P L D 1962 Dacca 1 (PLP)

HASAN, J.‑This appeal is at the instance of the defendants against a judgment and decree passed in a suit for recovery of Rs. 1,35,849‑11‑3 instituted by the plaintiff, the Pioneer Bank Ltd, under liquidation. The plaintiff's case in short is as follows: ‑ The defendants opened a current account No. 382 with an initial deposit of Rs. 6,

000. After that there was withdrawal and also deposit by the defendants. On the 7th March 1945, plaintiff called upon the defendants to furnish security as their overdrafts stood to Rs. 1,08,146‑8‑

6. The defendants on the very same date deposited their title deed as a security of the said dues and also for the future debt to be incurred by the defendants and executed a promissory note for a sum of Rs. 1,10,

000. Thereafter on the 8th March 1945, the defen dants sent a confirmatory letter regarding the intention of creation of equitable mortgage in favour of the plaintiff. The defendants over‑drew by 28th April 1948, to the extent of Rs. 1,04,306‑0‑

6. The Bank closed functioning on the 14th September 1948 but again began to function from 1950 on the approval of the State Bank of Pakistan and sanction by the Hon'ble High Court, Dacca. The defendants had transactions with the Bank up to 30th August 1951. On the 31st January 1952, Rs. 1,35,849‑11‑3 was found due. As the defendants failed to clear up their dues, the plaintiff instituted the present suit on the 7th August 1952. The defence of the defendants in short is as follows: ‑ There was a current account opened by the defendants with the plaintiff‑Bank with an initial deposit of Rs. 6,

000. No mortgage was created by depositing the title deed with the plaintiff or executing a hand‑note in favour of the plaintiff. The defendants did not file a memorandum as alleged by the plaintiff on the 8th March 1945 but the plaintiff collusively obtained a blank paper signed by the defendants which has been collusively converted into a memorandum. The kabala marked Exh. A was handed over to the Bank when the Bank wanted to inspect their document to satisfy itself about the defendants' solvency. They did never deposit title deed with the plaintiff as a security for the money to be advanced. There was an over‑draft account on the current account. The bar of limitation has also been pleaded. The plaintiff in support of its case has examined three witnesses and has filed some documents in support of the case, while on the other hand, the defendants only examined defendant No. 2 himself and no body else and no documentary evidence has been adduced by the defendants in support of their case. Mr. Hamidul Haq Choudhury, the learned Advocate for the appellants, in support of the appeal has first contended that the judgment and decree of the trial Court are not maintainable' in law as the same are based on an inadmissible evidence, namely, the evidence of P. W.

