JUDGMENT

The unsuccessful appellant before the Court below has approached this Court by way of this appeal. The plaintiff had filed a mortgage suit O.S.No.48 of 2009 on the file of the II Additional District Judge, Puducherry for recovery of a sum of Rs.9,43,500/- from the 1st defendant and to pass a preliminary decree regarding the same and in default to pass a final decree for sale of the mortgaged property and in case the sale proceeds so ordered is insufficient, then to pass a personal decree against the plaintiff.

2. The brief facts which has culminated in the filing of the above

1st appeal are herein below set out:-

Plaintiff's Case:

3. It is the case of the plaintiff that the 1st defendant who was known to him had requested him to extend a loan of a sum of Rs.5,00,000/- for discharging his debts to the Union Bank of India, Puducherry Branch. The 1st defendant had agreed to pay interest and had also offered to mortgage his property which has been described in the suit schedule. On this assurance the plaintiff had paid a sum of Rs.5,00,000/- to the 1st defendant who executed a simple mortgage deed dated 03.08.2004 in favour of the plaintiff. The defendant had agreed to redeem the mortgage within the period of 3 years from the date of execution and registration of the mortgage deed. He had also agreed to pay interest at 18% per annum on the sum of Rs.5,00,000/-.

4. The plaintiff would further submit that the defendant had undertaken to hand over the original title deeds relating to the suit schedule property as soon as he received it from the bank. However, contrary to the assurance, the 1st defendant had offered it as security to the Bank of India, towards the loan availed by the 4th defendant. It appears that, the bank had initiated proceedings against the 4th defendant, the 1st defendant and one Daisey Rani demanding repayment of the loan and had taken possession of the schedule mentioned property.

5. On coming to know about the same the plaintiff had issued a legal notice to the 1st defendant and the 3rd defendant on 07.06.2007 to which there was no reply from the 1st defendant. The 3rd defendant had sent a reply dated 14.06.2007 stating that the mortgage would not bind the 2nd defendant Bank and that they had obtained an encumbrance certificate where this encumbrance was not reflected. The plaintiff therefore issued a re-joinder dated 20.06.2007.

6. Meanwhile, the 5th defendant had filed a suit for recovery of money against the 1st defendant on the file of the learned Additional Subordinate Judge, Puducherry. Since the 1st defendant remained ex- parte in the said proceedings, an ex-parte Decree came to be passed and the 5th defendant had filed an execution proceedings to execute the decree. The 1st defendant did not mention about the mortgage created in favour of the plaintiff and had also not taken any steps to raise the attachment in respect of the property. Though the value of the property was over a sum of Rs.35,00,000/- the 5th defendant had mentioned its value as Rs.5,00,000/- and in an auction sale conducted on 31.01.2008, pursuant to the execution proceedings the property was sold and a sale certificate issued to the auction purchaser. The plaintiff would submit that the sale had to be cancelled as the plaintiff had a first charge over the suit property. Therefore, the plaintiff has come forward with the instant suit.

Written Statement of the 1st defendant:

7. The 1st defendant had admitted the borrowal and the rate of interest and also the execution of the simple mortgage deed dated 03.08.2004. He also admitted the fact that he had agreed to hand over the original sale deed on receiving it from the bank and had undertaken to redeem the mortgage within a period of 3 years. However, he would contend that since the property had been given as a security to the Bank of India, Coimbatore Zone, for the loan availed by the 4th defendant, the bank had brought the property to sale in exercise of their rights under the SARFAS