The Bank Of Ceylon, Jaffna V. Chelliahpillai

[IN THE PRIVY COUNCIL]

1962 Present : Lord Radcliffe, Lord Cohen, Lord Keith of Avonholm,
Lord Hodson and Lord Devlin

THE BANK OP CEYLON, JAFFNA, Appellant, and K. A. CHELLIAHPILLAI, Respondent

PRIVY COUNCIL APPEAL No. 52 OF 1960

S. C. 693 of 1956-D. C. Jaffna, 10403

    Mortgage-Execution of a second bond some time after the first bond-Second bond given " by way of further and additional security "-Hypothecary action brought on the second bond alone-Maintainability-Mortgage Act of 1949, s. 7- Amendment of pleadings and framing of issues-Scope-Civil Procedure Code, ss. 93, 146.

    By bond No. 208 made on 27th February 1951 the defendant mortgaged certain goods to secure an advance of Rs. 20,000. On 20th February 1952, when the sum owing to the creditor (a Bank) was Rs. 14,792, the mortgagor entered into a second bond No. 3427 whereunder he mortgaged certain land " by way of further and additional security " for the due payment of that amount.

    The Bank instituted the present hypothecary action on the second mortgage bond No. 3427. The main defence to the Bank's plaint was put forward simply as a point of pleading. The plaint referred only to the second or accessory mortgage bond, although there was no defect in the first or principal bond. Moreover, it Was erroneously alleged in the plaint that the personal covenant to repay was contained in the second bond whereas it Was contained only in the first; all that was done by the second bond Was to give further security for the debt. It was pleaded in the Answer " that no claim for the payment of any sum of money can be made on the said Deed No. 3427 ".

    Held, that the action was simply a hypothecary action; and to succeed in it the plaintiff needed to prove only the validity of the bond No. 3427 granting the land as security and the existence of a debt so secured. How the debt was created was for this purpose immaterial and the first bond Was not therefore an essential part of the cause of action. It could without being pleaded be produced in evidence to prove the debt.

    Held further, that the fact that a lorry, which Was one of the goods mortgaged under bond No. .08, was with the knowledge of the Bank seized and sold, subject to the mortgage, at the instance of a judgment-creditor of the mortgagor, constituted no bar to the relief claimed in the present action.

    Obiter : The Civil Procedure Code gives in section 93 ample power to amend pleadings. Moreover, by virtue of section 146 of the Code, a case must be tried upon the " issues on which the right decision of the case appears to the Court to depend " and it is well settled that the framing of such issues is not restricted by the pleadings.

    APPEAL from a judgment of the Supreme Court.

    E. F. N. Gratiaen, Q. C., with Walter Jayawardena, for the plaintiff-appellant.

    Raymond Walton with W. H. Goodhart for the defendant-respondent.

Cur. adv. vult.

    March 5, 1962. [Delivered by LORD DEVLIN]-

    This is an appeal from the judgment of the Supreme Court of Ceylon in which that Court, upholding the decree of the District Court of Jaffna, refused to grant to the appellant, the Bank of Ceylon, any relief in a hypothecary action brought by the Bank to enforce a mortgage.

    By a bond No. 208 made on 27th February, 1951, the respondent mortgaged certain goods, of which it is necessary to specify only one thing, a Chevrolet lorry, to secure an advance of Rs. 20,000. On 20th February, 1952, there being then owing to the Bank Rs. 14,792, the mortgagor entered into a second bond No. 3427 whereunder he mortgaged certain land " by way of further and additional security " for the due payment of that amount.

    On 29th January, 1953, the lorry was seized by a creditor in execution of a money decree obtained against the mortgagor and on 7th March it was with the knowledge of the Bank sold subject to the mortga

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