Bangalore District Court
Gaurav Rose Real Estate Pvt Ltd Rep By Its ... vs Blue Horizon Hotels Pvt Ltd Rep By A.C ... on 1 April, 2026
KABC170012282021
IN THE COURT OF LXXXIV ADDL. CITY CIVIL &
SESSIONS JUDGE, AT BENGALURU (CCH-85)
(Commercial Court)
THIS THE 1st DAY OF APRIL 2026
PRESENT:
SRI. ANAND T. CHAVAN. B.Com.,LL.B.(Spl.)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.OS.No.25855/2017
Plaintiff:- M/s Gaurav Rose Real Estate Pvt.
Ltd. A Company incorporated under the
Companies Act, 1956
Having its registered office at
No.9/12, Lal Bazar Street,
Merchantile Building,
Block-E, 2nd floor, Kolkata-700 001.
Rep. by its Authorized Signatory
Rohan Agarwal
(Rep by M/s AKS Law Associates -Advocate)
V/s
2 Com.OS No.25855/2017
Defendants:- M/s Blue Horizon Hotels Pvt. Ltd.
A company incorporated under the
Companies Act, 1956,
Having registered office at:
No:172/1, Srinivas Industrial Estate,
N.S.Palya, Bannerghatta Road,
Bengaluru-560076
Rep. by its Directors
A.C.Srinivas Raju and A.M.Ramaraju
2. M/s. Phoenix ARC Pvt. Ltd.,
A Company incorporated under the
Companies Act, 1956, Having its
Registered Office at 7th Floor,
Dani Corporate Park, 158 CST Road,
Kalina Santacruz (E),
Mumbai-400 098.
Rep by its Senior Associate
Vaibhav Maheshwari.
3. M/s. Edelweiss Asset
Reconstruction Company Ltd.
A Company incorporated under the
Companies Act, 1956, Having its
Registered Office at Edelweiss House,
of CST Road, Kalina, Mumbai-400 098.
Rep by its Managing Director,
Siby Antony.
4. M/s. A.S Muniswamy Raju
Hindu Undivided Family,
Rep by its Kartha,
3 Com.OS No.25855/2017
Mr. A.M. Raju,
S/o Late A.S Muniswamy Raju,
Aged about 72 years,
R/at No.536, 10th Main,
5th Block, Jayanagar,
Bengaluru-560 041.
5. M/s. Green Park Hotels & Resorts
Ltd., Having Registered Office at
4th Floor, Hotel Green Park,
Greenland, Begumpet,
Hyderbad-560 016, Telangan.
Rep by its Director,
Mr. B. Gautam.
6. M/s. Oriental Hotels Ltd.,
Having Registered Office at
Taj Coromandel, 37,
Mahatma Gandi Road,
Chennai-600 034.
Rep by its Authorized Signatory,
Mr. Sanjay Kumar Gupta.
(D1 rep. by Mr. Ajesh Kumar S- Adv)
(D2 rep. by Sri. B.C Avinash- Adv)
(D3 rep. by VGB Associates- Adv)
(D4 rep. by Sri. Prathap K.- Adv)
(D5 rep. by J.Sagar Associates- Adv)
(D6 rep. by Kochha & Co.,- Adv)
Date of Institution of the 25.07.2017
suit
4 Com.OS No.25855/2017
Nature of the suit (suit on
pro note, suit for Suit for recovery of Money
declaration & Possession, and for declaration.
Suit for injunction etc.)
Date of commencement of 24.07.2023
recording of evidence
Date on which judgment 01.04.2026
was pronounced
Total Duration Year/s Month/s Day/s
08 08 07
LXXXIV Addl.City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
The plaintiff has filed present suit against defendants seeking following reliefs:-
(a) To direct the 1st Defendant Company being M/s. Blue Horizon Hotels Pvt. Ltd., and the 4 th Defendant HUF represented by Mr. A.M Rama Raju Kartha of the HUF Jointly and Severally pay the plaintiff a sum of Rs.5,00,00,000/- as per Deed of Mortgage dated 04.04.2014 executed by 1 st Defendant in favour of the Plaintiff along with interest on the said sum at 24% per annum commencing from the date of payment of the total loan amount i.e., 25.05.2012 till the date of realization.5 Com.OS No.25855/2017
(b) To declare that the Mortgage Deed dtd.28.05.2015 executed by Defendant No.1 M/s.
Blue Horizon Hotels Pvt. Ltd., in favour of Defendant No.2 M/s. Phoenix ARC Private Limited and Defendant No.3 M/s. Edelwiss Asset Reconstruction Company Limited is not binding on the Plaintiff and its rights under the Mortgage Deed dated 04.04.2014.
(c) In the event of Defendant Nos.1 and 4 failing to repay the sums due to the Plaintiff, to direct the sale of the Suit Schedule Property belonging to the Defendant Nos.1 and 4 and to direct that the sums owed to the plaintiff are paid from the sale proceedings.
2. The brief averments of plaint are that:
The plaintiff is a company incorporated under Companies Act 1956. During May 2012 defendant No.1 approached plaintiff and sought for a business loan of Rs.5 Crores to fund its business M/s. Blue Horizon Hotels Ltd. Since said defendant was unable to repay the said money along with interest at the rate of 24% per annum, said defendant sought for more time and also unconditionally agreed to repay the said amount in fresh timeline. The parties agreed to the timelines for repayment of said amount and 6 Com.OS No.25855/2017 interest and in pursuant to the same, defendant No.1 executed a deed titled as Mortgage Deed dtd.04.04.2014 by admitting its liability. The plaintiff paid adequate stamp duty to Registrar Jayanagar on 08.06.2017 for sum of Rs.5,15,000/- by virtue of demand draft No.011844 of Axis Bank Bengaluru. As admitted in the terms of Mortgage Deed, plaintiff had paid aforesaid sum of Rs.5 Crores to said defendant in following manner:-
Sl.No. Cheque Date Cheque No. Amount (Rs.)
1. 22/05/2012 150171 2,00,00,000=00
2. 24/05/2012 150172 2,00,00,000=00
3. 25/05/2012 150173 1,00,00,000=00 TOTAL 5,00,00,000=00 Defendant No.1 agreed to repay the said loan within 120 days from date of execution of said deed, that is on or before 04.08.2014. It further agreed to pay interest at the rate of 24% per annum on said amount from May 2012, the date on which said sum was paid to the defendant. The suit schedule land is owned by defendant No.4 Hindu Undivided Family of A.S Muniswamy Raju and said defendant is not only 7 Com.OS No.25855/2017 bound by Mortgage Deed, but they agreed to subject the said land to the liability of defendant No.1 company. Defendant No.1 company put up a building known as Vega City Mall comprising of theaters, shopping areas, hotels, offices and other developments. By execution of aforesaid Mortgage Deed, the defendant No.1 and 4 subjected the said land and building to the liability owed to plaintiff and in case of default committed by defendant No.1, the said land and building shall be subjected to sale for recovery of sums due to the plaintiff. It is further averred that till date plaintiff has neither received the said sum nor defendant No.1 has paid the interest due on it. Defendant No.1 company failed and neglected to repay the said amount with interest and as such the security offered by the defendant No.4 is liable to be liquidated to meet the debts of plaintiff.
Though as a business enterprise, plaintiff had opportunity to utilize the above sums and it would have earned sum not less than 36% per annum, it has restricted its claim to the extent agreed in 8 Com.OS No.25855/2017 Mortgage Deed. Subsequently plaintiff caused a legal notice dtd.18.12.2015 to defendant No.1 company calling upon it to repay the said sum of Rs.5 Crores with interest at the rate of 24% per annum calculated quarterly from 25.05.2012 to 20.12.2015 amounting to Rs.5,86,77,568/-, which is arrived at Rs.10,86,77,568/-. Instead of complying said notice, defendant No.1 chose to send a vague reply dtd.30.01.2016 taking untenable contentions without repaying the said amount, while categorically admitting and acknowledging receiving of Rs.5 Crores by defendant No.1 company in the year 2012 and also by admitting execution of the above Mortgage Deed. Hence defendant No.1 company and its promoter A.M Raju being kartha of defendant No.4 having committed breach of agreed terms of Mortgage Deed are liable to the aforesaid sums along with agreed interest and failing which the suit schedule land and building would have to be put for sale for recovery of money due to the plaintiff.
9 Com.OS No.25855/2017It is further averred that as per Clause No.3 of Mortgage Deed, the defendant No.1 company has deposited copies of title documents in respect of schedule A property. Further defendant No.1 company had agreed to obtain signatures from all those persons necessary to further more perfectly assuring to mortgage the suit schedule property and defendant No.1 company had also permitted to plaintiff to enter into the suit schedule property at any point of time for inspection and they had agreed not to alienate the same. As per Clause No.6 of Mortgage Deed, defendant No.1 company has to repay the loan amount to plaintiff before repayment date and in case of failure of defendant No.1 company to repay the loan, it is lawful for plaintiff to sell the suit schedule property or any part thereof in public auction or private agreement in the manner and terms deemed fit and proper, without being answerable for loss of diminution of price occasioned thereby and to do all other acts for completing the 10 Com.OS No.25855/2017 sale for recovery of loan. Defendant No.4 is aware and bound by the said Clause.
It is further averred that, contrary to Clause No.11 of Mortgage Deed dtd.04.04.2014, first defendant executed a Mortgage Deed dtd.28.05.2015 in favour of defendant Nos.2 and 3 companies, without notifying execution of the same to plaintiff, with sole intention to defeat the claim of plaintiff. However since the Mortgage Deed of plaintiff is executed prior to above Mortgage Deed, claim of plaintiff precedes the defendant Nos.2 and 3 to realize sum of money from suit schedule property. Hence the deed of mortgage executed in favour of defendant Nos.2 and 3 are not binding upon plaintiff and it does not dilute right of plaintiff over suit schedule property and remedies thereof. It is further averred that plaintiff has already filed winding up petition against defendant No.1 before Hon'ble High Court of Karnataka in Company Petition No.161/2016 and notice has been issued to said defendant in said case. Further in view of having offered suit schedule 11 Com.OS No.25855/2017 property as security under above Mortgage Deed, defendant No.1 is bound to register the same before concerned Sub-Registrar and in the event it fails to registered the same, this court may register the said document as security towards aforesaid loan of Rs.5 Crores and interest due thereon. It is further averred in plaint that, as on 18.12.2015 defendant No.1 is liable to pay total sum of Rs.10,86,77,568/- towards above dues with interest at the rate of 24% per annum. Plaintiff issued one more letter through their lawyer on 09.02.2016 demanding payment of said amount. Defendant No.1 by reply dtd.26.02.2016 while admitting their liability, has failed to pay said amount. It is further averred that, Defendant No.4 being owner of land described in suit schedule A property by signifying their readiness and willingness to repay the loan had offered the said property as a security to above loan vide above Mortgage Deed. Plaintiff learned about execution of deeds in favour of defendant Nos.2 and 3 after receiving aforesaid reply dtd.26.02.2016, for which no consent of plaintiff was 12 Com.OS No.25855/2017 sought and defendant Nos.1 and 4 were estopped from creating further interest or charge as per Clause No.11 of the Mortgage Deed. It is further averred that as per extension of Mortgage Deed dtd.28.05.2015, defendant No.4 represented by A.M Ramaraju, Kartha of A.S Muniswamyraju HUF has offered said land as a surety on mortgage to defendant No.2 and 3. Additionally defendant No.4 offered to part with suit schedule property in order to repay the amount due to plaintiff. Hence defendant Nos.2 and 3 could not have executed the said deed without consent of plaintiff. Further katha of 4 th defendant by name A.M Ramaraju is also the promoter director of 1st defendant company. Hence liability of defendant Nos.1 and 4 to repay the loan is joint and several. These amongst other grounds, it is prayed to decree the suit as prayed for.
3. Defendant Nos.1 to 6 have appeared in pursuant to summons and defendant Nos.1, 3, 4 and 5 have filed their separate written statements. However 13 Com.OS No.25855/2017 defendant Nos.2 and 6 have not chosen to contest the suit by filing their written statement.
4. Defendant No.1 Blue Horizon Hotels Pvt Ltd., has averred in it's written statement that, suit is not verified in accordance with law and existence of board resolution dated 08.01.2016 authorising it's representative is not admitted. However defendant no.1 has specifically admitted in para No.2 of it's written statement that, aforesaid amount of Rs.5,00,00,000/- (Rupees Five Crores) had been advanced, but it denies that it had agreed to pay interest of 24%. Defendant No.1 has further denied the averments of plaint that it unconditionally agreed to pay the loan in fresh timeline with interest and executed the aforesaid Mortgage Deed dtd.04.04.2014 by acknowledging the said debt. Defendant No.1 has seriously denied and disputed the validity, correctness and genuineness of aforesaid Mortgage Deed and it denies to know payment of stamp duty on it by plaintiff. It is further averred that no such document was executed by admitting the 14 Com.OS No.25855/2017 debt and no terms of repayment were agreed in said document. Defendant No.1 has further denied that in terms of said Mortgage deed aforesaid sum of Rs.5 Crores was paid, but it admits receipt of said amount. Further defendant No.1 has specifically denied the execution of aforesaid Mortgage Deed and asserts that since the claim has become time barred all other statements such as existence of mortgage are made only to overcome question of limitation.
