Decided on November 13,1957

DWARKA DAS Appellant


- (1.) THE New Bank of India Limited, respondent, instituted a suit for recovery of Rs. 19,186713/-against Naranjan Singh and his son Avtarjit Singh Jaspal on the basis of a pronote and an overdraft current account, Rs. 12,941727- being due on the first and Rs. 6,245/11/- on the second account, including interest at the rate of 6 per cent. , per annum on the first and 7 1/2 per cent. , per annum on the second. The pronote dated 29-10-1946 in the amount of Rs. 11,0007- was executed by the two defendants, but the overdraft account was in the name of Naranjan Singh alone. It is alleged that at the time of executing the pronote on 29-10-1946, Naranjan Singh, defendant No. 1, deposited the title deeds of his property known as "dove Villa", Simla, with the plaintiff Bank as security, by way of equitable mortgage, for repayment of the said loan. It Is further alleged that on 12-12-1946, Narajan Singh created a further charge on the same property for the amount due on the overdraft current account. On 12-3-1949, Naranjan Singh mortgaged this property for a sum of Rs. 7,000/- with M/s. Dwarka Das Jagan Nath, appellants. The subsequent mortgagees were impleaded as defendants No. 3 and a prayer for recovery of the amount by sale of the mortgaged property was made. Defendants Nos. 1 and 2, the debtors, admitted their liability in the amount due on the pronote but denied the one claimed on the overdraft account. While admitting that the title-deeds were deposited with the Bank as alleged, on 29-10-1946, the defendants denied to have created any charge with respect to either of the accounts on the said property. The letter dated 12-12-1946, in respect of the overdraft account was alleged to be inadmissible in evidence for want of registration. Defendants No 3 also denied the charge in favour of the plaintiff and further pleaded that the same could not take priority over the mortgage in their favour. Naranjan Singh defendant died during the pendency of the suit. His sons, Avtarjit Singh jaspal and Madanjit Singh and Mrs. Naranjan Singh were impleaded as his legal representatives.
(2.) ON all the points in issue, the trial Court found in favour of the plaintiff and decreed the suit for the entire amount with costs. Since the principal debtors were displaced persons, they were allowed time for payment of the decretal amount till the end of March, 1952. Thereafter the plaintiff was at liberty to realise the amount by sale of the mortgaged property. Future interest at the rate of 6 per cent. , per annum was also allowed. Defendants No. 3 alone have now come in appeal and the dispute is confined to the alleged charge of the plaintiff's dues on the property mortgaged with the appellants.
(3.) IN support of their case, the plaintiff-Bank, so far as the pronote account is concerned, relied upon two letters Exhibits P. 4 and P. 5. These were written by Naranjan Singh defendant on one and the same date, viz. , 30-10-1946. It shall be remembered that the pronote was executed a day earlier, viz. , on 29-10-1946. The two letters were addressed to the Manager of the Bank at lahore. The relevant portion of Exhibit P. 5 says: 'please acknowledge receipt of the following title deeds, deposited by me with you, in connection with an advance of Rs. 11,000/- made to me by the Bank on 29-10-1946, jointly with s. A. S. Jaspal. " exhibit P. 4 is in the following terms: "with reference to an advance of Rs. 11,000/- made to me by the Bank on 29-10-1946, jointly with S. A. S. Jaspal against the deposit of the title deeds of my houses and premises known as "dove villa" with attached piece of land measuring about 1713 sq. yards, situated below main Railway Station Simla, I hereby declare that there are no other title deeds in respect of the above property with me or lodged with anybody else excepting those deposited with you. I further declare that the above property is free from all sorts of encumbrances and that I am the sole owner of the property. ";

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