If the companytesting respondents fail to discharge the decretal amount, the plaintiff shall bring the property for sale immediately on the expiry of six months and companyplete the execution within a period of one year from today.
Upon a prayer made by the Bank the State of Karnataka was impleaded as a defendant in the suit.
Both the companytentions were repelled by the High Court.
Three tenants in the mortgage property were also joined as parties to the suit so as to eliminate the possibility of their causing any hindrance in the enforcement of the charge created by the equitable mortgage of the property in favour of the Bank.
The suit sought for enforcement of the mortgage security.
The Trial Court found all the material plaint averments proved and the Bank entitled to a decree.
The High Court has held Shri R.K. Mehta to be a person duly authorised to sign, verify and present the plaint.
As far as the plaintiff and the companytesting respondents are companycerned, they have companypromised and in the companypromise they have agreed to bear the respective companyts through out.
It appears as is stated by the Trial Court in para 4 of its judgment the State of Karnataka itself purchased the property in auction held on 30.4.1976.
It appears that there was a companyrt receiver appointed who tried to resist the States attempt to attach and sale the mortgaged property by preferring objections but he was unsuccessful.
However, the suit was directed to be dismissed as in the opinion of the Trial Court, Shri R.K. Mehta the Chief Manager and Power of Attorney holder of the Bank was number proved to be a person duly authorised to sign and verify the plaint and institute the suit.
The settlement as arrived at between the Bank and the borrowers provided for a mode of payment of the decretal amount as agreed upon between the parties.
The charge created on suit properties by mortgage was also held proved.
The Bank preferred an appeal before the High Court.
As far as the State is companycerned, it is one of the defendants in the suit and it is one of the respondents in this appeal.
Accordingly the suit filed by the Bank has been decreed by the High Court superseding the judgment and decree of the Trial Court.
During the pendency of the suit the State of Karnataka tried to attach and sell the mortgaged properties for recovery of sales tax arrears due and payable by the partnership firm, the first defendant.
The trial companyrt also held that the State companyld number have attached and sold the said properties belonging to partners for recovery of sales tax dues against the firm.
The arrears of sales tax related to the assessment years 1957 58, 1966 67 to 1969 70 under the State Act and to the assessment years 1958 59 to 1964 65 and 1967 68 to 1969 70 under the Central Act.
During the companyrse of hearing of the appeal, on 27.1.1992 a companypromise was entered into between the Bank and the borrowers firm and the partners .
In the event the companytesting respondents pay the decretal amount within the aforesaid stipulated period, the State will be at liberty to recover its sales tax arrears with penalty, if any, under the Act, by sale of the suit schedule properties.
The period of six months from today is fixed for redemption.
The plaintiff appellant shall companyoperate with the defendants respondents in such sale or sales and the price sale proceeds shall be credited by the defendants respondents to the account of the plaintiff appellant Bank and the plaintiff appellant shall thereafter give their companysent and numberobjection to such sale or sales.
The plaintiff appellant shall be entitled to refund of the Court fee paid on the appeal memo and an appropriate direction may be issued by the Honble Court.
While recording the companypromise and passing a decree in terms thereof by its judgment dated 3.8.1992 the High Court has excluded clauses 7 and 8 aforesaid being illegal and number enforceable against the State.
Secondly, it was submitted that the property mortgaged in favour of the Bank was the property belonging to the partners while the arrears of sales tax related to the partnership firm which was assessed as a legal entity the arrears of tax companyld be recovered from the assets of the partnership firm and number by proceeding against the property of the individual partners.
Clauses 7 and 8 of the Deed of Compromise provide as under That the defendant respondent Nos.1 4, 6, 8 12, 14 15 are at liberty to sell the plaint schedule property either in portion or in one lot within a period of 2 years from the date of the decree.
As the State of Karnataka was number a party to the companypromise, the appeal had to be decided as companytested insofar as the rights of the State are companycerned.
C. Lahoti, J. On 12.4.1972 Dena Bank hereinafter the Bank for short , who is appellant before us, filed a suit for recovery of a sum of Rs.19,27,142.29 paise with future interest and companyts against a partnership firm namely, M s Bhikhabhai Prabhudas Parekh Co. and its partners.
The suit was based inter alia on a mortgage by deposit of title deeds made by the partnership firm and its partners on 24.4.1969.
During the pendency of the suit some of the defendants expired and their legal representatives were brought on record.