5. Defendant No.1 has further contended that the Mortgage Deed is not registered and as such same cannot be looked into. Defendant No.1 never represented that it is the owner of schedule property and no point of time it has created the above mortgage. The averments of plaint that defendant No.1 agreed to repay the loan within 120 days from said Mortgage Deed with interest at the rate of 24% per annum, the correctness of ledger account and averments that defendant No.1 is promoted by 4 th defendant are denied in toto. Defendant No.1 has further stated that suit schedule property does not 15 Com.OS No.25855/2017 belong to defendant No.4 and said defendant is neither a party nor a signatory to said transaction. Hence said mortgage is not tenable and plaintiff has no right to right in respect of schedule property. It is further averred that since the suit is barred by limitation, plaintiff is prohibited from seeking any remedy from the court. It is further averred that absolutely there is no reference about defendant No.4 in legal notice dtd.18.12.2015 and assuming lapses on the part of defendant No.1 in repayment of loan, schedule property cannot be availed since it does not belong to defendant No.1 and defendant No.4 has not offered it as security. It is further averred that defendant No.4 is not a guarantor and when there is no jural relationship pleaded, contention of mortgage which is contrary to law cannot be accepted. Further though defendant No.1 has admitted issuance of legal notice dtd.18.12.2015, it asserts to have replied said notice and it denies that it had admitted execution of above Mortgage Deed. It is further averred that there is no 16 Com.OS No.25855/2017 privity of contract between plaintiff and defendant No.4 and as such committing of any default by said defendant does not arise. Further the law does not permit the mortgage of property without legal necessity. Defendant No.1 has further denied the depositing of copies of title documents of schedule property and said defendant agreed to obtain signatures of others on mortgage. Further the averments of plaint that plaintiff was permitted to inspect the suit property and defendant No.1 had agreed not to alienate the same are denied and it is further contended that the suit is misjoinder for impleading of defendant Nos.2 to 4. It is further averred that the law does not enable the court to cause registration of document and more so such relief would be barred by time. Further there was no agreement to pay interest and entire claim of plaintiff for Rs.10,86,77,568/- are denied. It is further averred that statements of defendant No.1 in reply dtd.22.06.2016 do not bind defendant No.4 and suit is barred by law. It is further averred that date of 17 Com.OS No.25855/2017 registration of Mortgage Deed is blank and same is not registered. Further since the above amount was paid on 22.05.2012, 24.05.2012 and 25.05.2012, the claim of plaintiff is barred by virtue of limitation as on 25.05.2015 since the very legal notice is issued on 18.12.2015. Further there is no plea of acknowledgment of liability. These amongst other grounds defendant No.1 has prayed for dismissal of the suit.
6. Defendant No.3 has filed its separate written statement, wherein its averred that the suit of plaintiff is not maintainable and same is liable to be dismissed. Defendant no.3 has denied the entire averments of the plaint with regard to aforesaid loan transaction, execution of Mortgage Deed by defendant No.1, liability of defendant Nos.1 and 4 to repay the loan. It is further averred that the above story is concocted in order to extract money from defendant No.3 and plaintiff has no locus to demand money from this defendant. Defendant No.3 has denied the entire case of plaintiff in its para wise 18 Com.OS No.25855/2017 remarks. It is further contended by defendant No.3 that there is no cause of action to file present suit and plaintiff is not entitled for discretionary relief of recovery of money and cancellation of Mortgage Deed dtd.28.05.2015 executed in favour of this defendant.
7. Apart from above averments, defendant No.3 has contended that State Bank of Mysore, Bank of India and State Bank of India sanctioned financial facility of Rs.97 Crores and Rs.112 Crores to defendant No.1 and said defendant has executed loan and security documents in favour of said banks. Thereafter State Bank of Mysore and Bank of India who are collectively referred as assignor banks have assigned debt of borrower along with interest, rights and underline security in favour of defendant No.3 vide Assignment Agreement dtd.29.03.2014 and 30.10.2013 respectively. In pursuant to said Assignment Deed, defendant No.3 stepped in to shoes of assigner banks under Sec.5(2) of SARFAESI Act. Thereafter State Bank of India appointed the 19 Com.OS No.25855/2017 lead bank by the members of consortium and mortgaged documents were executed and held by the lead bank on behalf of all lenders. Subsequently SBI assigned all debts along with rents to defendant No.2 Phoenix ARC and schedule A and B of the suit are mortgaged in favour of all consortium lenders vide memorandum of entry dtd.06.12.2008 and 29.08.2012. It is further averred that no permission was sought by defendant No.1 to create mortgage in favour of plaintiff in 2014 and the mortgage created in favour of consortium lenders were prior in time. These amongst other grounds defendant No.3 has prayed for dismissal of the suit.
8. Defendant No.4 has filed its written statement, by contending that, it does not know whether 1st defendant has taken money from plaintiff and whether there was any agreement to pay interest. Defendant No.4 has specifically denied that defendant No.1 had sought time and unconditionally agreed to repay the loan in fresh timeline with interest. Defendant No.4 has also denied execution 20 Com.OS No.25855/2017 of aforesaid mortgage deed by defendant No.1 and asserts non-entitlement of said defendant to execute the same as property does not belonged to it. Defendant No.4 has also denied the alleged acknowledgment of debt by defendant No.1 and the genuineness of above Mortgage Deed. It has also contended that the suit is barred by limitation. Defendant No.4 has reiterated the averments of written statement of defendant No.1 denying that defendant No.4 being promoter of defendant No.1, it is liable to pay the suit loan in pursuant to Mortgage Deed. Defendant No.4 has further contended that though the schedule property belongs to it, it is not a party to the suit transaction nor it is not a party or a signatory to above Mortgage Deed. It is further contended by defendant No.4 that plaintiff has no right over suit schedule property and since said property was not offered by this defendant, it is not entitled for relief claimed in the suit. Defendant No.4 has also asserted that it is not a guarantor to aforesaid loan and there is no privity of contract 21 Com.OS No.25855/2017 between plaintiff and said defendant. The averments of plaint that defendant No.4 had signified its readiness and willingness to repay the loan are denied and it is also denied that defendant No.4 was estopped from creating charge or interest and HUF properties cannot be mortgaged without family necessity, which is absent as per plaint averments. These amongst other grounds, defendant No.4 has prayed to dismiss the suit with exemplary costs.
9. Defendant No.5 GreenPark Hotels and Resorts, who appears to be pendent lite purchaser of portion of suit schedule property, from defendant no.1, has also denied the entire averments of plaint in its written statement and it has contended that said defendant is a company incorporated under Companies Act by engaging itself in hospitality services. Defendant No.5 has further contended that, it has no direct connection with dispute raised by plaintiff, which pertains to alleged recovery of money by plaintiff from defendant Nos.1 to 4. It is further averred that no allegations have been made against 22 Com.OS No.25855/2017 defendant No.5 and entire transaction has arisen between plaintiff and defendant Nos.1 to 4. The role of this defendant is extremely limited. Further defendant No.5 has narrated with regard to filing of two interim applications by plaintiff restraining defendant Nos.1 to 4 by alienating suit properties and restraining their tenants from carrying any commercial operations in schedule premises. This court dismissed said applications on 28.04.2018 with certain observations with regard to aforesaid dispute between plaintiff and defendant Nos.1 to 4, which as on the date stands valid, since plaintiff has not chosen to challenge said order. Further while deciding the above applications, this court has observed with regard to dispute between the plaintiff and defendant Nos.1 to 4 that value of the building on schedule property is more than Rs.5 Crores and this court further concluded that plaintiff cannot prevent said defendants from executing any sale deed or any nature of conveyance deeds with third party. It is further averred that, this court held that in the event 23 Com.OS No.25855/2017 defendant Nos.1 to 4 are restrained from alienating said properties, they will be put to hardship and accordingly the injunction applications were dismissed. Thus by said order, this court permitted defendant Nos.1 to 4 to create third party interest and to sell building or portions of schedule property to third parties.
10. It is specific contention of defendant No.5 that, in the light of above background, said defendant purchased portion of schedule property described as hotel property under Sale Deed dtd.17.07.2019 from defendant No.4 and defendant No.1 as confirming party to the same. Further defendant No.5 purchased said property by following due legal course and by way of abundant cautions by issuing public notices by specifying details of property and its intention to purchase the same. They have issued public notices on 02.08.2018 and 17.05.2019 in leading English and Vernacular Newspapers regarding purchase of such properties. Further title of schedule property concerning to defendant No.5 is not disputed and 24 Com.OS No.25855/2017 same has been legally and validly purchased by it. Further defendant Nos.1 to 4 have validly challenged the Mortgage Deed relied upon by plaintiff and defendant No.5 is not party to the same. Hence this defendant cannot certify the contents and validity of said Mortgage Deed. Further defendant No.5 was not privy to correspondence and discussions taken place between plaintiff and defendant Nos.1 to 4, since there is no privity of contract between plaintiff and this defendant and there was no exchange of communications or instructions by either party. It is further averred that arrangement agreed between plaintiff and defendant Nos.1 to 4 was not known to defendant No.5 including execution of Mortgage Deed or terms thereof. Hence defendant No.5 cannot made liable for breach of contractual obligations of defendant Nos.1 to 4 and suit is liable to be dismissed in respect of defendant No.5. Further the case of plaintiff is neither with regard to suit schedule property nor dispute is raised about its ownership. The dispute is purely a money recovery 25 Com.OS No.25855/2017 dispute and defendant No.5 has no nexus with it. The sale of schedule property in favour of defendant No.5 does not violate order of this court and there are no allegations against this defendant in plaint. Hence defendant No.5 cannot be held liable for actions or inaction on part of defendant Nos.1 to 4 and consequently no action can be brought against it under alleged rights of plaintiff. Defendant No.5 is neither necessary nor proper party for adjudication of dispute or breach of alleged Mortgage Deed by other defendants and suit is not maintainable against it. These amongst other grounds, it is prayed to dismiss the suit.
11. In view of pleadings of both parties, this court has framed following issues:
1. Whether the plaintiff proves that defendants 1 and 4 executed mortgage deed dated 04.04.2014 by deposit of title deeds as claimed in para 9 of the plaint?
2. Whether the plaintiff proves that the 1st defendant had agreed to pay interest at 24% p.a. on the advance of Rs.05 Crores?26 Com.OS No.25855/2017
3. Whether the defendants 1 and 4 prove that the suit is time barred?
4. Whether the defendants 1 and 4 prove that the suit is bad for misjoinder of defendants 2 to 4?
5. Whether the 3rd defendant proves that the mortgage created in favour of the consortium lenders, SBM, Bank of India and SBI was prior in point of time?
6. Whether the plaintiff is entitled to recover Rs.05 Crores from defendants 1 and 4 with interest at 24% p.a. from the date of suit as claimed?
7. Whether the plaintiff is entitled for declaration that the mortgage deed dated 28.05.2015 in favour of defendants 2 and 3 is not binding?
8. Whether the plaintiff is entitled for a direction to sell the suit property to recover the amount claimed in the suit?
9. What order or decree?27 Com.OS No.25855/2017
ADDITIONAL ISSUE DTD.05.12.2025
1. Whether defendant No.1 proves that Mortgage Deed dtd.04.04.2014 is invalid, void and opposed to law?
12. In support of its case, plaintiff company has got examined its Authorized Representative as PW1 and got marked 15 documents as per Ex.P1 to Ex.P15. Further plaintiff has got marked Ex.P16 and 17 through DW1, by way of confrontation during cross- examination of said witness. On the other hand, defendant company has got examined its Authorized Representative as DW1 and got marked 32 documents as Ex.D2 to Ex.D32. The defendant No.5 has got examined its Representative as DW2 and got marked Ex.D34 to Ex.D43 documents. Defendant No.1 has got marked Ex.D1 and 33 during cross- examination of PW1 by way of confrontation of said documents.
13. Heard arguments of learned counsels for the plaintiff and defendants. Perused evidence adduced by both parties and written arguments filed by counsels for both sides.
28 Com.OS No.25855/201714. The followings are answers to above:
Issue No.1:- In the Negative.
Issue No.2:- In the Negative.
Issue No.3:- In the Affirmative.
Issue No.4:- In the Negative.
Issue No.5:- In the Negative.
Issue No.6:- In the Negative.
Issue No.7:- In the Negative.
Issue No.8:- In the Negative.
Addl.Issue No.1:- In the Affirmative.
Issue No.9:- As per the final Order for the following;
REASONS
15. Issue Nos.1, 8 and Addl. Issue dated 05.12.2025:- These issues are taken together for consideration as finding on one issue may have bearing on findings on other issues and in order to avoid repetition of facts and evidence of case. The averments of plaint and written statement are already narrated in detail in foregoing paras and same need not be repeated. In support of its case, plaintiff has got examined its Authorized Representative by name Rohan Agarwal as PW1, who has filed his chief examination affidavit by reiterating entire averments of plaint.
