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Judgment
R.N. Misra, J.—M/s. Orissa Bank Limited under liquidation represented through the Official Liquidator has sued for realisation of a loan with interest on the basis of a mortgaged security and for foreclosure in respect of the properties mortgaged with the Bank by Defendants under the mortgage bond dated 17-5-1948. Under the mortgage bond, Defendants borrowed a sum of Rs. 3, 500/ - on security of the properties described in the schedule to the bond. On 3-9-1948, 11-1-1949, 14-3-1950, 27-3-1950 and 3-4-1951, Defendants paid Rs. 100/ -. Rs. 50/ -, Rs. 160/ -, Rs. 53.50 and Rs. 200/ - respectively, but failed to pay the balance amount. On 12-7-1952, Plaintiff-Bank adopted a special resolution for voluntary liquidation. On 25-7-1953, T.M.S. 53 of 1953 was filed in the Court of the learned Subordinate Judge at Cuttack for realisation of the dues. That suit was dismissed on 20-10-1965 for default of both parties. In July, 1966, this Court appointed the Official Liquidator to continue the winding up proceeding. On 3-4-1973, Plaintiff instituted O.S. No. 1 of 1973 on the same cause of action but the suit was dismissed on 26-6-1973 for failure of the Plaintiff to file the requisites for notice to Defendants On 18-12-1975, the present suit was instituted for recovery of a sum of Rs. 10, 832/ - representing the principal mortgage dues together with interest.
Notice in the suit was taken to Defendants who are father and son respectively. In spite of service, Defendants did not appear. On 29-1-1976, they were set ex parte and the suit was posted for trial.
Though formal issues have not been raised in view of the fact that no contest was entered, the following questions arise for consideration:
Whether Defendants took the loan in question on execution of the mortgage bond?
Is the suit in time?
Is the suit maintainable?
Is the Plaintiff entitled to the amount claimed?
Question No. 1.
P.w. 2 is the scribe of the mortgage bond and has proved the same. P.w. 1, the authorised agent of Plaintiff-Bank, has also supported the evidence of p.w. 2. Relying upon the Proviso to Section 68 of the Evidence Act, no attesting witness has been examined. On the basis of the evidence of the p. ws. I find that Ext. 1 is a mortgage bond duly executed by Defendant No. 1 for himself and as father guardian of Defendant No. 2 who was then a minor.
Question No. 2.
The mortgage bond is dated 17-5-1948. The first suit in the Court of the Subordinate Judge at Cuttack was filed on 25-7-1953. It was dismissed on 20-10-1965 and O.S. No. 1 of 1973 was filed in this Court on 3-4-1973 but was dismissed on 26-6-1973. The present suit has been filed on 18-12-1974. Article 62 of the new Limitation Act is applicable as the suit has been filed in 1974 and the suit was required to be filed within twelve years from the date when money became due. The corresponding Article under the old Limitation Act of 1908 was Article 132 which made a similar provision so far as limitation was concerned. Under the terms of the mortgage bond, Defendants undertook to pay the full amount within six months. The suit was, therefore, within time if filed by 17-11-1960. This suit having been filed in 1974 would ordinarily be barred by limitation. Reliance is, however, placed on provisions of Section 45.0 of the Banking Regulation Act of 1949. Section 45.0(1) of the Act provides:
Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (9 of 1908), or in any other law for the time being in force, in computing the period of limitation prescribed for a suit or application by a banking company which is being wound up, the period commencing from the date of the presentation of the petition for the winding up of the banking company shall be excluded.
In the case of Sree Bank Ltd. Vs. Sarkar Dutt Roy and Co., , the scope of Section 45 of the Banking Regulation Act has been clearly indicated. The special resolution for voluntary liquidation was adopted on 12-7-1952. Under the provisions of Section 204 of the Companies Act, 1913, which was then in force, a voluntary winding up shall be deemed to have commenced at the time of the passing of the resolution for voluntary winding up Section 441 of the Companies Act of 1956 is the corresponding provision running thus:
(1) Where, before the presentation of a petition for the winding up of a company by the Court, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution and unless the Court, on proof of fraud or mistake, thinks fit to direct otherwise, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.
