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Amulya Gopal Majumdar Vs. United Industrial Bank Ltd. and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 777 of 1973
Reported inAIR1974Cal323,78CWN1029
ActsCode of Civil Procedure (CPC) , 1908 - Section 151 - Order 34, Rule 8 - Order 39, Rule 1
AppellantAmulya Gopal Majumdar
RespondentUnited Industrial Bank Ltd. and ors.
Appellant AdvocateRanjit Kumar Banerjee and ;Abinash Chandra Bose, Advs.
Respondent AdvocateP.N. Mitter, ;C.N. Mukherjee and ;Ajit Chakraborty, Advs. (for No. 1) and ;Manas Nath Roy, Adv. (for No. 3)
DispositionAppeal partly allowed
Cases ReferredJugal Kissore Lail v. Kartic Chunder
- the suit brought by the present appellant for enforcement of the mortgage and for sale of the mortgaged property. prima facie, therefore, his right to redeem remained unaffected.5. mr. mitter, on behalf of respondent no. i, has cited before us the decision ofthe judicial committee in 66 ind app 50 --(air 1939 pc 14), r. k. banerjee v. satya charan -- and also two bench decisions ofthis court in sk. kalu sharip v. abhoy charan karmakar, 25 cal wn 253 = (air 1921cal 157) and rowshan khan v. khaja abdulkhaleq, (1941) 45 cal wn 705, to show thatthe only remedy of the prior mortgagee eventhough he has auction purchased the property is to get the mortgage money in a properly framed suit for redemption by a subsequent mortgagee who was not a party inthe suit brought by the prior mortgagee......

A.K. Sinha, J.

1. This appeal is preferred by the defendant appellant against the judgment and order passed by the Trial Court granting temporary injunction restraining the appellant from taking delivery of possession of the disputed property in an execution case in which he as mortgagee decree-holder auction purchased the property.

2. The parties, as appears, have been fighting series of successive litigations centering round two mortgages created over the disputed properties. We need not recite over again the facts of this case for those appear to have been briefly stated in the judgment by the trial court. The admitted facts, however, are that the predecessor of respondent No. 2 Messrs. Eagle Plywood Industries (P) Ltd.. created a mortgage for a sum of Rupees 5,00,000/- over some of the immovable properties belonging to it in favour of the present appellant who in enforcement of that mortgage obtained a final decree for sale ard in execution of that final decree auction purchased those properties but that decree was obtained without making the respondent No. 1 a party. The same company created a subsequent mortgage in respect of these properties along with other properties namely, factory sheds, machineries etc. in favour of the predecessor of the present respondent No. 1 sometime in 1951 and thereafter on its amalgamation the same company created a fresh mortgage in favour of the respondent No. 1 and their total dues would come to about Rs. 6,00,000/- (Six Lacs), the respondent No. 1 brought a suit sometime in 1965 for enforcement of its mortgage making the present appellant a party as defendant No. 6 in that suit and has since obtained a preliminary decree. The real controversy arose when the present appellant after purchasing the properties mortgaged in his favour in auction sale in execution of his decree set the executing court in motion for taking delivery of possession. There he was resisted by the lessee who was inducted for a period of 21 years by a Receiver appointed at the instance of respondent No. 1 with the consent of the mortgagor the respondent No. 2. Over this dispute as regards taking delivery of possession a series of proceedings followed and ultimately this court took the view that the lessee had no right to resist the appellant from taking possession of the property. The lessee's suit, however, for declaration of title and for permanent injunction is pending.

3. Thereafter, on 27th May, 1973, the Bank, respondent No. 1 filed a suit as a puisne mortgagee for redemption and in that suit it prayed for granting a temporary injunction restraining the present appellant from taking dclivery'of possession of the properties auction purchased by him in execution of the title execution case No. 8 of 1957. The trial court granted the temporary injunction till the disposal of the suit and that is how. In short, the appellant felt aggrieved and preferred the present appeal.

4. The only question is whether the order of temporary injunction passed by the trial court should be maintained. Mr. Banerjee for the appellant contends that in a suit for redemption the court has no power to grant a temporary injunction. The only relief that is available to the plaintiff is, if at all, to redeem the prior mortgagee on payment of the mortgage money that may be found due by the court on accounting between the parties. It is argued that it is not open to the court to grant temporary injunction in a case where the property has already been purchased by the first mortgagee in enforcement of his mortgage. We think that there is no such absolute rule precluding the court from exercising its power to grant a temporary injunction in a proper case even in a suit for redemption. On the contrary, having regard to the provisions of Order 39 read with Section 151 of the Code of Civil Procedure the court has enough power to exercise its discretion in any suit for granting or refusing temporary injunction. Mr. Banerjee, however, has cited a passage from Dr. Ghosh's Law of Mortgage in India at Page 625 (Fifth Edition) where quoting the statement of law made by Jones, an English authority on the subject, it has been stated amongst other things that 'a puisne mortgagee's only remedy, however is to redeem. He cannot have the sale set aside by intervening by petition in the foreclosure-suit. His only right is the right of redemption.' It is difficult to see how the above observations can advance the argument of Mr. Banerjee. It is undisputed that having regard to the position of the parties the Bank seems to have a clear right of redeeming the mortgage in favour of the appellant. This statement of law, we think, helps the Bank and not the appellant for the Bank was not made a party in the suit brought by the present appellant for enforcement of the mortgage and for sale of the mortgaged property. Prima facie, therefore, his right to redeem remained unaffected.

