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1(c)2014 MD HAROON RASHEED, ADVOCATE
By,
MOHAMMED HAROON RASHEED
B.A.LL.B (Hons.), [BSW] & [LLM]
Advocate
Email ID: adv.mdharoon@gmail.com
Facts
 The defendant firm P.E. Guzdar & Co. mortgaged 42,
Chowringhee Road, Calcutta, to the National Bank of
India by delivery of the title deeds to secure an
overdraft in their current account with the bank.
 But later he asked the bank to give him back the title-
deed so that he may show it to intending purchaser.
2(c)2014 MD HAROON RASHEED, ADVOCATE
 He further said that only after selling the property he
can satisfy the debt of the bank.
 Believing on his words bank handed over the title-
deeds to him.
 Having regained possession of the title deeds, he
mortgaged the property in like manner to Lloyds Bank
to secure another loan.
3(c)2014 MD HAROON RASHEED, ADVOCATE
Issue
 The question is, which of the two mortgages in the
circumstances is entitled to priority?
4(c)2014 MD HAROON RASHEED, ADVOCATE
Analysis and law
 Transfer of Property Act (4 of 1882), Sections 48, 58,
59, 78, 79.
 Normally the intending purchaser goes to the creditor
having possession of title deeds , and confirm the title
by inspecting it.
 The bank is not supposed to handover the deed to
anyone till the time money is returned to the bank.
5(c)2014 MD HAROON RASHEED, ADVOCATE
 But the bank has committed gross-negligence by
returning the title-deed to the respondent.
 Thereby giving opportunity to induce another person
to advance money
6(c)2014 MD HAROON RASHEED, ADVOCATE
Judgment
 Therefore, the court held that under section 78 the
subsequent mortgagee i.e. Lloyds bank would get
priority over national bank.
7(c)2014 MD HAROON RASHEED, ADVOCATE
8(c)2014 MD HAROON RASHEED, ADVOCATE

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Llyods Bank case

  • 1. 1(c)2014 MD HAROON RASHEED, ADVOCATE By, MOHAMMED HAROON RASHEED B.A.LL.B (Hons.), [BSW] & [LLM] Advocate Email ID: adv.mdharoon@gmail.com
  • 2. Facts  The defendant firm P.E. Guzdar & Co. mortgaged 42, Chowringhee Road, Calcutta, to the National Bank of India by delivery of the title deeds to secure an overdraft in their current account with the bank.  But later he asked the bank to give him back the title- deed so that he may show it to intending purchaser. 2(c)2014 MD HAROON RASHEED, ADVOCATE
  • 3.  He further said that only after selling the property he can satisfy the debt of the bank.  Believing on his words bank handed over the title- deeds to him.  Having regained possession of the title deeds, he mortgaged the property in like manner to Lloyds Bank to secure another loan. 3(c)2014 MD HAROON RASHEED, ADVOCATE
  • 4. Issue  The question is, which of the two mortgages in the circumstances is entitled to priority? 4(c)2014 MD HAROON RASHEED, ADVOCATE
  • 5. Analysis and law  Transfer of Property Act (4 of 1882), Sections 48, 58, 59, 78, 79.  Normally the intending purchaser goes to the creditor having possession of title deeds , and confirm the title by inspecting it.  The bank is not supposed to handover the deed to anyone till the time money is returned to the bank. 5(c)2014 MD HAROON RASHEED, ADVOCATE
  • 6.  But the bank has committed gross-negligence by returning the title-deed to the respondent.  Thereby giving opportunity to induce another person to advance money 6(c)2014 MD HAROON RASHEED, ADVOCATE
  • 7. Judgment  Therefore, the court held that under section 78 the subsequent mortgagee i.e. Lloyds bank would get priority over national bank. 7(c)2014 MD HAROON RASHEED, ADVOCATE
  • 8. 8(c)2014 MD HAROON RASHEED, ADVOCATE