29 Com.OS No.25855/201716. PW1 has got marked Certified copy of Board resolution of plaintiff company dtd.08.01.2016 authorizing him to conduct present case as per Ex.P1, Computer generated Memorandum of Article of association of plaintiff company as per Ex.P2, the Original unregistered Mortgage Deed said to have been executed by defendant No.1 by leaving space of date blank as "___ day of March 2014" as per Ex.P3 along with an endorsement of concerned Deputy Commissioner of Stamps and District Registrar Jayanagar Bengaluru for having collected deficit stamp duty of Rs.2,57,500/- and penalty of Rs.2,57,500/- i.e., total amount of Rs.5,15,000/- on said document. PW1 has further got marked Form No.15 of said stamp duty issued by District Registrar of Stamps as per Ex.P3(a), Bank account statement of plaintiff held in Standard Chartered Bank from 01.04.2012 to 10.01.2013 as per Ex.P4, Computer generated ledger account of defendant No.1 maintained by plaintiff as per Ex.P5, Certified copy of Memorandum of confirming the extension of 30 Com.OS No.25855/2017 equitable mortgage executed by defendant No.1 and 4 in favour of defendant No.2 dtd.28.05.2015 as per Ex.P6, Certificate of PW1 under Sec.65B of Evidence Act as per Ex.P7, Office copies of legal notices issued by plaintiff to defendant No.1 dtd.18.12.2015 and 09.02.2016 as per Ex.P8 and Ex.P9, Office copy of legal notice issued by plaintiff to director of defendant No.1 dtd.10.06.2020 as per Ex.P10, Postal receipt and acknowledgment showing service of said legal notice on defendant No.1 as per Ex.P10(a) and
(b), Reply notice issued by defendant No.1 to counsel for plaintiff as per Ex.P11, Certified copy of company petition filed by plaintiff against defendant No.1 under Company petition No.161/2016 along with objections filed by defendant No.1 to said case as per Ex.P12 and Ex.P13, Copies of Reply notices issued by defendant No.1 to counsel for plaintiff dtd.30.01.2015 and 26.02.2015 as per Ex.P14 and Ex.P15.
17. In relevant portion of cross examination of PW1 by counsel for defendants side, he asserts 31 Com.OS No.25855/2017 to be Manager of plaintiff company by joining it 2007-08 and he asserts to have personal knowledge about the suit transaction. However PW1 denies that Director of plaintiff has not signed Ex.P1. He denies to know type of Ex.P3 mortgage and admits that it is not attested by witnesses. He further admits that date of execution of Ex.P3 is left blank and states that it was executed in March/April 2014 in his presence. He further admits that he has not signed Ex.P3 as a witness and said deed is also not signed by its 2nd party. Though PW1 has explained that he was told about signatures could be done at the time of registration, he was not intimated about date of registration. PW1 has denied suggestions that Ex.P3 was introduced for the first time in the suit and he denies to know if original title deeds have to be collected if mortgage is by depositing of title deeds. PW1 clearly admits that they have not collected original title deeds at the time of execution of Ex.P3 and he does not know where such title deeds are. He further admits that Ex.P3 is not registered since 32 Com.OS No.25855/2017 defendant did not come forward to register the same and he denies to know if there are no entries of said document in encumbrance certificate. It is clearly suggested to him that Ex.P3 is created for the purpose of this case. In his further cross-examination PW1 admits that Ex.P4 is not attested by bank and Ex.P5 is self attested for the purpose of this case. PW1 further denies to know about issuance of paper publications by defendant No.5 before purchasing the property and said defendant is bonafide purchaser of it.
18. After production of legal notices and copies of company petition as per Ex.P8 to Ex.P13, PW1 has been further subjected to cross examination by defendants side wherein he has clearly admitted that plaintiff has not signed the deed of mortgage, but denies that Ex.P3 is concocted for the purpose of this suit. PW1 admits filing of Company Petition Nos.161/2016 and 160/2016 by plaintiff on confrontation as per Ex.D1 and he further admits that defendant No.1 is making payment in Company 33 Com.OS No.25855/2017 Petition No.161/2016. He further admits receiving of Rs.2,35,00,000/- from defendant No.1 and even after filing of his affidavit evidence they received Rs.45 Lakhs from 1st defendant. PW1 denies to know receiving of Rs.2,14,00,000/- in Company Petition No.160/2016.
19. Most importantly on confrontation of Ex.P3, PW1 admits that on 1st page of said deed date is mentioned as 04.04.2014 and on 2nd page the date is mentioned as March 2014, which is prior to purchase of stamp. He further clearly admitted that promoter of defendant No.1 was owner of property mortgaged under Ex.P3 and defendant No.1 was not owner of it. It is specifically suggested to PW1 that Ex.P3 is not executed by defendant No.1 or its directors and same has been created to overcome the period of limitation. Most importantly PW1 admits that, Ex.P9 Notice was issued on behalf of M/s. G.K.Ispath and not on behalf of plaintiff. PW1 further admits that, 1 st defendant had placed orders for supply of iron and steel worth more than Rs.25 Crores and they had 34 Com.OS No.25855/2017 good relationship with plaintiff. However he denies that, due to such good relationship, the above loan was advanced without interest. Further though PW1 asserts that they had passed a resolution with regard to sanctioning of loan to defendant No.1, no such resolutions are produced. It is suggested to him that in view of good business relationship, plaintiff had advanced above loan of Rs.5 Crores without any interest.
20. During his further cross examination by defendant No.1 side, on confrontation of certified copy of memo dtd.04.02.2020, PW1 admits that they had received 1st payment from defendant No.1 on said date and said document is marked as Ex.D33. Further though PW1 admits that Ramaraju was kartha of defendant No.4, he has stated that he cannot recall whether said Ramaraju signed any documents about suit transaction, but clearly admits that as per para No.7 plaintiff has admitted that defendant No.1 was not owner of suit schedule properties. He has further admitted that defendant 35 Com.OS No.25855/2017 No.4 was not party to Ex.P3 Mortgage Deed and denies to know that said properties were already mortgaged SBI as on date of Ex.P3. Further PW1 admits that he is not aware as to where, when and how defendant No.4 is liable to pay the suit liability to plaintiff and he also denies to know if defendant No.4 did not get any benefit from suit transaction.
21. PW1 has denied that Srinivasaraju has not signed Ex.P3 and he denies to remember multiple people present at the time of execution of said document. He further asserts that since Srinivasaraju assured to get signature of witnesses, they did not obtain such signatures on Ex.P3. However this fact is not pleaded in plaint. Further PW1 states that, they purchased stamp paper of Rs.200/- for said document as per advise of their advocate. However he denies to remember name of said advocate and invalidity of such document without attestation. He has clearly denied suggestion that Ex.P3 has been prepared the after the debt become time barred, knowing fully well that limitation of mortgage deed is 36 Com.OS No.25855/2017 12 years. Further PW1 denies to remember further payments made in company petition No.161/2016 and he also denies to know receiving of substantial amount by GK Ispat from plaintiff in company petition No.160/2016. PW1 further admits that plaintiff is not party to Ex.P6 and Ex.P9 documents and denies that there was no agreement for payment of interest.
22. Most importantly PW1 denies to know whether plaintiff pays income tax on their entitlements or on the amount of interest they get. He further denies to know whether they have paid income tax on the basis of amount claimed in the suit and denies suggestion that they have not paid any such tax on interest. Further though PW1 asserts that Srinivasaraju had agreed to obtain signatures of all concerned persons on behalf of defendant No.1, he denies to recall as to who were the other persons who need to sign said document. The entire evidence of PW1 is denied in toto and it is suggested to him 37 Com.OS No.25855/2017 that plaintiff is not entitled for any relief claimed in the suit.
23. Defendant No.1 has got examined it's authorised representative by name Prasad Babu N. S/o. Sri Narayanappa as DW1, who has filed his chief examination affidavit by reiterating entire averments of their WS. DW1 has admitted receiving of aforesaid sum of Rs.5 Crores by defendant No.1 from plaintiff company out of good business relationship, but he has denied rest of case of plaintiff with regard to agreeing to pay interest on said loan, execution of Mortgage deed and asserts that alleged mortgage deed has been fabricated for the sole purpose of this suit. Further DW1 has challenged the validity and admissibility of aforesaid deed on the ground of being undated, unsigned, non-registration, non attestation. DW1 has further stated on oath that, plaintiff has instituted a parallel proceedings before Hon'ble High Court of Karnataka under Company Petition No.161/2016 for very same transaction and defendant No.1 has paid entire principal sum of Rs.5 38 Com.OS No.25855/2017 Crores, and additionally Rs.94 Lakh due under sister concern transaction in Company Petition No.160/2016. DW1 has narrated details of such payments in his chief examination affidavit.
24. DW1 has got marked Certified copy of Board Resolution executed by defendant No.1 company in his name to conduct and depose in present case, Ex.D3 Statement of bank Account of defendant No.1 held in Bank of Baroda dtd.12.02.2020 showing transfer of amount to plaintiff, Ex.D4 Copy of DD No.184704 of Vijaya Bank dtd.02.07.2020 for Rs.20,00,000/- drawn in favour of plaintiff, Ex.D5 to Ex.D12, Ex.D14, Ex.D16, Ex.D18 to Ex.D23 Statement of Accounts held by defendant No.1 in Bank of Baroda, HDFC Bank showing transfer of partial amounts to the company of plaintiff, Copies of DDs drawn in favour of plaintiff towards various payments as per Ex.D13, Ex.D15, Ex.D17, Ex.D24. DW1 has further got marked Certified copies of Company Petitions filed by plaintiff under Company Petition No.161/2016 against defendant No.1 as per 39 Com.OS No.25855/2017 Ex.D25, Certified Copy of petition in Company Petition No.160/2016 filed by M/s G.K Ispat which is said to be sister concern of plaintiff as per Ex.D26, Certified copy of Common Order sheet of Hon'ble High Court of Karnataka of aforesaid both company petitions as per Ex.D27, showing pendency of said petition between parties. On perusal of Ex.D25 it discloses that the plaintiff has filed said petition seeking to order of winding up of 1 st defendant company for payment of aforesaid debt of Rs.5 Crores, which is also subject matter of present suit, but nothing is whispered by plaintiff with regard to details of said petition in the plaint. Similarly G.K. Ispat has filed Ex.D26 Company Petition No.160/2016 seeking winding up of defendant No.1 company for recovery of dues from defendant No.1. DW1 has further got marked Certified copy of final order passed by Hon'ble High Court of Karnataka in WP No.4668/2025, which shows that the Hon'ble High Court of Karnataka has disposed of said petition challenging order passed by this court on IA No.18 40 Com.OS No.25855/2017 filed under Order VII Rule 11(a) and 11(d) of CPC, dtd.30.01.2025, with direction to this court to decide the matter in accordance with law on merits. Further DW1 has produced Digital certified copies of Deed of Extension of Mortgage dtd.16.12.2011 executed by Kartha of defendant No.4 HUF and Director of defendant No.1 company by name A.C Srinivasaraju in favour of State Bank of India as per Ex.D30, Digital certified copy of another Mortgage Deed dtd.09.12.2012 executed by them in favour of SBI, Hudson Circle Branch as per Ex.D31 and his certificate under Sec.63 of BSA in support of digital document as per Ex.D32.
25. DW1 has been subjected to elaborate cross- examination by plaintiff side, wherein he admits that he is not looking after accounts of defendant No.1 company and same is handled by one Mahesh Kulal of Accounts Department. He further states that one Ramaraju and A.C Srinivasaraju were only Directors of defendant No.1 company in the year 2012 and he admits that both were in-charge of affairs of 41 Com.OS No.25855/2017 defendant No.1 company during said period. DW1 further states that he has ascertained the truthfulness of the information given by their director and he has gone through Ex.P14 Reply notice dtd.30.01.2016 issued by counsel for defendant No.1 prior to preparing his evidence affidavit. Further DW1 has testified that they have borrowed sum of Rs.295 Crores from SBI agreeing to repay the loan with interest, but he denies to recall the rate of interest. He further states that the said loan of SBI was taken over by defendant Nos.2 and 3, but admits that they have not produced any such document showing assignment of said loans. DW1 further states that he does not remember whether loan granted under Ex.D30 Mortgage Deed were on commercial interest, but asserts that same were used for commercial purpose of constructing mall. Further though DW1 testifies that subsequently they have made payment to plaintiff by reaching to settlement, he admits that no documents were executed in that regard, but again states that they have made payments as per 42 Com.OS No.25855/2017 court order, which appears to be depositing of Rs.9 Crores before this court by defendant No.1 in pursuant to direction in WP No.4668/2025.
26. Most importantly, DW1 admits that A.C Srinivasaraju has no physical problem to attend the court and he was not present at all the times when said A.C Srinivasaraju executed documents. He has further clearly admitted that he was not present personally when A.C Srinivasaraju borrowed loan from plaintiff on behalf of defendant No.1 and he has not given instruction to their lawyer at the time of preparing reply notice or written statement. DW1 further admits that he was not representing defendant No.1 before Hon'ble High Court of Karnataka in Company Petition Nos.160/2016 and 161/2016. Further DW1 testified that as per Ex.D5 to Ex.D24 entire principle amount has been paid to plaintiff, but when there are other transactions between defendant No.1 and M/s. G.K Ispat, without support of cogent documents or account statements, it is difficult to believe that such payments were 43 Com.OS No.25855/2017 made by defendant No.1 to plaintiff towards suit loan itself. DW1 further admits that they have not taken any steps after knowing that the Mortgage Deed was fabricated. On confrontation of Certified copy of order of Hon'ble High Court of Karnataka in WP No.17586/2024, DW1 has admitted the same and same is marked as Ex.P16. Further Ex.P17 MCA portal data of defendant No.1 company is also admitted by DW1 by way of confrontation. Ex.P16 discloses settlement arrived between defendant No.1 with some other parties with regard to the dues. DW1 admits that he has no idea if defendant No.1 company is a party to Debenture Trust deed dtd.22.10.2020 entered into with Vistara ITCL Ltd., and one Mr. Sachin Raju has signed the said document.
