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Surajmull Shroff Vs. Gopeeram Bhotica and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1932Cal823
AppellantSurajmull Shroff
RespondentGopeeram Bhotica and anr.
Cases ReferredLloyd v. Allwood
Excerpt:
- .....from him on the same day upon executing a promissory note and effecting a mortgage by deposit of title-deeds of the said property and of certain other properties as well. he obtained a decree on this mortgage and in execution of that decre9 purchased the said premises and also one of the other properties mortgaged, on 14th february 1924. the sale was confirmed on 18th march 1924 and he took delivery of possession on 17th june 1924. his case is that he could not get actual possession of the disputed land which forms a part of the said premises because defendant 1 murala debi who held the adjoining premises, had, under a conveyance from the said tarala debi dated 4th october 1920, encroached upon the same and then executed a mortgage in respect of it in favour of defendant 2. he.....
Judgment:

Mukerji, J.

1. The plaintiff's claim in the present case which has succeeded in the Court below is based upon a mortgage, the validity of which is disputed by defendant 2, the appellant in this appeal. The acts of the case are the following : Premises No. 11, Cockler's Lane belonged to the Mitras, who sold it to one Tarala Debi for Rs. 65,000 on 23rd March 1920. The plaintiff's case is that in order to make this purchase Tarala Debi borrowed the entire amount from him on the same day upon executing a promissory note and effecting a mortgage by deposit of title-deeds of the said property and of certain other properties as well. He obtained a decree on this mortgage and in execution of that decre9 purchased the said premises and also one of the other properties mortgaged, on 14th February 1924. The sale was confirmed on 18th March 1924 and he took delivery of possession on 17th June 1924. His case is that he could not get actual possession of the disputed land which forms a part of the said premises because defendant 1 Murala Debi who held the adjoining premises, had, under a conveyance from the said Tarala Debi dated 4th October 1920, encroached upon the same and then executed a mortgage in respect of it in favour of defendant 2. He challenged the validity of the conveyance by Tarala Debi in favour of defendant 1 and pleaded that in any case both the defendants are bound by his mortgage the suit on which he had instituted before the conveyance had been executed. The defendants, in the written statements they filed, challenged the validity of the plaintiff's mortgage and impugned the decree and the sale held under it as fraudulent. They also maintained that their own conveyance and mortgage were bona fide and valid transactions. The Subordinate Judge has made the usual decree nisi for redemption, declaring that in the event of the defendants not redeeming the plaintiff's mortgage their right to redeem shall be extinguished and the plaintiff should get khas possession on declaration of his title. In the plaint, so far as the mortgage is concerned, all that was said was that:

Tarala Debi had borrowed a sum of Rs. 65,000 from the plaintiff on 23rd March 1920 on a promissory note and deposited with him in the Presidency Town of Calcutta the title deeds of the said property (meaning Premises No. 11 Cockler's Lane) and Promises Nos. 3 and 4, Kayatola Lane by way of equitable mortgage (Para 2).

2. In the written statement of defendant 2 the following averments were made:

This defendant further states that the memorandum and promissory note if any, was made and executed at Bhowanipur at the residence of Tarala Debi and as such no legal and valid equitable mortgage was created thereby. This defendant further states that the conveyance in favour of Tarala Debi being executed on 23rd March 1920 it could not be made over to the plaintiff at the same time and date (Para. 4). That this defendant has been informed and he believes that at the time of the purchase of the premises .... Mr. A. C. Bose, Solicitor, acted on behalf of the aforesaid Tarala Debi and the title deeds with regard to the said premises were in his custody as such Solicitor. The said Mr. A. C. Bose was also acting as Attorney for the plaintiff and by memorandum dated 23rd March 1920 and made and signed at the residence of the aforesaid Tarala Debi at Bhowanipur it was agreed as between the plaintiff and the said Tarala Debi that the title deeds relating to the premises mentioned above would remain with Mr. A. C. Bose who, as stated above, was acting as attorney for both (Para 5).

