FIRM JANKIRAM-SITAL RAM Vs. CHOTA NAGPUR BANKING ASSOCIATION, LTD

JUDGEMENT

(1.) These two appeals are respectively by defendant 5, and by defendants 2 and 3, against a decision of the Subordinate Judge of Dhanbad. The suit was for possession of three houses in Jharia. Defendants 1 and 2 are brothers. Defendants 3 and 4 are sons of a deceased brother of defendants 1 and 2. The family came from a distance and set up business in Jharia some years before the facts to be mentioned. The deceased brother and defendants 1 and 2 separated about 14 or 15 years ago and thereafter they held their property in defined shares but in common management. House No. 3 is the most valuable and the land on which it stands was acquired piece by piece between 1904 and 1914. Two of the deeds were in favour of the deceased brother and defendants 1, and three are in favour of defendant 1 alone. House No. 2 stands in a plot which was acquired in 1916 by a deed in favour of defendant 1, but the deed recites that the consideration was due to the firm under which style the family continued their business at all times. House No. 1 was acquired in 1920 under a deed which has not been produced. All three properties are recorded in the name of defendants in equal shares. The evidence amply supports the finding that the property in suit was held by the three brothers in equal separate shares. It appears that the person who actively conducted the mercantile business carried on in the firm name was defendant 1 and that the other defendants were what may be called sleeping partners.

(2.) 13 November 1922, defendant 1 executed a mortgage bond mortgaging inter alia the three houses aforesaid to the plaintiff Bank and in the mortgage deed he described the property as his own self-acquisition. On 25 November 1923 he executed a mortgage to the plaintiff Bank of the equity of redemption of the first mentioned mortgage. The Bank, apparently warned by the occurrence of more than one name in the title deeds, insisted that defendants 2 and 3 should hear the first mortgage deed read over and should attest it as witnesses. There is some conflict of evidence as to where this happened and as to exactly what the defendants did and said at the time, but there is no dispute as to the fact that they did so attest the deed and I have no doubt on the evidence that the deed was read over to them and that they raised no objection whatever. I have also no doubt that they thoroughly understood the nature of the deed. They were interested in the business for which the money borrowed was required. The plaintiff had suggested that defendants 2 and 3 should execute the bond as parties, but defendant 1 had objected on the ground that they might in that event claim a share in the property mortgaged which he had described as his own acquisition. I am further satisfied that the state of affairs as to the business and property was sufficiently obscure to cause the rights to it to be a matter of doubt and difficulty to the Bank, although they might have insisted on a minute examination of title and might have discovered the title rights of defendants 2, 3 and 4 in that property. Further I am satisfied that the action of defendants 2 and 3 in attesting the document with knowledge of its contents in fact induced the plaintiff company to advance the money lent by them on the mortgage security. In 1929 the plaintiffs sued to enforce their mortgages against defendant 1 only, and on 17 March 1930, having obtained judgment, they purchased the property at the auction sale and the sale was confirmed on 15 August 1930.

(3.) 20 September 1930, defendant 5 who had obtained a money decree against defendants 1 to 4 executed it, put up house No. 1 for sale, purchased this house, and the sale to him was confirmed on 1 December 1930. On 3 March 1981, defendants 2--4 sold their two-thirds share in house No. 3 to defendant 6. The plaintiffs took out delivery of possession of the mortgaged property the sale of which to them had been confirmed and were resisted by defendants 2 to 6. They therefore brought this suit. Defendant 1 did not appear. Defendants 2--4 filed one written statement, and at the trial set up their ownership of the mortgaged property to the extent of a two-third interest and this contention they have justified. The real contention in this appeal is as to whether in the face of their conduct and attestation they are entitled to defend this suit. The facts are clear. Defendant 5 contends that he purchased bona fide and as an execution creditor the shares of defendants 2--4 and that he is not bound by the conduct of defendants 2 and 3 of which he had in any case no notice. Defendant 6 supports the case of defendants 2--4 and says that he is in possession. The Subordinate Judge decreed the suit against defendants 1, 2 and 3, and defendant 5 and defendant 6 as to 5/6 share in the property. As against defendant 4 he dismissed the suit and in this dismissal he was clearly right, for defendant 4 having a clear l/6 right in the property (being one-half of his deceased father's share) and being unaffected by the conduct of defendants 2 and 3 is not affected by the mortgages or by the sale in execution of the money decree obtained by defendant 5. The cross-appeal by the plaintiff against this part of the decision must be dismissed but without costs as defendant 4 has not appeared.