms and conditions of the loan and overdraf
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