27. Further Defendant No.5 has also got examined it's Authorized Representative by name K. Rama Govinda Reddy S/o. K.Sreerami Reddy as DW2, who has reiterated the averments of written statement of Defendant No.5 in his written statement and testified 44 Com.OS No.25855/2017 that defendant No.5 has purchased portion of suit schedule property which is referred as "Hotel property" with due legal course by issuing public notices in news paper and as such it has validly acquired the same. Further DW2 has also denied to know the transaction between plaintiff and defendants No. 1 to 4.
28. DW2 has got marked Copy of board resolution of defendant No.5 dtd.02.09.2022 showing his authorization to depose in the matter as per Ex.D34, Copy of certificate of incorporation of defendant No.5 company as per Ex.D35, Copy of another Board Resolution dtd.02.09.2022 as per Ex.D36, relevant pages of Indian Express, The Hindu, Kannada Prabha, Udayavani Newspapers dtd.17.05.2019 showing publication of public notice prior to purchasing of portion of suit schedule property from defendant No.1 as per Ex.D37 to Ex.D40 and his Certificate under Sec.65B of Evidence Act as per Ex.D41. Further DW2 has got marked Certified copy of Sale Deed dtd.17.07.2019 with regard to 45 Com.OS No.25855/2017 purchasing of portion of suit schedule property from defendant No.1 as per Ex.D42 and his another Certificate under Sec.65B of Evidence Act in respect of said sale deed as per Ex.D43.
29. DW2 has also been subjected to cross- examination by counsel for plaintiff, wherein he denies that at the time of execution of above Sale Deed by defendant No.1, they were aware that said defendant has not taken permission of the court. Further DW2 has stated that a due legal course refers to legal opinion taken by them and issuance of public notices by way of paper publication. However he denies to know the dates of legal opinion and admits that Ex.P3 Mortgage Deed has not come to their notice. DW2 has specifically denied that in view of Ex.D3 Mortgage Deed defendant No.1 has no right to execute the Sale Deed in favour of defendant No.5. Further DW2 has testified that they had not received any response to public notices published by them, but categorically denies that prior to execution of Ex.D42 Sale Deed, defendant No.5 was aware 46 Com.OS No.25855/2017 about present proceedings; asserts that defendant No.1 had not informed them about pendency of present proceedings prior to execution of said sale deed.
30. Thus on perusal of pleading and evidence adduced by both parties, it clearly shows that, advancement of suit loan of Rs.5 Crores has not been denied and disputed by defendant No.1, since it is unequivocally admitted by said defendant in it's written statement and also in it's Ex.P14 Reply dated 30.01.2026. The plaintiff has asserted that, after issuance of Ex.P8 Legal notice dtd.18.12.2015 to defendant No.1, said defendant by issuing Ex.P14 Reply dtd.30.01.2016 has categorically admitted and acknowledged receiving of Rs.5 Crores by defendant No.1 company in the year 2012 and also by admitting execution of the above Mortgage Deed. However on perusal of Ex.P14 Reply notice said to have been issued by Defendant No.1, it shows that, though said defendant has admitted borrowing of aforesaid business loan of Rs.5 Crores, it has 47 Com.OS No.25855/2017 seriously denied the execution of said mortgage. Under such circumstances, the burden lies upon plaintiff to prove genuineness, validity and admissibility of said Mortgage.
31. Further as per case of plaintiff, Ex.P3 Mortgage deed has been executed by one Srinivas Raju, who is said to be director of defendant No.1 and on bare perusal of said document, it shows that, defendant No.4 has not executed it. In spite of it, plaintiff asserts that, defendant No.1 company and its promoter A.M Raju being kartha of defendant No.4 having committed breach of agreed terms of Mortgage Deed are liable to the aforesaid sums along with agreed interest and failing which the suit schedule land has to be sold for realization of dues. PW1 has clearly admitted that promoter of defendant No.1 was owner of property mortgaged under Ex.P3 and defendant No.1 was not owner of it. The plaintiff has asserted that, defendant No.1 company had agreed to obtain signatures from all those persons necessary to further more perfectly assuring to 48 Com.OS No.25855/2017 mortgage the suit schedule property. However absolutely no evidence is put forth by plaintiff to prove aforesaid facts.
32. Most importantly on confrontation of Ex.P3, PW1 admits that on 1st page of said deed date is mentioned as 04.04.2014 and on 2nd page the date is mentioned as March 2014, which is prior to purchase of stamp. PW1 has categorically admitted in his cross examination that, the date of execution of Ex.P3 is left blank and he vaguely asserts that, it was executed in March/April 2014 in his presence. But he admits that he has not signed Ex.P3 as a witness and said deed is also not signed by its 2nd party. Though PW1 has explained that he was told about signatures could be done at the time of registration, he admits that, he was not intimated about date of registration. Further, PW1 denies to know if original title deeds have to be collected if mortgage is by depositing of title deeds and clearly admits that they have not collected original title deeds at the time of execution 49 Com.OS No.25855/2017 of Ex.P3, which is also a serious ground to disbelieve genuineness of aforesaid document.
33. Thus it is crystal clear that aforesaid Mortgage deed is neither signed by both parties nor it is attested as required under law. Defendant No.1 and 4 have further contended that the Mortgage Deed is not registered and as such same cannot be looked into. Defendant No.1 never represented that it is the owner of schedule property and no point of time it has created the above mortgage. PW 1 admits that Ex.P3 is not registered since defendant did not come forward to register the same and he denies to know if there are no entries of said document in encumbrance certificate. These all aspects, make out strong grounds to believe that, Ex.P3 is created for the purpose of overcoming period of limitation.
34. Further, it is not disputed that Ex.P3 Mortgage deed is not registered. Learned counsels for defendants No.1 and 4 have relied upon section 59 of Transfer of property Act and same is extracted as under:-
50 Com.OS No.25855/201759. Mortgage when to be by assurance:-
Where the principal money secured is one hundred rupees or upwards, a mortgage, other than a mortgage by deposit of title-deeds can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by a registered instrument signed and attested as aforesaid, or except in the (case of a simple mortgage) by delivery of the property.
35. The aforesaid section clearly shows that the mortgage deed is a compulsory required to be registered and attested, whereas Ex.P3 is neither registered nor attested by witnesses. Further plaintiff or it's authorised signatory themselves have not attested their signatures on said deed. In this regard counsels for defendants no. 1 and 4 have relied upon section 68 of Evidence Act, which mandates proving of documents required to be compulsorily attested. The said section is extracted as under:-
68. Proof of execution of document required by law to be attested:-
If a document is required by law to be attested, it shall not be used as evidence until one attesting 51 Com.OS No.25855/2017 witness at least has been called for the purpose of proving its execution, if there be an attesting witness alive, and subject to the process of the Court and capable of giving evidence :[Provided that it shall not be necessary to call an attesting witness in proof of the execution of any document, not being a Will, which has been registered in accordance with the provisions of the Indian Registration Act, 1908, unless its execution by the person by whom it purports to have been executed is specifically denied.
36. On the other hand, Learned counsel for plaintiff has vehemently argued that, the executant of Ex.P3 being representative of Defendant no.1 company has deliberately not chosen to enter into witness box to speak about said document, which is strong ground to presume deemed admission of execution of said document by him on his behalf as well as, on behalf of defendant No.4. The said counsel has further argued that, aforesaid Mortgage is in the nature of acknowledgment of admitted debt borrowed by defendant No.1 and as such same cannot be discarded on the basis it's nomenclature and said documents binds defendants No.1 and 4 to subject 52 Com.OS No.25855/2017 the suit schedule property for sale for satisfaction of loan dues. In this regard Learned counsel for plaintiff has relied upon following caselaws:
(2008) 4 SCC 451 between B.K. Muniraju V/s State of Karnataka and Others (Hon'ble Supreme Court) "18. The document in question which is filed as Annexure P-3, has been styled or titled as "Certificate of Grant". In order to know the real nature of the document, one has to look into the recitals of the document and not the title of the document. The intention is to be gathered from the recitals in the deed, the conduct of the parties and the evidence on record. It is settled law that the question of construction of a document is to be decided by finding out the intention of the executant, firstly, from a comprehensive reading of the terms of the document itself, and then, by looking into to the extent permissible the prevailing circumstances which persuaded the author of the document to execute it. With a view to ascertain the nature of a transaction, the document has to be read as a whole. A sentence or term used may not be determinative of the real nature of transaction. Reference in this regard can be made to the following cases i.e. Vidhyadhar vs. Manikrao & Anr., (1999) 3 SCC 573, Subbegowda (Dead) by LR. vs. Thimmegowda (Dead) by LRs., (2004) 9 SCC 734 and Bishwanath Prasad Singh vs. Rajendra Prasad & Anr., (2006) 4 SCC 432.53 Com.OS No.25855/2017
19. The above principles make it clear that we have to see terms and conditions and recitals in the document and not the title alone. Though the document, according to the appellant, "Certificate of Grant", perusal of the clauses therein, clearly shows that the land was sold on 04.03.1948 in a public auction and Motappa purchased the same for a price of Rs.408.12. In addition to the recitals, the "darkhast register extract" produced as Annexure "C" before the High Court also shows that the land in question was sold for a "price". Form I also indicates that the land in question was purchased and what was paid by the purchaser under the said document was the purchase price."
(1976) 4 SCC 147 between Union of India V/ s D.N. Revri and Co. and Others (Hon'ble Supreme Court) "7. It must be remembered that a contract is a commercial document between the parties and it must be interpreted in such a manner as to give efficacy to the contract rather than to invalidate it. It would not be right while interpreting a contract, entered into between two lay parties, to apply strict rules of construction which are ordinarily applicable to a conveyance and other formal documents. The meaning of such a contract must be gathered by adopting a common sense approach and it must not be allowed to be thwarted by a narrow pedantic and legalistic interpretation. Here, at the time when the arbitrator came to be nominated and the reference was made, there was a Ministry of Food 54 Com.OS No.25855/2017 & Agriculture and there was a Secretary in that Ministry, but the only difficulty, according to the High Court, was that there were. instead of one, two Secretaries and it could not be predicated as to which Secretary was intended to exercise the power of nominating an arbitrator. ....."
(2022) 4 SCC 657 between Maharashtra State Electricity Distribution Company Limited V/ s Maharashtra Electricity Regulatory Commission and Others. (Hon'ble Supreme Court) "178. The proposition that Courts cannot rewrite a contract mutually executed between the parties, is well settled. The Court cannot, through its interpretative process, rewrite or create a new contract between the parties. The Court has to simply apply the terms and conditions of the agreement as agreed between the parties, as observed by this Court in Shree Ambica Medical Stores and Ors. v. Surat People's Co-operative Bank (supra), cited by Ms. Divya Anand. This appeal is an attempt to renegotiate the terms of the PPA, as argued by Ms. Divya Anand as also other Counsel. It is well settled that Courts cannot substitute their own view of the presumed understanding of commercial terms by the parties, if the terms are explicitly expressed. The explicit terms of a contract are always the final word with regard to the intention of the parties, as held by this Court in Nabha Power Ltd. (NPL) vs. Punjab State Power Corporation Ltd. (supra) cited by Ms. Anand."
55 Com.OS No.25855/20172026 SCC Online SC 316 between General Secretary Vivekananda Kendra V/s Pradeep Kumar Agarwalla and Others (Hon'ble Supreme Court) "19. If the words in a contract/deed are clear, there is very little the courts must do in the construction of the contract in determining the intention of the parties. In furtherance of determining the intention, the deed must be read as a whole to ascertain the true meaning of its clauses, and the words of each clause should be interpreted harmoniously. This intention must be derived directly from the plain and ordinary meaning of the text itself. Furthermore, these words should be understood exactly as the intended parties would commonly use them. The covenants must be applied precisely as written, neither diluted into irrelevance nor stretched beyond their original scope. If the construction of the contract/deed, through its words and context, does not provide the court with the parties' intention, the court may have regard to the circumstances surrounding its creation and the subject- matter to which it was designed and intended to apply.....
20. In the present case, the impugned judgment refers to the ex-post facto conduct of the parties to determine the intention of the parties while executing the "lease deed". For instance, in paragraph 21, the impugned judgment relies on the plaintiff's witnesses' cross-examination to establish the nature of possession and occupation of Defendant No.1. It must be noted that while the circumstances of a deed are not the safest guide for interpreting a crystallised document, 56 Com.OS No.25855/2017 courts may rely on it when the document's purport is unclear through literal construction. However, courts must exercise far greater restraint when inferring the parties' intention from circumstances arising after the creation of the terms. For, the conduct may not be in tandem with either the literal expression or the purpose of the document.
20.1 ............... The above clauses in Ext. 1 denote that the Plaintiff is a lessee, and Ext. 1 satisfies the meaning of a lease deed. Unless the parties agree bilaterally, disturbing the Plaintiff's possession is illegal.