3. In support of this contention it has been argued that P. W. 3 is an Indian National who has been examined on commission not permissible in law. Reliance has been placed on the case of The Hanover Fire Insurance Company v. Messrs Muralidhar Banechand reported in (P L D 1958 S C (Pak.) 138). In that case at some stage one of the parties got its witnesses examined on commission in India. Later on another party to the suit wanted permission to examine its witness in India. Objection was taken by the party who got its witnesses examined in India on commis sion. The objection that was taken is that law does not permit examination of a foreigner in a foreign country on commission. This case went up to the Supreme Court and the relevant passage on which the learned Advocate for the appellants has relied on is as follows: - "When the petition for special leave was heard, the appellant's counsel conceded that if his argument prevailed it would probably be necessary to exclude the evidence which the appellant company had already obtained in the very mode to which objection was taken by it In the present case, and he added that his client was prepared to accept that eventuality" and also on the following passage at page 139 of the report "Mr. Pal appearing for the respondent contended that in any view of the matter it could not be said that the Subordinate Judge had no jurisdiction and, therefore, the High Court could not interfere. But a Court has to exercise its discretion judicially and as pointed out already judicial exercise of the discretion given under rule 5 is to act in accordance with the reciprocal arrangements arrived at between the Governments, concerned. The Subordinate Judge has no jurisdiction to acts contrary to those arrangements. We, therefore, consider that any evidence obtained on an open commission, as has been issued in the present case, will not have been legally recorded." It is contended on behalf of the respondent that before the decision of the Supreme Court, under the law evidence on commission was valid as held by this Court. That evidence on commission was taken on the 25th April 1954, whereas the decision of the Supreme Court was given on the 30th January 1958. Be that as it may, having in view the decision of the Supreme Court, we are to see whether there is any other evidence in support of the plaintiff's case for equitable mortgage. It is an admitted fact that the defendants opened a current account at first with an initial deposit of Rs. 6,000 and later there was an over‑draft account on the said current account, vide deposition of D. W. 1 Subakaran Rajgoria (defendant No. 2). The defendants have denied the equitable mortgage as alleged by the plaintiff‑Bank. It is the case of the plaintiff that when on the 7th March 1945, the defendants over‑drew to the extent of Rs. 1,08,146‑8‑6, the plaintiff asked the defendants to put in security; that on the 7th March 1945, the defendants by deposit of their title deed created an equitable mortgage ; that they executed a hand‑note Exh. 2 for a sum of Rs. 1,10,000 and on the 8th March 1945 the defendants filed a memorandum admitting that an equitable mortgage was created by them on the 7th March 1945, by depositing their title deed with the Bank. It is the case of the defendants that they did not file the memorandum but handed over to the plaintiff a blank paper signed by them which the plaintiff fraudulently converted into a memorandum and that they did not file the title deed as a security with the plaintiff but only handed over the title deed to the plaintiff in order to show their solvency so that the plaintiff would allow over‑draft on the current account. In order to prove its case, the plaintiff has relied on the evidence of P. W. 1, the cashier and accountant of the plaintiff; P. W. 3 the then Agent of the Bank and some exhibits. P. W. 1 is in service of the plaintiff since 1941 whereas the current account was opened by the defendants on the 1st November 1943 with the plaintiff. He has deposed that the defendants deposited title deed with the plaintiff in order to create equitable mortgage ; that they filed an application signed by defendants 1 and 2 but he was not present at that time and that the endorsement on the back of the pronote was written by defendant No. 2 and signed by defendants 1 and 2 and attested by P. W. 2 Jnanada Charan Chakraborty and one Bhupendra Nath Mallick. P. W. 2 has corroborated P. W. 1 by stating that Exh. 1 the endorsement was written by the defendant No. 2 and signed by defendants Nos. 1 and 2 in his presence and he attested the same. P. W. 1 has further deposed that a kabala was deposited by the defendants with the Bank at the time of equitable mortgage and that they filed an application signed on behalf of the Firm at that time. From the evidence of P. W. 1 that an application for opening the current account was filed and that a memorandum was filed by the defendant showing creation of equitable mortgage on the 7th March 1945 and the admission of the defendants that they signed the memorandum, we are satisfied that an equitable mort gage was created by the defendants by depositing title deed on the 7th March 1945. The case of the defendants that they signed a blank paper and the same was converted into a memorandum by the plaintiff does not stand scrutiny. Hence we find no substance in the defence case that no equitable mortgage was created by them. In this connection next branch of the argument of Mr. Hamidul Huq Choudhury, the learned Advocate for the appellant, is that assuming that there was an equitable mortgage on the 7th March 1945, the evidence on record does not establish that an equitable mortgage was also created for future debt to be incurred by the defendants. It is further contended that mere deposit and possession of title deed with the plaintiff would not create equitable mortgage unless it is proved that there was an intention to create equitable mortgage by deposit of title deed. In support of this contention reliance has been placed on the case of Behram Rashid Irani v. Sorabji Rustamji Elavia, reported in (I L R 38 Bom. 372) the case of Jaitha Bhinsa and another v. Haji Abdul Vyad Oosman reported in (I L R 10 Bom. 634) and the case of Mohini Mohan Saha v. Deb Narain Samanta and others (40 C W N 1277), Mr. Hamidul Huq Chowdhury in support of the aforesaid argument specially relied on the following passage in the report in 40 C W N 1278. "It is well‑settled that in the case of a mortgage by delivery of title deeds, the debt must be proved the deposit of title deeds has to be established; and the intention that the title deeds deposited as a part of the transaction should be security for the debt made out. It may further be taken to be established on authorities that a mortgage by delivery of title deeds as contem plated by law, is not created when the deeds are deposited before any money is advanced with h view to prepare a future mort gage, and there is no express agreement that they shall stand as security for future advances. Title deeds may be deposited under an oral agreement to cover present and future advances. As each advance is made, it becomes a charge upon the property' comprised in the title deeds from the force of the prior oral agreement that it shall be so." We respectfully endorse the above view. The learned Subordinate Judge held that the title deed was deposi ted for the present and future debts to be incurred. Mr. Hamidul Huq argues that the evidence only goes to show that the title deed was deposited as a security for Rs. 1,08,146‑8‑6 as shown by the memorandum and the ledger account Exh. 4 and that the ledger account Exh. 4 shows that Rs. 1,08,146‑8‑6 was satisfied on the 17th April 1946 on which date a credit of Rs. 1,137‑4‑9 stood in the name of the defendants. It appears from the plaint that the defendants were allowed over‑draft to carry on with their business. In paragraph 3 of the plaint a definite allegation has been made that the title deed was deposited on the 7th March 1945, as a security for Rs. 1,08,146‑8‑6 debt due on that date and for further advance upto Rs. 1,10,000 as shown by the promissory note, and in paragraph 4 it has been stated that advances upto the 20th April 1948 were made on the security of the title deed deposited on the 7th March 1945. It has also been alleged that a letter of continuity was written by the defendants to the plaintiff which is missing. No definite denial has been made by the defendants either in their written statement or in evidence but the only assertion that has been made in the written statement is that there was no mortgage by deposit of title deed but only over‑draft. D. W. (defendant No. 2) has only stated that there was no mortgage by deposit of title deed. Exh. 4, ledger account standing in the name of the defendants shows that though there was credit on the 17th April 1946 that was short lived ; that defendant's over‑draft began from the 11th May 1946 and continued up to the 20th April 1948. Exh. 2, the promissory note, shows that it was executed by the defendants for a sum of Rs. 1,10,000 on the date of deposit of the title deed on the 7th March 1945 in excess of the existing debt of Rs. 1,08,146‑8‑

