INDIAN OVERSEAS BANK LTD Vs. R.E.M. IBRAHIM

JUDGEMENT

(1.) THE plaintiff in O.S. No. 26 of 1966 on the file of the Court of the Subordinate Judge of Kumbakonam is the appellant herein. It is a banking company. The first defendant in the course of his business borrowed monies from the plaintiff -bank at Madras, Penang, Malacca and Singapore. Pursuant thereto, large amounts were due and payable by the first defendant to the plaintiff. In order to safeguard the interests of the bank, the first defendant executed an agreement on 10 -1 -1949 at Madras undertaking to execute a mortgage over all the immovable properties owned by him in India in favour of the plaintiff -bank. He, however, did not respect the covenants in the said agreement. The bank had to file in O.S. No. 25 of 1952 on the file of the Court of the Subordinate Judge, Kumbakonam for specific performance of the contract to execute a mortgage bond for a sum of Rs. 50,000. On 14 -7 -1953, the said suit for specific performance was decreed directing the first defendant to execute a mortgage over the properties described in the B Schedule to the plaint comprising of four items. Even then the first defendant did not execute the deed of mortgage. It became necessary for the Court through its accredited officer to execute such a mortgage on 28 -1 -1954 in favour of the plaintiff for a sum of Rupees 50,000, over the aforesaid four items described in the B schedule to the plaint. The suit for specific performance was decreed with costs. To realise the costs, the plaintiff filed several execution petitions. During the pendency of such execution petitions, one Hathija Bivi instituted a suit in O.S. No. 162 of 1962 on the file of the Court of the District Munsif of Valangiman at Kumbakonam for a declaration that item No. 3 of the four items comprised in B schedule was her property and the first defendant had no interest thereon. The said Hathija Bivi succeeded. The result was that the plaintiff's charge was available only over items 1, 2 and 4 of the B schedule properties. In order to realise the costs, the plaintiff filed execution petitions and finally, the three items of properties were brought to sale subject to the plaintiff's mortgage right. Ultimately, the properties were sold in different lots in which items 1 and 2 were purchased by the plaintiff itself and item No. 4 by the second defendant, through his agent, the third defendant. The sales were duly confirmed. Item No. 4 above referred to was the 14/48th share of the first defendant in the said property. It appears that subsequent to the mortgage by the first defendant in favour of the plaintiff the eighth defendant and another as lessees of the first defendant filed O.S. No. 83 of 1958 on the file of the court of the District Munsif, Kumbakonam against the other sharers of the property for partition and separate possession, and obtained a decree therein. In the final decree passed by the competent court, the properties described in Schedule A to the plaint herein were allotted to the first defendant. The second defendant by reason of her purchase of the fourth item in the court auction as above and as a result of the final decree in the suit for partition referred to, obtained delivery of the A Schedule property in lieu of her share in the fourth item of the B Schedule properties. It is the case of the plaintiff that the A Schedule properties have thus become a substituted security to them in the place of the fourth item of the B Schedule. The plaintiff claims that on the date of the suit, a sum of Rupees 87,716.66 was due and payable on the mortgage which was still subsisting, the charge over which extended over items 1, 2 and 4 of the B Schedule properties.

(2.) IT is not in dispute that the first item was sold in court auction for a sum of Rs. 3,650, the second item for Rs. 305 and the fourth item for Rs. 710. The plaintiff's case is that as the mortgage was still subsisting, the present owners of the properties, other than items 1 and 2 are liable to contribute in proportion to the price fetched at the auction for the properties which were the subject -matter of the hypotheca. Thus calculated, the plaintiff claims a sum of Rs. 13,352.37 from the second defendant who by virtue of a partition action referred to by us already (O.S. No. 83 of 1958 on the file of the court of the District Munsif, Kumbakonam) has become the owner of the A schedule properties in lieu of item No. 4 of the (B schedule properties. Defendant 3 was only acting as the agent of the second defendant; but he was impleaded as a party. Defendants 4 to 7 are tenants in the property described as item No. 4 in the B schedule. The eighth defendant claims to be the purchaser of the said property during the pendency of the attachment effected by the plaintiff in the earlier action. But when he sought to recover possession of the properties by instituting a suit in O.S. No. 62 of 1963 on the file of the Court of the District Munsif, Kumbakonam, that was dismissed. An appeal against the same by the eighth defendant was also unsuccessful. But the eighth defendant was added as a party to the action as a necessary or a proper party. It was in those circumstances, the plaintiff claims contribution from the second defendant of a sum of Rs. 13,362 -37. In fact, it sought for a preliminary decree and in default of the payment of the amount, for a final decree enabling the plaintiff to bring the A Schedule property which was the substituted security for sale for the realisation of the amount.

(3.) ON these pleadings, the learned Subordinate Judge, Kumbakonam framed the following issues : -