20.2 Further, the impugned judgment's reliance on the lessor's occupation of the first floor does not imply that Ext. 1 is a licence because exclusive possession is assessed vis-à-vis the demised portion, and not the portion excluded from the scope of the Ext. 1-agreement.
21. Thus, in the case at hand, the reason for ignoring literal construction is not convincing to us. We note that interpreting intention through purposive construction or through ex-post facto circumstances is unnecessary when the intention is understood from the plain and ordinary meaning of the text. There is no doubt that the nomenclature alone of the document is not the decisive factor of the nature of a document; it is the text and the context that point to the obligations undertaken by the parties to a written document. In the case at hand, the document's nomenclature, text and context lead to only one conclusion: that Defendant No. 1 entered into a 99- year lease deed. Thus, the unilateral cancellation, in the facts and circumstances of this case, is illegal, and 57 Com.OS No.25855/2017 it should be understood as having interfered with the right of the Plaintiff to remain in possession of the Plaint Schedule Property for 99 years. Therefore, the prayers, as made, are available and are rightly granted by the Trial and First Appellate Courts."
2014 SCC Online Kar 10118 between Sri. Armugam V/s Smt. Shakuntla and Ors., (Hon'ble High Court of Karnataka) "3. Counsel for the respondents to stand by his contention to defend the order passed by the Trial Court, relied upon the Supreme Court decision in the case of Anil Rishi v. Gurbaksh Singh. . 2006 5 SCC 558, to contend that burden is on the plaintiff since he raised an issue of denying the adoption and the Will and accordingly submitted, the onus is on the plaintiff and more over, such an issue is not necessary as the plaintiff sought for a declaration and since he has pleaded everything, it covers the issue and no specific issue needs to be raised with regard to the adoption and the Will. .........
5. Regarding Sections 101, 102 and 106 of the Evidence Act, the Apex Court in the above cited case, while dealing with the reversal of burden of proof held that a distinction exists between a burden of proof and onus of proof. The right to begin follows onus probandi. It assumes importance in the early stage of a case. Question of onus of proof has greater force, where the the question is, which party is to begin. Burden of proof is used in three ways: (i) to indicate the duty of bringing forward evidence in support of a proposition at the beginning or later; (ii) to make that of establishing 58 Com.OS No.25855/2017 a proposition as against all counter evidence; and (iii) an indiscriminate use in which it may mean either or both of the others. Ultimately, referring to Section 101 of the Evidence Act, it is held that burden of proving facts rests on the party who substantially asserts the affirmative of the issue and not on the party who denies it. The said rule may not be universal in its application and there may be exception there to. The suit will fail if both the parties do not adduce any evidence, in view of Section 102 of the Act. In terms of Section 102, the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entities him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same."
(1999) 3 SCC 573 between Vidhyadhar V/s Manikrao and Anr (Hon'ble Supreme Court) "17. Where a party to the suit does not appear into the witness box and states his own case on oath and does not offer himself to be cross examined by the other side, a presumption would arise that the case set up by him is not correct as has been held in a series of decisions passed by various High Courts and the Privy Council beginning from the decision in Sardar Gurbakhsh Singh V.s Gurdial Singh and Anr. ...."
Hon'ble High Court of Karnataka in RFA No.155 of 2006 (SP) between Sri. N. Narayanappa and Ors V/s Sri. Pillappa.
"24. The defendant, being a key witness to the transaction, held crucial information that 59 Com.OS No.25855/2017 could have clarified the circumstances surrounding the creation of the alleged agreement of sale. By not stepping into the witness box, the defendant deprived the plaintiff of the opportunity to cross-examine him on these allegations. This failure to present himself as a witness not only weakens his case but also prevents the Court from evaluating the veracity of his claims through cross-examination, which is a crucial mechanism in the judicial process to test the credibility of evidence. The significance of this omission is heightened because the defendant, as a party to the disputed transaction, had personal knowledge of the facts, which makes his testimony indispensable.
25. The Hon'ble Apex Court in Vidhyadhar vs. Manikrao and Another (supra) has established a well- settled principle of law that when a party who has personal knowledge of the facts of the case fails to appear in the witness box to depose in support of his pleadings, an adverse inference can be drawn against him under Section 114(g) of the Indian Evidence Act. This section empowers the Court to presume that evidence which could be and is not produced would, if produced, be unfavorable to the person withholding it. In Vidhyadhar's case, the Court emphasized that when a defendant does not offer himself for cross-examination, it gives rise to the presumption that the case set up by him is not true. Applying this principle to the present case, the defendant's deliberate abstention from testifying and offering himself for cross-examination leads to the 60 Com.OS No.25855/2017 inference that his allegations are not credible and that the case put forward by the plaintiff is genuine.
26. Furthermore, the defendant's failure to provide specific evidence regarding the loan allegedly taken by the plaintiff or the circumstances under which the thumb impression was obtained adds to the suspicion surrounding his claims. When a party who bears the burden of proof withholds material evidence or fails to testify, Courts are justified in drawing an adverse inference. The defendant's non-appearance creates a significant void in the defense, as he was in the best position to explain the alleged fraud concerning the agreement of sale. The absence of this testimony strengthens the presumption in favour of the plaintiff, whose case remains uncontested due to the defendant's failure to discharge his burden of proof."
37. Further counsel for plaintiff has relied upon following caselaws and vehemently argued that, when defendant No.1 unequivocally admits the loan transaction and the other surrounding circumstances are sufficient to prove execution of mortgage admitting terms of repayment with interest, the burden casted upon plaintiff to establish the document as an acknowledgment of debt stands discharged. In this regard counsel for plaintiff has 61 Com.OS No.25855/2017 relied upon following caselaws on admissions and relevant portions are extracted as under:-
(2000) 3 SCC 312 between Subhra Mukherjee and Another V/s Bharat Coking Coal Ltd., and Others (Hon'ble Supreme Court) "12. There can be no dispute that a person who attacks a transaction as sham, bogus and fictitious must prove the same. But a plain reading of question No.1 discloses that it is in two parts; the first part says, whether the transaction, in question, is bona fide and genuine one which has to be proved by the appellants. It is only when this has been done that the respondent has to dislodge it by proving that it is a sham and fictitious transaction. When circumstances of the case and the intrinsic evidence on record clearly point out that the transaction is not bona fide and genuine, it is unnecessary for the court to find out whether the respondent has led any evidence to show that the transaction is sham, bogus or fictitious."
Hon'ble Supreme Court in SLP (Civil) No.9975 of 2025 between Rajiv Ghosh V/s Satya Naryan Jaiswal.
"26. The primary object underlying Rule 6 is to enable a party to obtain speedy judgment at least to the extent of admission. Where a plaintiff claims a particular relief or reliefs against a defendant and the defendant makes a plain admission, the former is entitled to the relief or reliefs admitted by the latter."62 Com.OS No.25855/2017
(2004) 6 SCC 325 between Vice-Chairman Kendriya Vidyalaya Sangathan and Anr V/s Girdharilal Yadav (Hon'ble Supreme Court) "11. The admitted facts remain that the respondent is a permanent resident of Haryana. It further stands admitted that at the relevant time, Ahirs/Yadavs of Haryana were not treated as OBC. It further stands admitted that the respondent obtained a certificate showing that he was a resident of Rajasthan, which he was not. It is not disputed that a detailed enquiry was conducted by the District Magistrate, Kota, wherein the respondent had been given an opportunity of hearing. It is also not in dispute that he had given an opportunity to show cause as to why his appointment should not be cancelled not only by the appointing authority but also by the Appellate Authority. In terms of Section 58 of the Evidence Act, 1872 facts admitted need not be proved. It is also a well-settled principle of law that the principles of natural justice should not be stretched too far and the same cannot be put in a straitjacket formula."
38. On the other hand Learned counsel for defendant No.1 has relied upon following case-laws on validity and admissibility of Ex.P3 Unregistered Mortgage deed and argued that mere mechanical marking of an inadmissible document does not dispense with proof of such document and same has 63 Com.OS No.25855/2017 to be considered in the light of settled principles of law and other surrounding circumstances of the case. Learned counsel for defendant No.1 has further argued that any amount of evidence behest pleading cannot be looked into and mere stray admissions of otherside, do not absolve the burden of plaintiff to establish his case on merits. The relevant portions are culled out as under:-
(2008) 8 SCC 564 between K.B. Saha and Sons Private Limited V/s Development Consultant Limited (Hon'ble Supreme Court) "34. From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that:-
1. A document required to be registered is not admissible into evidence under Section 49 of the Registration Act.
2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the Proviso to Section 49 of the Registration Act.
3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.
4. A collateral transaction must be a transaction not itself required to be effected by 64 Com.OS No.25855/2017 a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards.
5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose."
(2010) 4 SCC 491 between LIC of India and Ors V/s Ram Pal Singh Bisen (Hon'ble Supreme Court) "26. We are of the firm opinion that mere admission of document in evidence does not amount to its proof. In other words, mere marking of exhibit on a document does not dispense with its proof, which is required to be done in accordance with law. As has been mentioned herein above, despite perusal of the record, we have not been able to come to know as to under what circumstances respondent plaintiff had admitted those documents. Even otherwise, his admission of those documents cannot carry the case of the appellants any further and much to the prejudice of the respondent.
AIR 2009 SC 1103 between Bachhaj Nahar V/s Nilima Mandal and Ors (Hon'ble Supreme Court) "12. It is thus clear that a case not specifically pleaded can be considered by the court only where the 65 Com.OS No.25855/2017 pleadings in substance, though not in specific terms, contains the necessary averments to make out a particular case and the issues framed also generally cover the question involved and the parties proceed on the basis that such case was at issue and had led evidence thereon. As the very requirements indicate, this should be only in exceptional cases where the court is fully satisfied that the pleadings and issues generally cover the case subsequently put forward and that the parties being conscious of the issue, had led evidence on such issue. But where the court is not satisfied that such case was at issue, the question of resorting to the exception to the general rule does not arise. The principles laid down in Bhagwati Prasad and Ram Sarup Gupta (supra) referred to above and several other decisions of this Court following the same cannot be construed as diluting the well settled principle that without pleadings and issues, evidence cannot be considered to make out a new case which is not pleaded. Another aspect to be noticed, is that the court can consider such a case not specifically pleaded, only when one of the parties raises the same at the stage of arguments by contending that the pleadings and issues are sufficient to make out a particular case and that the parties proceeded on that basis and had led evidence on that case. Where neither party puts forth such a contention, the court cannot obviously make out such a case not pleaded, suo moto."
AIR 2000 SC 153 between T.H Musthaffa V/s M.P Varghese and Ors., (Hon'ble Supreme Court) "10. ..... So far as the evidence that had been adduced in the case is concerned, it need 66 Com.OS No.25855/2017 not have been looked at by the learned Judge in the absence of appropriate pleadings in that regard. However Shri E.M.S Anam, the learned counsel for the appellant submitted that the fact that votes in the two polling stations at Varikoli School and Puttannoor School had been cast by using a wrong instrument was not in dispute and the evidence of the Returning Officer clearly indicated the use of the wrong instrument in the two polling stations which amounted to an admission in the case and, therefore, even in the absence of an appropriate pleading in that regard the evidence could be looked at. We fail to appreciate this argument. Unless the appellant had put forth his case in the pleading and the respondents are put on notice, the respondents cannot make an admission at all and there is no such admission in the course of the pleadings. If the pleadings did not contain the necessary foundation for raising an appropriate issue, the same cannot go to trial. Any amount of evidence in that regard, however excellent the same may be, will be futile. Therefore, the learned counsel is not justified in making the said submission and the same is rejected. ....."
(2004) 6 SCC 341 between M. Chinnasamy V/s K.C Palanisamy and Ors., (Hon'ble Supreme Court) "42. With respect we are not in a position to endorse the views taken therein in its entirety. Unfortunately, the decision of a larger Bench of this Court in Jagjit Singh (supra) had not been noticed therein. Apart from the clear legal position as laid down 67 Com.OS No.25855/2017 in several decisions, as noticed hereinbefore, there cannot be any doubt or dispute that only because a recounting has been directed, it would be held to be sacrosanct to the effect that although in a given case the court may find such evidence to be at variance with the pleadings, the same must be taken into consideration. It is now well-settled principle of law that evidence adduced beyond the pleadings would not be admissible nor any evidence can be permitted to be adduced which is at variance with the pleadings. The court at a later stage of the trial as also the appellate court having regard to the rule of pleadings would be entitled to reject the evidence where for there does not exist any pleading.
45. In T.H. Mustaffa (supra), this Court held that when the pleadings do not contain the material facts and necessary particulars, any amount of evidence would be insufficient."
AIR 2004 SC 3905 between Mukand Ltd., V/s Mukand Staff and Officers' Association (Hon'ble Supreme Court) "63. The above submission of learned counsel for the appellant is well founded under the Act. Disputes can be raised only by the workmen with the employer. The workmen, however, can in appropriate cases espouse the cause of non-workmen if there is community of interest between the workmen and the non-workmen. In the instant case, it is an admitted fact that the community of interest or estoppel has never been pleaded and the findings rendered by the High Court on this issue is in the 68 Com.OS No.25855/2017 absence of pleadings. If the non-workmen are given the status and protection available to the workmen, it would men that the entire machinery and procedure of the Act would apply to the non-workmen with regard to their employment/non-employment, the terms of employment, the conditions of labour etc. This would cast on the appellant-Company the onerous burden of compliance with the provisions of the Act in respect of the non- workmen. In our view, the situation is not envisaged by the Act which is solely designed to protect the interests of the workmen as defined in Section 2(s) of the Act."
