Braund, J. - (1.) This is a first appeal from the decision of the learned Additional Civil Judge of Benares in a suit which relates to the transactions of the Benares Bank Limited, now in liquidation. The facts are relatively simple and, we venture to think, when understood, themselves go a long way towards providing the solution of the difficulties which have occurred.
(2.) On the 3rd December, 1936, the Benares Bank Limited (hereinafter called "the Benares Bank") in the course of its business took a mortgage by deposit of title deeds from a certain Rai Sahib Harkrishna Das and others to secure a principal sum of Rs. 10,000 then outstanding against the mortgagors on a running account with the bank. The title deeds deposited with the Benares Bank related to certain lands and buildings more particularly described in the second schedule to the instrument of mortgage. The terms of the instrument of deposit are not very material, but it may be observed that the security was for the principal sum together with interest thereon at the rate of seven and a half per cent. per annum and that, following the customary form, the mortgagors (whom, to save confusion. We shall hereinafter refer to as the "principal mortgagors") undertook at the request of the Benares Bank at any time to execute a mortgage over the properties in the English form. The date for the repayment of the debt was expressed to be the 31st December, 1938.
(3.) On the 24th April, 1939, the Benares Bank, being itself then in need of money, either borrowed from, or were then themselves indebted to the Bank of Bihar Limited (hereinafter called the "Bihar Bank") in a sum of forty thousand rupees, for which on that date a promissory note was executed by the Benares Bank in favour of the Bihar Bank. At the same time, as security for the payment of this sum of forty thousand rupees by the Benares Bank to the Bihar Bank the former executed what is described as a "deed of assignment," which is set out at page 35 of our paper book. This instrument of the 24th April, 1939, which we shall hereinafter refer to as the "sub-mortgage", was, so far as material, in the following terms:- "We hereby assign to the Bank of Bihar Limited the following debts as security for an advance of Rs. 40,000 (rupees forty thousand) taken from them under a pronote executed by us of date. The debts are unencumbered and nothing out of it has been realised. Any payment made to us in the future towards the same will be handed over to the Bank of Bihar Limited immediately.........Details of debts. Equitable mortgage, dated 3rd December, 1936, from Rai Sahib Harkishen Das and others to Benares Bank Limited.";