5. Mr. Mitter, on behalf of respondent No. I, has cited before us the decision ofthe Judicial Committee in 66 Ind App 50 --(AIR 1939 PC 14), R. K. Banerjee v. Satya Charan -- and also two Bench decisions ofthis Court in Sk. Kalu Sharip v. Abhoy Charan Karmakar, 25 Cal WN 253 = (AIR 1921Cal 157) and Rowshan Khan v. Khaja AbdulKhaleq, (1941) 45 Cal WN 705, to show thatthe only remedy of the prior mortgagee eventhough he has auction purchased the property is to get the mortgage money in a properly framed suit for redemption by a subsequent mortgagee who was not a party inthe suit brought by the prior mortgagee. Inthis connection, Mr. Mitter has referred tous the provisions of Order 34, Rules 7 and 8of the Code of Civil Procedure also to showthe scope of the rights and remedies available to the subsequent mortgagee as plaintiffand the prior mortgagee as defendant in sucha suit. It is pointed out that where paymentin accordance with preliminary decree ismade by the plaintiff, several consequenceswill follow namely (a) ordering the defendantto deliver up the documents referred to inthe preliminary decree, and if necessary,(b) ordering him to retransfer at the cost ofthe plaintiff the mortgaged property as directed in the said decree, and also if necessary,-- (c) ordering him to put the plaintiff in possession of the property. Clearly, therefore,if the plaintiff has a right to be put in possession in a suit where possession has alreadybeen taken we fail to see how in the circumstances that have arisen in this case, the courtwould be totally powerless to defer the delivery of such possession to the appellantwhich forms the subject-matter of the mortgage in favour of the respondent Bank. Theprovisions of Rule 8, in our opinion, contemplates that there might be cases where possession is retained either with the originalmortgagor or with the subsequent mortgagee.In our opinion, where, as here, the possessionhas not already been taken by the auctionpurchaser, it cannot be said the court has nopower to consider the further question evenin a redemption suit as to whether the auction purchaser should be allowed to take thatpossession while the suit for redemption bythe subsequent mortgagee is pending.

6. Mr. Banerjee has, however, next contended that the Bank, if at all in possession, would be deemed to be in possession of the disputed property through the Receiver and the lessee but this Court has already held that this is not binding on the prior mortgagee and the lessee has no power to resist taking of such possession by the appellant as decree-holder auction purchaser of the properties mortgaged to him. It is true that the lessee in matters arising out of an interlocutory proceeding was found by this Court not to have any right to obstruct the present appellant in taking possession of the property but in the same judgment, it appears, the possession of the Bank as a puisne mortgagee was not considered at all. The question so far as the right of the Bank is concerned was left open. It is, however, argued that if the Bank claims to be in possession through the Receiver and the lessee then, clearly, the Bank must be deemed to have no possession at all for in the earlier proceeding this Court held that the lease was not binding on the appellant and the lessee had no right to resist the appellant from taking possession of the disputed property. This seems to be a disputed question of fact and even granting that the lease is not binding on the appellant, the possession of the Bank on that account atone in respect of the properties mortgaged to it cannot be altogether ignored. We, however, do not think it necessary to pursue this point further in this case for in our opinion the question is not so much of possession as of preservation of the Bank's security consisting of both movable and immovable properties in respect of which the mortgage was created in its favour. It is undisputed that the properties mortgaged to and auction purchased by the appellant are not identical with those properties mortgaged to the Bank. The entire factory sheds, godowns and heavy machineries, as described in the schedule of the plaint, standing on major portion of the land which do not form the subject-matter of the mortgaged property in favour of the appellant, were mortgaged to the Bank along with the properties mortgaged in favour of the appellant. If in these circumstances the appellant is allowed to take vacant possession of the properties mortgaged to him by removing all structures and fixtures with machineries installed and other movables mortgaged in favour of the Bank, then clearly security of the Bank will be seriously in jeopardy and may ultimately be lost altogether. This apart, when the puisne mortgagee was not made a party and as his claim and his right to redeem prima facie appears to be subsisting and the suit for redemption is pending, we think, the appellant ought not to be allowed to take vacant possession. The trial Court pointed out, we think rightly, that a running business is being carried on in the factory where a number of workmen have been engaged and no court should refuse to interfere where the only consequence that will follow if the appellant is allowed to be put in possession would be to ruin the business altogether. Mr. Banerjee, however, has strenuously repeated his argument that if such an injunction is granted it would only mean benefiting the same lesser who was denied, any right by this court to resist the appellant from taking possession of the properties mougaged in his favour. It is said, that would clearly be lending support to the lessee and in that event the same lessee would be allowed, it not directly, indirectly to circumvent the order passed by this Court previously on identical question. We fail to see how this is so. The question that was decided in the earlier proceeding is very different from the question raised here. The Bank, admittedly, was not made a party in the appellant's suit and at any rate prima facie it has sufficient right to redeem the mortgage of the appellant and on that account in the present suit filed by him for redemption of that mortgage it has equally the right to protect the properties mortgaged and ask for appropriate relief in that suit. A running business, it cannot be doubted, which is being carried on in the disputed property would, if not enhance, protect the value of the security. We think, on this case the relief he has asked for by way of temporary injunction is open to him.

