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1957 Supreme(Mad) 186

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mr. P.V. Rajamannar, Chief Justice and Mr. Justice Panchapakesa Ayyar
The Canara Banking Corporation Ltd.
Versus
The South Indian Bank Ltd., Shevapet, Salem,
Appeal Nos. 299 and 746 of 1953.
Decided On : 02 August 1957

Advocates:
A. Narayana Pai, for Appellant.
K. Kuttikrishna Menon and C.T. Verghese, for Respondents in App. No. 299 of 1953.
D. Ramaswami Ayyangar and P.R. Varadarajan, for Appellant.
K. Kutti Krishna Menon, C.T. Verghese, T.K. Subba Rao and A. Narayana Pai, for Respondents in App. No. 746 of 1953.

Rajamannar, C.J.-Both these appeals arise out of the same suit, O.S. No. 225 of 1950 on the file of the Subordinate Judge of Salem. That was a suit filed by the South Indian Bank Limited, hereinafter referred to as the plaintiff, for recovery of a sum of Rs. 54,672-1-5 by sale of properties covered by an alleged mortgage by deposit of title deeds in Coimbatore with the Coimbatore branch of the plaintiff bank, on 28th July, 1947, by the first defendant. The second defendant is the son of the first defendant and they are members of a Hindu joint family. The plaintiff alleged that as the mortgage was executed for purposes of the family business, the share of the second defendant in the suit properties was liable for the suit claim. The third defendant,the Canara Banking Corporation Limited,referred to hereinafter as the third defendant, had obtained a decree in O.S. No. 60 of 1949 on the file of the Salem Sub-Court on a mortgage by deposit of title deeds created by the first defendant over the suit properties on 9th August, 1947 and was impleaded as a subsequent mortgagee. The fourth and fifth defendants were subsequent alienees of portions of one of the items of the suit property. We are not concerned with them in these appeals. The first defendant admitted that he was indebted to the Salem branch of the plaintiff bank but only in a sum of Rs. 47,877-14-0. He did not admit that there was a valid mortgage by deposit of title deeds in favour of the plaintiff bank. The guardian ad litem of the second defendant, who was a minor raised a plea that the suit mortgage was not binding on his share of the mortgage properties because the mortgage was created for the purpose of a new business started by the first defendant in stocks and shares and it was not executed for any family necessity or benefit or for the discharge of antecedent debts. The third defendant claimed priority for the mortgage in their favour on foot of which they had obtained a decree.

The learned Subordinate Judge who tried the suit held that the suit mortgage was true and valid, that it was binding on the second defendant’s share as well in the suit properties,and that the third defendant was not entitled to priority over the plaintiff. The learned Judge found that the amount claimed by the plaintiff was correct and on his above finding passed a preliminary decree against defendants I and 2 for sale of the mortgage properties described in the plaint schedule, except one item which had been given up by the plaintiff, for recovery of the amount due to the plaintiff with subsequent interest and costs. A.S. No. 299 of 1953 is by the third defendant, and A. S. No. 746 of 1953 is by the second defendant.

A.S. No. 299 of 1953: The only question for determination is whether the appellant-third defendant is entitled to claim priority over the plaintiff on any ground. [After considering the facts and circumstances the Court concluded:]

Admittedly the mortgage in favour of the third defendant is of a subsequent date. The third defendant is not, therefore, entitled to priority.

As this is the only contention urged by learned counsel for the appellant-third defendant, and that contention fails, A.S. No. 299 of 1953, must be and is hereby dismissed with costs of the plaintiff-respondent.

The other appeal, A.S. No. 746 of 1953, by the second defendant raises an interesting question of law on which there is not much of decided authority. It involves the question raised by the second defendant that the suit debt was incurred for a new business started, by his father, the first defendant, which was not an ancestral business and, therefore, the suit mortgage was not binding on him or his share of the joint family properties. The second defendant was born on 30th October, 1947. He was therefore in his mother’s womb in July, 1947, when the mortgage in favour of the plaintiff was created. Prima facie therefore, he would be entitled to challenge the validity of the alienation in favour of the p























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