D. C. SRIVASTAVA, J.

( 1 ) ). THIS is an Appeal against the Judgment and Decree dated 13. 1. 1984 passed by Civil Judge (S. D.), Narol, whereby the appellants Suit for recovery of money due on mortgage together with interest and cost was dismissed and the counterclaim of the defendant No. 1 was partly allowed whereby the plaintiff firm was directed to execute registered release Deed in favour of the defendant No. 1 at the cost of the defendant No. 1 releasing the suit property from mortgage security without recovering any mortgage debt.

( 2 ) BRIEF facts giving rise to this Appeal are as under : the defendants No. 1 and 2 are Registered Co. Operative Societies under the Gujarat Co. Operative Societies Act, 1961. The defendant No. 2 is prior mortgagee from the defendant No. 1. The defendant No. 1 obtained loan of Rs. 1,80,000. 00 from the plaintiff on 20. 5. 1967 with 9 % per annum interest till repayment of loan. The Chairman of the defendant No. 1 society Bhagchand Sirumal and a member Sadhuram Vasumal executed registered simple mortgage Deed on the same day i. e. on 20. 5. 1967. This mortgage Deed was executed under authority to these two persons flowing from resolution dated 9. 5. 1967. Aforesaid mortgage was subject to first mortgage for Rs. 1 lac in favourn of Shri Chimanlal Kiberdas and another. The property mortgaged was agricultural land, ground with compound wall, etc. fully described in the plaint. Part interest was paid upto 31. 3. 1974 whereafter the interest remained due. In this way the Suit was filed by the plaintiff for recovery of Rs. 1,80,000. 00 towards principal and Rs. 85,725. 00 as interest from 1. 4. 1974 to 15. 7. 1974 at the rate of 9 per cent. The total amount claimed was thus Rs. 2,65,725/from the defendant No. 1. After serving a statutory notice under Sec. 167 of the Gujarat Co. Operative Society Act on 18. 12. 1978 the Suit was filed in the Court below.

( 3 ) THE defendant No. 2 was added as proforma defendant.

( 4 ) THE defendant No. 1 contested the Suit on various grounds taking pleas that the Suit is barred by limitation; that no property was mortgaged by the defendant No. 1 to the plaintiff and that the Suit was further barred by estoppel, acquiesance and waiver. It was also alleged that Dwarkadas Maniklal Israni was managing partner of the plaintiff and his son was carrying different business in the concerned partnership in different names. One Motilal Dwarkadas, son of plaintiffs managing partner Dwarkadas Israni was an employee of M/s. Dwarkadas Nandlal and M/s. Motilal Ashokkumar. Accounts were not given by Motilal. It was alleged that he had misappropriated the amount collected from members of the defendant society. Meeting was called for taking action against Motilal whereafter Dwarkadas realised the gravity of situation and wanted to get out of the said situation hence he started to talk about compromise. Therefore, Agreement was entered between the defendant society and the plaintiff on 18. 4. 1975 which was signed by Dwarkadas Israni as plaintiffs managing partner. Under the said Agreement parties agreed that the company, namely, the plaintiff shall release mortgaged property of the society from mortgage and will certify the debt having been satisfied without charging or taking any money from the society and thus the debt in question of the mortgage stand wiped off and registered Release Deed is required to be executed by the plaintiff and get it registered at the cost of the defendant No. 1 society. A counter claim was filed by the defendant No. 1 praying for a decree that the plaintiff should be directed to execute registered Release Deed in favour of the defendant No. 1 in terms of the Agreement dated 18. 4. 1975.

( 5 ) THE defendant No. 2 in its written statement has pleaded that the defendant No. 1 under Mortgage Deed dated 20. 5. 1967 has created a charge for Rs. 1 lacs in favour of Chimanlal Kuberdas Moti and Kamlaben and another Mortgage deed was executed in favour of the plaint

Click Here to Read the rest of this document