7. Apart from this consideration it is pointed out by Mr. Mitter that since the Bank was not a party in the appellant's suit, the appellant would not be entitled in law to take khas possession of the properties mortgaged to him. He has in aid of such contention relied on a Bench decision of this Court in (1894) ILR 21 Cal 116, Jugal Kissore Lail v. Kartic Chunder where it is held amongst other things that the plaintiff was not entitled to khas possession as against the second mortgagee who have the opportunity of redeeming the prior mortgage but not made parties in the suit instituted earlier by the plaintiff. Although this was a case where the respective rights of the parties for taking khas possession was being considered as between the patnidars, question arose in that connection as to whether the plaintiff who was a prior mortgagee was entitled to khas possession by virtue of his purchase of the properties in question as against the patnidars who were found to be also second mortgagees of the same properties and had an opportunity of redeeming the mortgage not having been made parties to the suit brought by the plaintiff. The point seems to be almost similar to the point at issue in the present case and although this decision is as old as 1894 by subsequent codification of law we think, that principle has been reinforced. So, considering the matter from this aspect also we do not think that the Bank could not have any remedy in law as subsequent mortgagee in a redemption suit against the prior mortgagee by asking for a temporary injunction.

8. Mr. Banerjee however has raised another point namely, that as a purchaser of the equity of redemption us a prior mortgagee the appellant is equally entitled to redeem the subsequent mortgagee. We do not think that this point calls for a decision in the present appeal. This is a matter which may arise in course of final determination of the suit which is now pending in the court below. We do not express any opinion on this point. In our opinion, therefore, the trial court was right in issuing a temporary injunction. We are satisfied that a prima facie case exists and we agree also on the line of reasonings given by the trial court on the question of balance of convenience or inconvenience temporary injunction ought to be issued. But at the same time in view of the fact that the appellant has been out of possession, such injunction should be granted on terms. At the present moment we find from the records that the principal amount due to the appellant would be about Rupees 40,000/-. To this we shall add for the present a further sum of Rs. 40,000/- as and by way of interest which may be recoverable by the appellant. Thus, if the respondent Bank deposits a total sum of Rs. 80,000/- (Rupees Eighty Thousand) in the trial court, we think that would sufficiently secure the mortgage money that may ultimately be found to be due and payable to the appellant for redeeming the mortgage, in case the trial court decrees the plaintiff's suit. Mr. Mitter has very fairly stated before us that the respondent Bank is ready and willing to deposit a sum of Rs. 80,000/- (Rupees Eighty Thousand) in cash in the trial court as and by way of security for payment of the mortgage due of the appellant.

9. Accordingly, this appeal succeeds in part. We modify the order of the trial court to this extent that the petitioner shall deposit in cash in the trial court a sum of Rupees 80,000/- (Rupees Eighty Thousand) to the credit of the appellant within two weeks from the receipt of the copy of this order by the Court below and in default of such deposit in the manner and within the time indicated herein, the temporary injunction issued shall stand dissolved and the appellant would be entitled to take delivery of possession of the property. In the event the said sum of Rs. 10,000/- (Rupees Eighty thousand) is deposited in Court in the manner and within the time indicated, the trial court shall in its discretion invest the said sum either on the application of either parties or of its own motion in such Government Securities as may be just and proper or in the alternative in Fixed Deposit in the State Bank of India so that the interest in the entire amount may in the meantime accrue.

10. In the facts and circumstances of this case, there will be no order as to costs.

11. We make it clear that the respondent Bank shall be at liberty to claim adjustment of the dues on final accounting between the parties in the redemption suit, if necessary.

12. Let a copy of the above order as also the original records be sent down to the court below as quickly as possible.

Sen Gupta, J.

13. I agree.

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