(2) ...
In the present case, therefore, winding up proceedings must be deemed to have commenced on 12-7-1952 and in view of the provisions in Sub-section (1) of Section 45 of the Banking Regulation Act, the suit would not be barred by limitation.
Question No. 3.
As already indicated, proof to the filing of the present suit, Plaintiff had filed similar suits on the same cause of action on two occasions. The first was M.S. 53 of 1953 in the Court of the Subordinate Judge at Cuttack which was dismissed on 20-10-1965. From the order-sheet of that suit which has been brought before this Court, the following order appears to have been passed while dismissing the suit:
No other step taken by the parties and they are absent on calls. The suit is accordingly dismissed for default of both parties.
Such a dismissal is squarely covered under Order 9, Rule 3 of the Code of CPC which provides:
Where neither party appears when the suit is called on for hearing, the Court may make an order that the suit be dismissed.
Rule 4 of Order 9 of the Code as far as relevant provides:
Where a suit is dismissed under Rule 2 or Rule 3 the Plaintiff may (subject to the law of limitation bring fresh suit, or he may apply for an order to set the dismissal aside, ....
the dismissal of the suit by the learned Subordinate Judge, therefore, does not affect the maintainability of the suit. Before instituting the present suit, Plaintiff had filed O.S. No. 1 of 1973 before this Court on the same cause of action on 3-4-1973 and that suit was dismissed on 26-6-1973 for non-payment of process fees. The order of dismissal appears to be squarely covered under Order 9, Rule 2 of the Code of CPC which provides:
Where on the day so fixed it is found that the summons has not been served upon the Defendant in consequence of the failure of the Plaintiff to pay the Court-fee or postal charges (if any) chargeable for such service, the Court may make an order that the suit be dismissed:
Provided....
In regard to such dismissal Rule 4 of the Code also applies. The dismissal of the two earlier suits based on the same cause of action does not affect the present suit once it is found that Plaintiff''s claim is not barred by limitation. I would accordingly find that the present suit is maintainable.
Question No. 4.
P.w.1 has stated that the Plaintiff-Bank was registered as a money-lender under the Orissa Money-Lenders Act. Section 2(a) defines a "Bank" to mean "a company carrying on the business of banking". The transaction in question is a secured loan as defined in Section 2(b) of the Money-Lenders Act. u/s 10 of the said Act:
Notwithstanding anything to the contrary contained in any other law or in anything having the force of la w or in any contract, no Court shall in any suit whether brought by a money-lender or by any other person in respect of a loan advanced before or after the commencement of this Act, pass a decree for an amount of interest for the period preceding the institution of the suit which together with any amount already realised as interest through Court or otherwise, is greater than the amount of the loan originally advanced.
Section 10 thus contains the principle of damdupat. As indicated by this Court in the case of P.S.N. Murty v. D.V. Suryanarayana 12 (1966) C.L.T. 264, this principle is not applicable to pendente lite interest. It is conceded by counsel for the Plaintiff that the Money-Lenders Ad applies to the transaction in question. Therefore, Plaintiff is not entitled to recover by way of interest a sum equal to the principal amount up to the date of institution of the suit including amounts already realised out of it. Plaintiff shall be entitled to pendente lite interest at nine per cent and future interest until recovery at six per cent Plaintiff is, therefore, entitled to a decree for 3.500/ - being the principal amount and a sum of Rs. 2,996.50 paise (taking into account payments of Rs. 503.50 as admitted by Plaintiff) by way of interest, thus totalling Rs. 6,496.50 paise. The principal decretal dues shall bear interest at nine per cent pendente life and six per cent from this day until date of recovery.
Plaintiff shall, however, not be entitled to any costs of the litigation on account of the following reasons:
(i) Defendants have not entered contest;
(ii) Plaintiff has been very negligent in suing for recovery of its dues. As already stated, two earlier suits were dismissed; and
(iii) In the present suit, trial whereof is ex parte, Plaintiff and his counsel have been equally negligent.