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HIGH COURT OF CALCUTTA
A. N. Ray
HONGKONG AND SHANGHAI BANKING CORPN. - Appellant
Versus
OFFICIAL ASSIGNEE OF CALCUTTA - Respondent
Suit 3583 Of 1954
Decided On : JUNE 5, 1958
JURISDICTION - MORTGAGE SUIT - CLAUSE 12 OF THE LETTERS PATENT - TWO SEPARATE MORTGAGES - CAUSES OF ACTION - SECTION 67A OF THE TRANSFER OF PROPERTY ACT - INTERPRETATION AND APPLICATION.
Fact of the Case:
Plaintiff, a mortgagee, filed a mortgage suit against the defendant, an insolvent, in the Calcutta High Court under Order 34 Rule 4 of the Code of Civil Procedure. The suit was instituted with leave under Clause 12 of the Letters Patent on the ground that part of the mortgaged land was within the jurisdiction of the court. The plaintiff claimed that the defendant carried on business in the sale, purchase, and export of goat skins and hides under the name and style of East Asiatic Trading Company and had a current overdraft account with the plaintiff. The overdraft account was secured by (a) pledge and/or hypothecation of all stocks of goat skins and hides of the defendant in his godown at 2, Chingrihatta Lane, Calcutta (b) mortgage of premises 11/a Kyd Street, Calcutta, and (c) equitable mortgage of premises No. 2 Chingrihatta Lane, Calcutta. The defendant denied the plaintiff's right to obtain the same kind of decree in respect of both mortgages and the right to sue on both mortgages in this suit. The defendant also denied the correctness of the amount due to the plaintiff and the jurisdiction of the court.
Finding of the Court:
The court held that the suit was a mortgage suit and not a suit on an overdraft account. The court found that there were two separate mortgages, each with a different date of creation, amount secured, and date of payment. The court also found that the plaintiff's claim for equitable mortgage could not be entertained due to lack of jurisdiction.
Issues: 1. Whether the court had jurisdiction to try the suit. 2. The maximum sums payable under the respective mortgages.
Ratio Decidendi: 1. The court held that it did not have jurisdiction to try the suit because there were two separate mortgages, each with a different cause of action, and the equitable mortgage was not within the jurisdiction of the court. The court found that Clause 12 of the Letters Patent conferred jurisdiction on the court only in cases where the whole or part of the mortgaged land was within the jurisdiction of the court. The court also found that Section 67a of the Transfer of Property Act did not confer jurisdiction on the court to combine two mortgages in one suit. 2. The court held that the maximum sum payable under the registered mortgage was Rs. 1,80,000/- plus interest and other costs, charges, and expenses, and the maximum sum payable under the equitable mortgage was Rs. 2,00,000/-.
Final Decision: The court decreed the plaintiff's claim for the registered mortgage for the sum of Rs. 2,41,881/- upto 5th June, 1958 and further interest, and dismissed the plaintiff's claim for the equitable mortgage due to lack of jurisdiction.
( 1 ) THIS is a mortgage suit under Order 34 Rule 4 of the Code of Civil Procedure. The suit was originally instituted against Khwaja Shamshuddin. On or about 19-9-1957 on his application Khwaja Shamshuddin was adjudicated insolvent by an order of this Court. By an order dated 21-1-1958 the Official Assignee of Calcutta was brought on the record as the defendant.
( 2 ) THE plaintiffs case is that the defendant carried on business in the sale, purchase and export of goat skins and hides under the name and style of East Asiatic Trading Company. The defendant had a current overdraft account with the plaintiff. In the said account from time to time the plaintiff used to lend and advance various sums of monies to the defendant and the defendant from time to time used to draw on such monies and repay various sums from time to time.
( 3 ) IN paragraph 3 of the plaint it is stated that the overdraft account was secured by (a) pledge and/or hypothecation of all stocks of goat skins and hides of the defendant in his godown at 2, Chingrihatta Lane, Calcutta (b) mortgage of premises 11/a Kyd Street, Calcutta, and (c) equitable mortgage of premises No. 2 Chingrihatta Lane, Calcutta.
( 4 ) IN consideration of a loan of Rs. 1,80,000/-granted to the defendant in the overdraft account the defendant executed a registered deed of mortgage in favour of the plaintiff on 3-11-1949, the sum secured being Rs. 1,80,000 plus interest, costs, charges and expenses, the rate of interest being 4 per cent, per annum payable by equal monthly instalments, the date of payment being 10-11-1950 and the property mortgaged was 11/1 Kyd Street Calcutta.
( 5 ) IN paragraph 5 of the plaint it is alleged that the security by way of pledge as also the mortgage of premises 11/1 Kyd Street having proved insufficient to cover the indebtedness of the defendant! in the overdraft account, the defendant on or about 10-11-1949 deposited with the plaintiff at Calcutta within the jurisdiction several documents of title with intent to create security of premises No. 2 Chingrihatta Lane, Calcutta for payment of advances made or to be made in the overdraft account and for all sums due on such account to the extent of Rs. 2,00,000/ -.
( 6 ) IN paragraph 7 of the plaint it is stated that the amount due and owing by the defendant to the plaintiff after appropriating payments was Rs. 6,49,427/5/2 up to 31-12-1953.
( 7 ) IN paragraph 8 it is stated that the plaintiff submitted statement of account from time to time and that the defendant acknowledged in writing the correctness thereof, the last of such acknowledgment being dated 6-1-1954 signed by authorised agent of the defendant.
( 8 ) IN paragraph 9 it is stated that after giving credit to the defendant for all monies paid and proceeds of sale of the defendant's goods received from time to time there is now due and owing by the defendant to the plaintiff the sum of Rupees 6,54,850/14/5.
( 9 ) IN paragraph 10 of the plaint it is stated that in Suit No. 4111 of 1953 of this court pursuant to an order dated 1-2-1954 the stock of goat skins and hides belonging to the defendant in the possession of the plaintiff was sold by the joint receivers appointed in the said 1953 suit. The net sale proceeds amounting to Rs. 1,13,434/14/9 are lying to the credit of the joint account of the said receivers, The plaintiff states that if the claim of the plaintiff is allowed in the said 1953 suit the plaintiff is ready and willing to appropriate the proceeds towards pro tanto satisfaction of the plaintiffs dues in this suit.
( 10 ) IN paragraph 11 of the plaint it is stated that the plaintiff is the mortgagee who holds both the said mortgages from the defendant relating to advances made to the defendant in the said current over-draft; account and in respect of each of which the plaintiff has a right to obtain the same kind of decree. It is further stated that in the absence of a contract to1 the contrary the plaintiff is suing on
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