39. Learned counsel for Defendant No.4 has argued that, plaintiff has not chosen to prove the signature of executant on Ex.P3 mortgage deed with the aid of expert and without discharging such basic burden, the execution of said mortgage deed cannot be proved. The said counsel has also relied upon following case-laws in support of his arguments on inadmissibility of Ex.P3 mortgage deed and relevant portions are extracted as under :-
MANU/SC/0305/1996 between O. Bharatan V/s K. Sudhakaran and Ors. (Hon'ble Supreme Court) "It is true that under Section 73 of the Evidence Act a disputed signature could be 69 Com.OS No.25855/2017 compared only with the admitted signature or signature proved to the satisfaction of the court to have been written or made by that person.
Reliance was placed on the decision reported in State (Delhi Admn.) vs. Pali Ram and contended that it is not advisable that a judge should take up the task of comparing the admitted handwriting with the disputed one to find out whether the two agree with each other and the prudent course is to obtain the opinion and assistance of an expert. This opinion was expressed by the Supreme Court in a criminal case while considering the question whether the accused had committed the offence of forgery and chearing. In Fakhruddin vs. State of Madhya Pradesh (AIR 1967 SC 1326), the Supreme Court observed that comparison of the handwriting by the court with the other documents not challenged as fabricated, upon its own initiative and without the guidance of an expert is hazardous and inconclusive. These observations were made in the facts and circumstances of such case. But, in the instant case, comparison of the signature found in the counterfoil are made to ascertain whether both signatures were put by the same person."
MANU/SC/0189/1978 between The State (Delhi Administration) V/s Pali Ram. (Hon'ble Supreme Court) "30. The matter can be viewed from another angle, also. Although there is no legal bar to the Judge using his own eyes to compare the disputed writing with the admitted writing, even 70 Com.OS No.25855/2017 without the aid of the evidence of any handwriting expert, the Judge should, as a matter of prudence and caution, hesitate to base his finding with regard to the identity of a handwriting which forms the sheet- anchor of the prosecution case against a person accused of an offence solely on comparison made by himself. It is, therefore, not advisable that a Judge should take upon himself the task of comparing the admitted writing with the disputed one to find out whether the two agree with each other; and the prudent course is to obtain the opinion and assistance of an expert."
40. However in response to said arguments of defendants' side, learned counsel for plaintiff has further argued that, when plaintiff has made such efforts of examining and proving the disputed signature of director of defendant No.1 by taking necessary steps and when the Court has disallowed their request for examining such signature with the aid of expert, it is not open for defendants to take plea of challenging the execution of said document. It is further argued that, in such circumstances, Court by its own comparison of writing can form it's opinion. The caselaw relied upon by learned counsel for plaintiff in this regard is culled out as under:-
71 Com.OS No.25855/2017(2003) 3 SCC 583 between Lalit Popli V/s Canara Bank and Others (Hon'ble Supreme Court) "13. It is to be noted that under Sections 45 and 47 of the Evidence Act, the Court has to take a view on the opinion of others, whereas under Section 73 of the said Act, the Court by its own comparison of writings can form its opinion. Evidence of the identity of handwriting is dealt with in three Sections of the Evidence Act. They are Sections 45, 47 and 73. Both under Sections 45 and 47 the evidence is an opinion.
..."
(Hon'ble Supreme Court) in Civil Appeal No. of 2025 between Prem Aggarwal and Mohan Singh and Ors., "15. The maxim 'actus curiae neminem gravabit', which means that the act of the Court shall prejudice no one, is a principle firmly embedded in our jurisprudence. It is founded on the equitable notion that no party should suffer owing to an error, delay, or inadvertence attributable to the Court itself. The Court, acting as in appendage of justice, cannot permit its own procedure or inadvertent lapse to occasion injustice.
Accordingly, where a party has been disadvantaged by reason of an act of the Court, it is incumbent upon the Court to undo such prejudice and restore the party to the position he would have occupied but for such act. ....
41. The maxim thus operates as a constant reminder that the Court's authority must be exercised not to the disadvantage of litigants, but in furtherance of justice. After all, to err is 72 Com.OS No.25855/2017 human, and when an inadvertent omission is brought to the Court's attention, it becomes the Court's solemn duty to ensure that no party suffers on account of such mistake. In such circumstances, the Court is obliged to restore the party to the very position he would have occupied had the error not occurred."
42. Leaned counsel for plaintiff has further argued that, the author of document need not be examined, if signature is not denied and Deed cannot be re- interpreted based on party's later conduct, when terms are clear and unambiguous. Further when a party i.e. signatory of Ex.P3 who bears the burden of proof withholds material evidence or fails to testify, the Courts are justified in drawing adverse inference against such party. He has further drawn attention of pleadings of defendants No.4 and 5 and argued that, mere taking contention by such defendants that they have no knowledge of facts pleaded by the plaintiff does not tantamount to denial of existing facts. The relevant case-laws relied upon by plaintiff side in this regard are culled out as under:-
73 Com.OS No.25855/2017(2022) 17 SCC 645 between Star Paper Mills Limited V/s Beharilal Madanlal Jaipuria Limited and Others (Hon'ble Supreme Court) "21. The High Court, in the impugned judgment erred in holding that the appellant had not examined the author of the documents. Such reasoning is absolutely erroneous as in the written statement, the respondents had not denied their signatures on the documents referred to by the appellant but pleaded duress in executing of these large number of documents. The witness examined by Respondent 1 in his cross-examination admitted his signature or that of the representative of company on invoices, debit notes and on ST-1 Form. The respondent had led no evidence in respect of fraud or duress apart from self-serving statement. The consignment of goods was sent from the month of November, 1985 to January 1986. The respondent had signed large number of documents during this period. However, no complaint was made to any person or authority or even to the plaintiff. It is a denial of receipt of goods without any basis raised only in the written statement filed. Such stand is wholly bereft of any truth and is thus rejected.
Hon'ble High Court of Karnataka in RFA No.155 of 2006 (SP) between Sri. N. Narayanappa and Ors V/s Sri. Pillappa.
"24. The defendant, being a key witness to the transaction, held crucial information that could have clarified the circumstances surrounding the creation of the alleged agreement of sale. By not stepping into the witness box, the defendant deprived the plaintiff of the 74 Com.OS No.25855/2017 opportunity to cross-examine him on these allegations. This failure to present himself as a witness not only weakens his case but also prevents the Court from evaluating the veracity of his claims through cross- examination, which is a crucial mechanism in the judicial process to test the credibility of evidence. The significance of this omission is heightened because the defendant, as a party to the disputed transaction, had personal knowledge of the facts, which makes his testimony indispensable."
1966 SCC Online SC 194 between Jahuri Sah and Ors V/s Dwarika Prasad Jhunjhunwala and Ors., (Hon'ble Supreme Court) "9. In our opinion the High Court was right in holding that the Act is inapplicable to this case. The plaintiffs and defendants were admittedly co-owners of the property. As the property had not been partitioned it was open to either or both the parties to occupy it. The defendants occupied the property except a small portion which was in possession of the tenants. The plaintiffs acquiesced in it because of an agreement between the parties that the defendants would pay Rs. 200/- p.m. as compensation to them. The defendants did not dispute that there was an agreement about payment of compensation between the parties but their plea was that the amount agreed to was Rs. 501- p.m. and not Rs. 200/- p.m. Their contention in this behalf was rejected by the High Court which accepted the plaintiffs' contention that the amount was Rs. 200/- p.m. This part of the High Court's judgment is not challenged before us by Mr. Sarjoo Prasad. He, however, challenged the finding of the High Court that the claim to compensation was 75 Com.OS No.25855/2017 enforceable. But before we deal with this matter it would be appropriate to deal with the reasons given by him in support of the contention that the suit was not maintainable. He reiterated the argument urged before the trial court based upon the non-joinder of Shankarlal as a party to the suit. According to him, as Shankarlal's adoption is not been established by the plaintiffs he was also a co-owner of the property and his non-joinder as a party to the suit rendered the suit incompetent. The High Court has pointed out that the plaintiffs have clearly stated in para 1 of the plaint that Shankarlal had been, given in adoption to Sreelal. In neither of the two written statements filed on behalf of the defendants has this assertion of fact by the plaintiffs been specifically denied. Instead, What is stated in both these written statements is that the defendants have no knowledge of the allegations made in para 1 of the plaint. Bearing in mind that O.VIII, r. 5, C.P.C. provides that every allegation of fact in the plaint, if not denied specifically or by necessary implication or stated to be not admitted in the pleading of the defendant shall be taken to be admitted, to say that a defendant has no knowledge of a fact pleaded by the plaintiff is not tantamount to a denial of the existence of that fact, not even an implied denial. No specific issue on the question of adoption was, therefore, raised. In the circumstances the High Court was right in saying that there was no occasion for the parties to lead any envidence on the point. However, Sreelal who was examined as a witness on behalf of the plaintiffs has spoken about the fact of adoption and his statement can at least be regarded as prima facie evidence of adoption. It is true that he admits the existence of a deed of adoption and of its non-production in the court. This admission, however, would not render oral evidence 76 Com.OS No.25855/2017 inadmissible because it is not by virtue of a deed of adoption that a change of status of a person can be effected. A deed of adoption merely records the fact that an adoption had taken place and nothing more. Such a deed cannot be likened to a document which by its sheer force brings a transaction into existence. It is no more than a piece of evidence and the failure of a party to produce such a document in a suit does not render oral evidence in proof of adoption inadmissible. We, therefore, agree with the High Court that the plaintiffs' suit for partition of their half share in the property was not incompetent because Shankarlal was not made a party thereto. We will now deal with the other ground urged by Mr. Sarjoo Prasad in support of his contention that the suit is not maintainable. Under sub-s. (2) of s. II of the Act as it stood on the date of the suit a claim for eviction of a tenant or a claim for recovery of possession of a building and claim for rent thereof had to be made before the Rent Controller alone and consequently the jurisdiction of the civil court for the enforcement of such claims was ousted. But, for the provisions of this section to apply, the relationship between the plaintiff and the defendant should be that of a landlord and tenant. If they are co-owners of the property and the property is held by them as tenants-in- common no question of relationship of landlord and tenant comes into being as between them. The common case of the parties is that they are in fact co-owners of the property and the respective shares of the two families have not been demarcated. They, therefore, continue to be tenants in common. It is true that the entire property (save a small portion which was in possession of tenants) is in the actual occupation of the defendants which means that they are in occupation not only of their share in the property but also of the 77 Com.OS No.25855/2017 plaintiffs' share. That fact, however, would not make them tenants of the plaintiffs. Under the law each tenantin-common is entitled to the possession of the entire property, that is, to every part of it though its right to possession is limited to the extent of the share in the property. The mere fact that the defendants agreed to pay compensation to the plaintiffs for their occupation of the entire property (ignoring the portion in possession of the tenants) would not bring into existence a relationship of landlord and tenant. By this agreement, the parties never intended to constitute a relationship of landlord and tenant between the defendants and their co-owners. The provisions of the Act are, therefore, inapplicable. The second ground urged by Mr. Sarjoo Prasad, therefore, fails.
43. However Learned counsels for defendants No.1 and 4 have relied upon following common caselaws on admissions and argued that, the plaintiff has neither denied the evidence of DW1 nor he has elicited anything from his mouth to disbelieve the veracity of said witness. Under such circumstances, there is no ground to casually discard evidence of said witness. The relevant portions of caselaws are culled out as under: -
AIR 1992 P&H 252 between Mela Ram V/s Shiromani Gurudwara Parbandhak Committee, 78 Com.OS No.25855/2017 Amritsar (Hon'ble High Court of Punjab and Haryana).
"11. ..... It is well established rule of evidence that a party should put to each of its opponent's witness so much of his case as concerns that particular witness. If no such questions are put, the Courts presume that the witness account has been accepted."
MANU/SC/0991/2003 between Saikou Jabbi V/s State of Maharashtra (Hon'ble Supreme Court) "14. So far as compliance with Section 42(2) is concerned, the statement of PW-1 to the effect that he had informed his superior remained unshaken and there was even no cross-examination to point out any falsity in the said statement. The note of intelligence information was placed on record vide Exh.16-A to substantiate the testimony of PW-1. That being so the High Court was justified in holding that the provisions of Section 42(2) had been complied with.
15. Coming to the plea regarding non-compliance of Sec.55 of the Act, as rightly submitted by learned counsel for the respondent-State, there was not even any argument advanced on that score before the trial Court and the High Court. Even otherwise also the evidence of the investigating officer about safe custody of the contraband articles have not been challenged or shaken in the cross-examination. That being the position we are not inclined to accept the plea that there was non- compliance with the requirements of Sec.55 of the Act."