3. (His Lordship then discussed evidence and concluded that the positive case as regards delivery of title in Calcutta pub forward on behalf of the plaintiff was not proved and proceeded). But on plaintiff's behalf reliance has been placed upon a legal position which, it is said, arose and the effect of which, it is contended was to establish that there was a delivery of title deeds to the plaintiff in Calcutta sufficient in law to create a mortgage. This view appears to have found favour with the Subordinate Judge. He has observed that as it was an admitted fact that there was an agreement between Tarala Debi and the plaintiff that the title deeds would remain with Mr. Bose who was acting as Attorney for the vendor as well as the purchaser, Mr. Bose was thus constituted an agent and trustee for holding the title deeds on behalf of the plaintiff as security for the loan. He has also observed that it is only natural that Mr. A. C. Bose would, in the interest of the plaintiff, whose Solicitor he was, hold the title deeds as collateral security and that, in fact, they remained in his custody and the plaintiff has produced them in the suit. He has observed further that the authority which Tarala Debi gave Mr. Bose was a verbal one but that subsequently she sent him a letter of authority along with the promissory note through Mr. De. This last observation obviously is not correct because it was not a letter of authority but a letter of deposit that was so sent.

4. The authority which is alleged to have been given as aforesaid was given at Mr. C.R. Dass' residence at Bhowanipur as Mr. Bose himself has said. If Mr. Bose was constituted a trustee to hold the title deeds for the plaintiff that mus therefore have taken place at Bhowanipur. It has however been argued on behalf of the respondent that in consequence of that authority the title deeds which ware already with Mr. Bose ipso facto passed on from him in his capacity as Solicitor for Tarala Debi to himself in his other capacity, namely as Solicitor for the plaintiff, immediately as the plaintiff gave Mr. Bose the cheque in his office in Calcutta. There are several difficulties in the way of accepting this contention. Firstly, such a contract was not alleged nor proved; nor is it the same thing as was admitted in the defendant's written statement and which was only this that the title deeds would remain with Mr. A. C. Bose. Nextly, the contention must be that this delivery thus took place in Calcutta without even Mr. Bose himself knowing of it, because Mr. Bose has never said that anything of this kind took place, and on the other hand has asserted that he had been authorized to deliver the title deeds to the plaintiff and that he acted up to his instructions by doing so. If this delivery which Mr. Bose or Mr. De has spoken of be found not established, it must, in our judgment, be held that the requirements of a valid mortgage are not satisfied. That there was no such delivery is also borne out by the fact that the conveyance was filed on behalf of Tarala Debi in certain proceedings in the Collectorate on 30th June 1920 (Ex. C 2) and on 13th September 1920 (Ex. C), and no explanation has been given as to how it came about. A passage in Coote on Mortgage, Edn. 9, Vol. 1, p. 92 has been referred to on behalf of the plaintiff. It runs thus:

A deposit of deeds with the debtor's own Solicitor, to be hold by him until a mortgage is executed and then to be handed over to the creditor, creates an equitable charge, and constitutes the Solicitor a trustee for the creditor: Lloyd v. Allwood [1859] 3 Doe D & J 614.

5. An equitable charge however is a very different thing from a mortgage by deposit of title deeds created under Section 59, T. P. Act. In our judgment no delivery to the plaintiff in the Town of Calcutta has been proved in this case, and we are, on the other hand, inclined to hold that whatever contract there was between the parties and all the relevant incidents of the transactions took place at Bhownipur, that is to say, outside Calcutta. We are also of opinion that the memorandum or letter of deposit of title deeds has been withheld because its production would prejudice the plain tiff's case. The result is that in our judgment the appeal should succeed. We accordingly allow the appeal and reversing the decree of the Court below dismiss the suit with costs to the appellants in both the Courts.

Bartley, J.

6. I agree. The essentials of a mortgage by deposit title deeds, under the Transfer of Property Act are delivery in the town of Calcutta, to a creditor or his agent, of documents of title to immovable property with intent to create a security thereon.

7. Here the specific case made out was a deposit of the title deeds with the plaintiff himself, by his Attorney, in the Attorney's office in Calcutta, under the instructions of Tarala Debi. That case has failed. It is now clear that the conveyance, and the so-called memorandum or letter of deposit were delivered outside Calcutta to the Attorney's assistant who took them to his employer to keep in the Calcutta office. The position is complicated by the fact that the latter was acting for both parties in the transaction and that the memorandum said to have been signed by Tarala has not been produced. Even if it could be said that there was a delivery to the Attorney, in Calcutta, through his assistant, there is no proof that, acting as he was for both parties, that delivery was to him as agent of the creditor. Further, in the absence of the letter of deposit, it is difficult to hold that the intent was to create a security. If there was delivery outside Calcutta, there was no equitable mortgage.


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