LLOYDS BANK LTD V. P.E.

GUZDAR and CO. AIR 1930 Cal.22

PL.SUSITHRA
BA.LL.B-A
 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.
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 mortagaged
the property in like manner to Lloyds Bank to secure another
loan.
 ISSUE
The questions is , which of the two mortgages in the
circumstances is entitled to priority?
 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 toanyone
till the time money is returned to the bank.
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.
 JUDGMENT
Therefore, the court held that under section 78 the
subsequent mortgagee i.e. Lloyds bank would get
priority over national bank