79 Com.OS No.25855/201744. Thus on going through aforesaid evidence adduced by both parties, aforesaid provisions of Transfer of property Act and Evidence Act relied upon by defendants side and the above case-laws, it is crystal clear that a mortgage deed required to be compulsory attested under evidence, needs to be signed by minimum two witnesses and same to be proved by examining atleast one of such witness. However as already stated above neither Ex.P3 mortgage deed is attested by witnesses nor it is registered as required under law. Hence in view of aforesaid caselaws relied upon by counsels for Defendants No.1 and 4, Ex.P3 is invalid and not admissible in evidence. Further Defendants No.1 and 4 have seriously denied and disputed the validity, admissibility and genuineness of aforesaid Mortgage Deed.
45. However as rightly contended by plaintiff, the so called signatory of Ex.P3 mortgage deed has not stepped into witness box to deny execution of said document by him. Moreover as per DW1, said 80 Com.OS No.25855/2017 witness has no impediment to conduct the case or to enter into witness box. Moreover, DW1 has admitted that no action has been taken by Defendant no.1 after coming to know alleged fabrication of mortgage deed. Hence adverse inference can be drawn against said witness of defendant with regard to allegations of fabrication of said document by plaintiff.
46. However mere non proving of said aspect does not absolve the burden of plaintiff to prove execution of said document and it's admissibility in evidence for any purpose. As already stated above, it clearly shows that, according to plaintiff himself only Srinivas Raju, who is said to be one of promoter of defendant No.1 has signed Ex.P3 and none from defendant No.4 HUF have signed said documents. The said aspect has been categorically admitted by PW1 and it is not in dispute that, the suit schedule property exclusively belongs to HUF of defendant No.4. Mere the fact that the Kartha of D4 HUF was also one of promoter of defendant No.1 company, cannot be a ground to automatically hold defendant 81 Com.OS No.25855/2017 No.4 liable under Ex.P3 Mortgage deed, in the absence of valid execution of said document. As already stated above, the date of Ex.P3 has been seriously disputed and it is not attested as per law. The defendants have also sufficiently proved that, the document is hit by Section 49 of Transfer of property Act for want of Registration and attestation and it is also hit by provisions Registration and Stamps Act. These all circumstances, and the grounds urged by defendants No.1 and 4 are sufficient to hold that, plaintiff has failed to prove that defendant No.1 and 4 have executed Ex.P3 mortgage deed by depositing of title deeds of suit schedule property. On the other hand, defendants No.1 and 4 have sufficiently proved that said mortgage deed is invalid, void and opposed to law. Further when defendants have proved that, the aforesaid mortgage deed is void, invalid, inadmissible and opposed to law, plaintiff is not entitled for any direction for sale of suit schedule property for recovery of admitted debt. Accordingly Issue 82 Com.OS No.25855/2017 Nos.1 and 8 are answered In the Negative and Additional Issue dated 05.12.2025 is answered In the Affirmative.
47. Issue No.2 and 6:- The plaintiff has specifically contended that, defendant No.1 had agreed to repay the aforesaid loan of Rs.5 Crores with interest at the rate of 24% per annum and as such it is entitled to recover the said loan amount from with above interest from defendant No.1 and 4. As far as liability of defendant No.4 is concerned, Defendant No.4 has already proved that though the schedule property belongs to it, it is neither a party to the suit transaction nor it is a party or a signatory to above Mortgage Deed. It is further contended by defendant No.4 that plaintiff has no right over suit schedule property and since said property was not offered by this defendant, it is not entitled for relief claimed in the suit. Defendant No.4 has also asserted that it is not a guarantor to aforesaid loan and there is no privity of contract between plaintiff and said defendant. Further, Plaintiff has clearly admitted in 83 Com.OS No.25855/2017 para 7 of the plaint that, the suit schedule land is owned by defendant No.4 Hindu Undivided Family of A.S Muniswamy Raju and as such said defendant is not only bound by Mortgage Deed, but they agreed to subject the said land to the liability of defendant No.1 company. However as already concluded in foregoing paras, the very execution of aforesaid mortgage deed by defendant No.4 and it's validity are not proved to the satisfaction of the Court and it is also proved to be inadmissible in evidence.
48. Further plaintiff asserts that, defendant No.1 company had agreed to obtain signatures from all those persons necessary to further more perfectly assuring to mortgage the suit schedule property, same is not proved and the elaborate reasons mentioned on Issue No.1 have already rendered the Ex.P3 mortgage deed invalid under law. For these reasons, it is crystal clear that, absolutely there is no nexus between suit loan and Defendant No.4 HUF and as such they are not entitled to repay either the suit loan or any interest as claimed by plaintiff.
84 Com.OS No.25855/2017Further, as already concluded on Issue No.1, defendant No.1 has not denied and disputed borrowing of suit loan from plaintiff, but they have seriously denied that they had agreed to repay the same with interest and they have also denied it's repayment as per terms of Ex.P3 mortgage deed, which is held to be invalid under eyes of law. Plaintiff has claimed interest on aforesaid Rs.5 Crores from 25.05.2012 i.e. last date of loan installment. Plaintiff further contends that, since said defendant was unable to repay the said money along with interest at the rate of 24% per annum, said defendant sought for more time and also unconditionally agreed to repay the said amount in fresh timeline and defendant No.1 agreed to repay the said loan within 120 days from date of execution of said deed that is on or before 04.08.2014. It further agreed to pay interest at the rate of 24% per annum on said amount from May 2012. On the other hand defendant No.1 asserts that, there was no agreement to pay interest and entire claim of plaintiff for 85 Com.OS No.25855/2017 Rs.10,86,77,568/- are denied. Defendant No.1 in Para 8 of it's written statement has specifically denied that it had agreed to pay interest of 24% and it has disputed the correctness of ledger produced by plaintiff. It is has further denied execution of aforesaid Mortgage Deed dtd.04.04.2014 by it, acknowledging the said debt. During cross examination, PW1 has denied the suggestions of defendant No.1 that in view of good business relationship, plaintiff has not charged any interest on aforesaid loan amount. However, when plaintiff has failed to prove the validity and lawful execution of aforesaid mortgage deed, there is no reason to believe that defendant No.1 had agreed to pay interest at the rate of 24% per annum as per clause B of said mortgage deed. Further, absolutely no other independent evidence is put forth by plaintiff to prove that defendant No.1 had agreed to repay the said loan amount with said interest nor anything is elicited from the mouth of PW1 to prove the said aspect. For these reasons, it is incumbent upon this 86 Com.OS No.25855/2017 Court to hold that, plaintiff has failed to prove that defendant No.1 had agreed to pay interest at 24% per annum on aforesaid loan of Rs.5 Crores and as such plaintiff is not entitled for any such interest on said loan. Accordingly Issue Nos.2 and 6 are answered In the Negative.
49. Issue Nos.5 and 7:- Defendant No.3 has contended that State Bank of Mysore, Bank of India and State Bank of India sanctioned financial facility of Rs.97 Crores and Rs.112 Crores to defendant No.1 and said defendant has executed loan and security documents in favour of said banks. Thereafter State Bank of Mysore and Bank of India who are collectively referred as assignor banks have assigned debt of borrower along with interest, rights and underline security in favour of defendant No.3 vide Assignment Agreement dtd.29.03.2014 and 30.10.2013 respectively. In pursuant to said Assignment Deed, defendant No.3 stepped into shoes of assigner banks under Sec.5(2) of SARFAESI Act. Thereafter State Bank of India appointed the lead 87 Com.OS No.25855/2017 bank by the members of consortium and mortgaged documents were executed and held by the lead bank on behalf of all lenders. Subsequently SBI assigned all debts along with rents to defendant No.2 Phoenix ARC and schedule A and B of the suit are mortgaged in favour of all consortium lenders vide Memorandum of entry dtd.06.12.2008 and 29.08.2012. It is further averred that no permission was sought by defendant No.1 to create mortgage in favour of plaintiff in 2014 and the mortgage created in favour of consortium lenders were prior in time.
50. On the other hand plaintiff has averred in Para 17 of plaint that, contrary to Clause No.11 of Ex.P3 Mortgage Deed dtd.04.04.2014, defendant No.4 executed a Mortgage Deed dtd.28.05.2015 in favour of defendant Nos.2 and 3 companies, without notifying execution of the same to plaintiff, with sole intention to defeat the claim of plaintiff. It is further contention of plaintiff that, since the Mortgage Deed of plaintiff is executed prior to above Mortgage Deed, claim of plaintiff precedes the defendant Nos.2 and 3 88 Com.OS No.25855/2017 to realize sum of money from suit schedule property. Hence plaintiff asserts that, the deed of mortgage executed in favour of defendant Nos.2 and 3 are not binding upon plaintiff and it does not dilute right of plaintiff over suit schedule property and remedies thereof.
51. It is further case of plaintiff that, Defendant No.4 being owner of land described in suit schedule A property by signifying their readiness and willingness to repay the loan had offered the said property as a security to above loan vide above Mortgage Deed. Plaintiff learned about execution of deeds in favour of defendant Nos.2 and 3 after receiving aforesaid reply dtd.26.02.2016, for which no consent of plaintiff was sought and defendant Nos.1 and 4 were estopped from creating further interest or charge as per Clause No.11 of the Mortgage Deed. It is further averred that as per extension of Mortgage Deed dtd.28.05.2015, defendant No.4 represented by A.M Ramaraju, Kartha of A.S Muniswamyraju HUF has 89 Com.OS No.25855/2017 offered said land as a surety on mortgage to defendant No.2 and 3. Additionally defendant No.4 offered to part with suit schedule property in order to repay the amount due to plaintiff. Hence defendant Nos.2 and 3 could not have executed the said deed without consent of plaintiff.
52. However despite filing it's written statement, defendant No.3 has not put forth any evidence in support of it's contention to prove that mortgage created in favour of consortium lenders i.e. SBM, Bank of India and SBI was prior to the date of Ex.P3 Mortgage deed nor any documents are placed before this Court. Hence defendant No.3 has failed to prove Issue No.5 in it's favour.
53. But, as far as entitlement of plaintiff to seek declaration that mortgaged deed dated 28.05.2015 executed in it's favour is not binding upon it is concerned, as already concluded on above issues, plaintiff has failed to prove, the validity, execution and admissibility of Ex.P3 mortgage deed to the satisfaction of the Court. Further plaintiff has also 90 Com.OS No.25855/2017 failed to prove personal liability of defendant no.4 either to repay the suit loan to plaintiff or to subject suit schedule property as security to said loan. Under such circumstances, the aforesaid contentions raised by plaintiff challenging right of defendant No.4 to subject suit schedule property towards the loan borrowed from defendant No.2 and 3 or mortgage created in favour of consortium lenders do not hold any water. Hence, plaintiff is also not entitled for relief of declaration claimed with regard to non binding of mortgage deed executed in favour of defendant No. 2 and 3. Hence Issue No.7 is not proved by plaintiff. For these reasons, Issue Nos.5 and 7 are answered In the Negative.
54. Issue No.4:- Defendants No.1 and 4 have taken specific contentions in their written statements that, since there was neither mortgage nor agreement to mortgage, impleading of defendant No.2 to 4 was not necessary. It is further contended by defendant No.1 that said defendants are impleaded to create misunderstanding between 91 Com.OS No.25855/2017 defendant no.1 and defendant No.2 to 4, and as such suit is bad for misjoinder of parties.
55. However as already stated above, plaintiff has specifically asserted that, Ex.P3 Mortgage deed has been executed by one Srinivas Raju, who is said to be director of defendant No.1. Further, defendant No.1 company and its promoter A.M Raju being kartha of defendant No.4 have offered suit schedule property as a security to suit loan, holding plaintiff entitled to realize the loan dues by sale of suit schedule property. It is further contended by plaintiff that, defendant No.1 company had agreed to obtain signatures from all those persons necessary to further more perfectly assuring to mortgage the suit schedule property.
56. Further it is case of plaintiff that, contrary to Clause No.11 of Ex.P3 Mortgage Deed dtd.04.04.2014, defendant no.4 executed a Mortgage Deed dtd.28.05.2015 in favour of defendant Nos.2 and 3 companies, without notifying execution of the 92 Com.OS No.25855/2017 same to plaintiff, with sole intention to defeat the claim of plaintiff. Accordingly plaintiff has sought for a relief of declaration that the mortgage deed executed in favour of Defendant No.2 and 3 are not binding upon it. Though defendants have denied said plea of plaintiff, considering, the relief claimed by plaintiff in present suit presence of defendants No.2 to 4 appears to be necessary for effective adjudication of matter in dispute. Hence absolutely no grounds are made out by defendants No.1 and 4 to show that, the suit is bad for misjoinder of parties. Accordingly Issue No.4 is answered in the Negative.
57. Issue No.3:- Defendant No.1 and 4 have specifically denied the execution of aforesaid Mortgage Deed and asserts that since the claim has become time barred all other statements such as existence of mortgage are made only to overcome question of limitation. Defendant No.1 has specifically contended that, since the above amount was paid on 22.05.2012, 24.05.2012 and 93 Com.OS No.25855/2017 25.05.2012, the claim of plaintiff is barred by virtue of limitation as on 25.05.2015 since the very legal notice is issued on 18.12.2015. Further there is no plea of acknowledgment of liability.
58. As per plaintiff the suit loan amount of Rs.5 Crores has been advanced by plaintiff to defendant No.1 in following three tranches, which is not denied by defendant No.1.
Sl.No. Cheque Date Cheque No. Amount (Rs.)