6. This pro‑note was countersigned by the defen dants on the 5th March 1951. On the back of the memorandum tire following endorsement by defendants 1 and 2 occurs "We pay Rs. 1,000 (Rs. one thousand only) today and acknowledge the debt. The security will continue." In our opinion, the above evidence together with the pleadings and the endorsement goes to support the plaintiff's cage and demolishes the case of the defendants. We accordingly hold that C an equitable mortgage was created not only for the existing debt but also for the future debt to be incurred and the claim made by the plaintiff is true. In view of our above finding, the suit as framed is maintainable and we do not find any substance in the contention of Mr. Hamidul Huq that the mortgage suit is not maintainable but a money suit ought to have been instituted. Next comes the question of registration. Mr. Hamidul Huq Chowdhury, the learned Advocate for the appellants, has conten ded that the memorandum or the letter of continuity cannot go into evidence as they are not registered. We do not find any subs tance in this contention also, as the memorandum does not contain the terms of the contract but a mere statement of previous mort gage by deposit of title deed nor is there any evidence that the terms were put into writing. The last ground is on limitation. Mr. Hamidul Huq urges that Article 57 of the Limitation Act will apply in the suit but, in our opinion, Article 85 will apply in the facts of the present case. Exh. 4 the ledger account of the defendant shows the balance due on mutual, open and current account where there have been reciprocal demands between the parties. It appears that some times the defendants over‑drew and thereafter deposited with the Bank by creating credit and liability alternately. This view of our finds support in the case of The Reliance Bank Ltd. v. Prafulla Kumar Banerjee and others, reported in (5 D L R 69). Furthermore, it has been proved by sufficient and reliable evidence that two sums of Rs. 1,000 in cash was put in by tire defendants on the 5th March 1951 and 30th August 1951, vide Exhs. 5 and 5(a). These two documents were signed by the defendant No. 2 of the party which is within three years from 20th April 1948. These two document have not been denied by the defendants. The suit was institute on the 7th August 1952. Hence we find that the suit is not barred by limitation even according to the contention of Mr. Hamidul Huq. In the result, the appeal is dismissed with costs and the judgment and decree of the trial Court are affirmed. IDRIS, J.‑I agree. Appeal dismissed,