1. 22/05/2012 150171 2,00,00,000=00
2. 24/05/2012 150172 2,00,00,000=00
3. 25/05/2012 150173 1,00,00,000=00 TOTAL 5,00,00,000=00
59. The Learned counsel for plaintiff has relied upon following case-law on limitation and vehemently argued that Ex.P3 Mortgage deed is nothing but an acknowledgment of liability executed on 04.04.2014, which is within period of three years from 25.05.2012. The said counsel has further argued that, under Section 18 of the Limitation Act, an acknowledgment of liability made in writing in respect 94 Com.OS No.25855/2017 of any right claimed by the opposite party and signed by the party against whom such right is claimed made before the expiration of the prescribed period for a suit in respect of such right has the effect of commencing a fresh period of limitation from the date on which the acknowledgment was so signed. The relevant portion of case law is extracted as under:-
(2004) 12 SCC 360 between Food Corporation of India V/s Assam State Cooperative Marketing and Consumer Federation Ltd., and Others (Hon'ble Supreme Court) "14. According to Section 18 of the Limitation Act, an acknowledgment of liability made in writing in respect of any right claimed by the opposite party and signed by the party against whom such right is claimed made before the expiration of the prescribed period for a suit in respect of such right has the effect of commencing a fresh period of limitation from the date on which the acknowledgment was so signed. It is well-settled that to amount to an acknowledgment of liability within the meaning of Section 18 of the Limitation Act, it need not be accompanied by a promise to pay either expressly or even by implication."
60. On the other hand Learned counsel for defendant No.1 has relied upon following case law and vehemently argued that the acknowledgment, if any, has to be prior to the expiration of the prescribed 95 Com.OS No.25855/2017 period for filing the suit, and if the limitation has already expired, it would not revive under this Section. The expiry of the period of limitation prescribed for a suit to recover the amount due, does not destroy the right to the amount, but it bars the remedy. The relevant portions of caselaws relied upon by said counsel are culled out as under:-
AIR 1999 SC 1047 between Sampuran Singh and Ors V/s Niranjan Kaur and Ors., (Hon'ble Supreme Court) "9. In his endeavor, learned counsel for the appellants, referred to Section 18 of the Limitation Act to hold that the acknowledgment by the original mortgagees to the respondents, through the said registered document dated 11th January 1960, the period of limitation is revive which would only start from that date of acknowledgment hence the suit filed in the year 1980 would be within limitation. The said submission is without any force. Section 18, sub-
section (1), itself starts with the words "Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made...". Thus, the acknowledgment, if any, has to be prior to the expiration of the prescribed period for filing the suit, in other words, if the limitation has already expired, it would not revive under this Section. It is only during subsistence of a period of 96 Com.OS No.25855/2017 limitation, if any, such document is executed, the limitation would be revived afresh from the said date of acknowledgment. In the present case, admittedly the oral mortgage deed is in March 1893. If the period of limitation for filing suit for redemption is 60 years then limitation for filing a suit would expire in the year 1953. Thus, by the execution of this document dated llth January 1960 it cannot be held by virtue of Section 18 that the period of limitation is revived afresh from this date."
ILR 1990 Kar 3518 between Banhatti Co- operative Spinning Mill Ltd., V/s Karnataka Electricity Board. (Hon'ble High Court of Karnataka) "9. It is relevant to notice that a claim may be barred by time but nevertheless it does not disappear nor it is extinguished. In the event the claim is barred by time, all that happens is that such a claim cannot be enforced in a Court of Law by way of a suit or other proceeding to which the Limitation Act applies. The expiry of the period of limitation prescribed for a suit to recover the amount due, does not destroy the right to the amount. It only bars the remedy. Section 27 of the Limitation Act, 1963 only provides that at the determination of the prescribed period of limitation limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished. Thus Section 27 in terms applies only where a suit for possession of property has become barred by limitation. The Limitation Act with regard to 97 Com.OS No.25855/2017 personal actions bars the remedy without extinguishing the rights. It is only in the case of recovery of possession of any property on the determination of the period of limitation prescribed by the Limitation Act, not only the remedy is lost but the right is also extinguished. But it is relevant to notice that there is a distinction between actions for recovery of debts and those for recovery of possession of property. A debt does not cease to be due merely because it cannot be recovered through a Court of Law by filing a suit, after the expiration of the period of limitation prescribed under the Act for instituting the suit. Thus in all personal actions, the right subsists although the remedy is no longer available. It is on this principle, a creditor whose debt becomes barred by time by reason of expiry of the period of limitation can even realise the debt by any other method other than by way of a suit. ....."
Hon'ble Supreme Court in Civil Appeal No.6144/2024 between K.P Khemka & Anr. V/s Haryana State Industrial and Infrastructure Development Corporation Limited & Ors., "2. ..... By the said judgment, the High Court dismissed the writ petitions and rejected the contention of the appellants herein that if a debt is time barred under the Limitation Act, 1963, the same cannot be recovered by resorting to the Haryana Public Moneys (Recovery of Dues) Act, 1979 (for short "the Recovery of Dues Act") read with the State Financial Corporation Act, 1951. In so holding, the Division Bench applied the well established principle that 98 Com.OS No.25855/2017 the Limitation Act, which applies to Courts, merely bars the remedy and does not extinguish the debt.
12. It is well settled that the laws of limitation only bar the remedy and do not extinguish the right, except in cases where title is acquired by prescription. We may note here that V.R Kalliyanikutty (supra) did not dispute the principle that the statue of limitation only bars the remedy and does not extinguish the debt. After considering this principle it went onto hold that there was no enlargement of right in the Kerala Revenue Recovery Act. ..."
61. Further, learned counsel for defendant No.4 has also relied upon following case law and vehemently argued that when a debt becomes time-barred, it does not become extinguished but only unenforceable in a court of law.
AIR 1958 SC 328 between Bombay Dyeing & Manufacturing Co. Ltd., V/s The State of Bombay and Ors., (Hon'ble Supreme Court) "In American Jurisprudence, Vol. 34, page 314, the law is thus stated :
"A majority of the courts adhere to the view that a statute of limitations, as distinguished from a statute which prescribes conditions precedent to a right of action, does not go to the substance of a right, but only to the remedy. It does not extinguish the debt or preclude its enforcement, unless the debtor chooses to 99 Com.OS No.25855/2017 avail himself of the defence and specially pleads it. An indebtedness does not lose its character as such merely because it is barred; it still affords sufficient consideration to support a promise to pay, and gives a creditor an insurable interest."
20. In Corpus Juris Secundum, Vol. 53, page 922, we have the following statement of the law :
"The general rule, at least with respect to debts or money demands, is that a statute of limitation bars, or runs "against, the remedy and does not discharge the debt or extinguish or impair the right, obligation, or cause of action."
29. It has been already mentioned that when a debt becomes time-barred, it does not become extinguished but only unenforceable in a court of law. ...."
62. The ratios laid down in aforesaid case-laws on the question of limitation relied upon by both parties are well founded and same cannot be disputed. However, in present facts and circumstances of the case, date of limitation for recovery of suit loans has to be reckoned under article 19 of Limitation Act, which provides for period of 3 years from date of advancement of loan i.e. from 25.05.2012, which is date of payment of last tranch of the loan. Hence in normal course, the period of limitation to file suit 100 Com.OS No.25855/2017 expires on 24.05.2015. However present suit is filed by plaintiff on 26.07.2017, which is after 5 years 2 months from the date of payment of last installment loan amount. Though plaintiff asserts and contends that, Ex.P3 mortgage deed was dated 04.04.2014 was executed by plaintiff is in the form of acknowledgment of debt, plaintiff has failed to prove the validity of said document or to prove that said document amounts to acknowledgment of debt as per elaborate reasons mentioned on Issue No.1 and additional Issue. It is further proved that, Ex.P3 mortgage deed is void and invalid and it has no legal sanctity in the eyes of law. Under such circumstances, though defendant No.1 does not deny borrowing of suit loan of Rs.5 Crores from plaintiff, the period of limitation for filing present suit expires on 24.05.2015 itself. For these reasons, defendant no. 1 and 4 have sufficiently proved that, the present suit filed by plaintiff on 25.07.2017 is barred by limitation. Accordingly Issue No.3 is answered In the Affirmative.
101 Com.OS No.25855/201763. Issue No.9:- In view of reasons and findings given on Issues No.1 to 8 and additional issue dated 05.12.2025, the plaintiff is not entitled for any relief claimed in the suit and the suit deserves to be dismissed with costs. Further, the amount of Rs.9,00,00,000/- already deposited by plaintiff before this Court, in pursuant to directions of Hon'ble High Court of Karnataka in Writ Petition No. 4668/2025 deserves to be refunded to defendant no.1 after expiry of the appeal period along with interest accrued on said amount. Hence, for the above reasons and finding given on Issue Nos.1 to 8 and additional issue dated 05.12.2025, following is;
ORDER
The suit of the plaintiff is
dismissed with costs.
The amount of Rs.9,00,00,000/-
deposited by defendant No.1 before
this Court in pursuant to directions of Hon'ble High Court of Karnataka in Writ Petition No.4668/2025 shall be 102 Com.OS No.25855/2017 refunded to defendant No.1 after expiry of the appeal period along with accrued interest.
Draw decree accordingly.
Office to send soft copies of the judgment to the e-mail Id's of the both parties, if email IDs are furnished.
[Dictated to the Stenographer Grade-III, directly on the computer, typed by her, then corrected and signed by me and pronounced in the Open Court, dated this the 1st day of April 2026] Digitally signed by ANAND T ANAND T CHAVAN CHAVAN Date: 2026.04.08 16:18:21 +0530 (ANAND T. CHAVAN) LXXXIV Addl.City Civil & Sessions Judge, Bengaluru.
ANNEXURE LIST OF WITNESSES EXAMINED ON BEHALF OF THE PLAINTIFF PW.1 Rohan Agarwal.
LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE PLAINTIFF Ex.P1 Certified true copy of Board Resolution dated 103 Com.OS No.25855/2017 08.01.2016 Computer generated memorandum and Article Ex.P2 Association of the plaintiff company (marked subject to production of certificate U/Sec.65B of the Evidence Act) Original unregistered deed of mortgage dated Ex.P3 & 04.04.2014 executed by the 1st defendant with 3(a) receipt of payment of stamp duty Certified statement of Standard Chartered Bank Ex.P4 from 01.04.2012 to 10.01.2013 in respect of account No.33105155545 Computer generated ledger statement showing the Ex.P5 calculation of interest (marked subject to production of certificate U/Sec.65B of the Evidence Act) Certified copy of memorandum dated 28.05.2015 confirming extension of equitable mortgage Ex.P6 executed by and between the 1st defendant and 2nd defendant Ex.P7 Certificate under Sec.65-B of Indian Evidence Act. Ex.P8 O/c of legal notice dated 18.12.2015 Ex.P9 O/c of legal notice dated 09.02.2016 Ex.P10, Ex.P10 O/c of legal notice dated 10.06.2020 with postal
(a) & receipt and postal acknowledgment
(b) 104 Com.OS No.25855/2017 Ex.P11 The 1st defendant's reply dated 03.07.2020 Ex.P12 Cc of the company petition filed before the Hon'ble & High Court with defendant's counter Ex.P13 Ex.P14 & Copies of reply dtd.30.01.2016 & 26.02.2016.
Ex.P15
Digital certified copy of order in WP
Ex.P16
No.17586/2024.
Copy of document obtained from website of
Ex.P17
Ministry of Corporate Affairs.
LIST OF WITNESSES EXAMINED ON BEHALF OF THE DEFENDANT DW1 Prasad Babu N DW2 K. Rama Govinda Reddy.
LIST OF DOCUMENTS EXHIBITED ON BEHALF OF THE DEFENDANT Certified copy of petition in Company Petition Ex.D1 No.160/2016.
Copy of Board resolution of defendant No.1 Ex.D2 company dated 15.09.2025 Statement of account issued by Bank of Baroda Ex.D3 dated 12.02.2020 Copy of DD No.184704 dated 02.07.2020 of Vijaya Ex.D4 Bank certified by Bank of Baroda 105 Com.OS No.25855/2017 Statement of account of defendant No.1 held in Ex.D5 Bank of Baroda showing entries dated 10.07.2020 Statement of account of defendant No.1 held in Ex.D6 Bank of Baroda showing entries dated 21.07.2020 Statement of account of defendant No.1 held in Ex.D7 HDFC Bank for the period between 01.02.2021 to 28.02.2021 Statement of account of defendant No.1 held in Ex.D8 Bank of Baroda showing entries dated 24.04.2023 Statement of account of defendant No.1 held in Ex.D9 Bank of Baroda showing entries dated 07.06.2023 Statement of account of defendant No.1 held in Ex.D10 Bank of Baroda showing entries dated 29.08.2023 Statement of account of defendant No.1 held in Ex.D11 Bank of Baroda showing entries dated 03.10.2023 Statement of account of defendant No.1 held in Ex.D12 Bank of Baroda for period between 01.11.2023 to 30.11.2023 (only 2 pages i.e. page No.1/11, 4/11) Copy of DD No.077215 of Bank of Baroda dated Ex.D13 20.11.2023 Statement of account of defendant No.1 held in Ex.D14 Bank of Baroda for period between 01.01.2024 to 31.01.2024 (only 2 pages i.e. page No.1/12, 5/12) Copy of DD No.077322 of Bank of Baroda dated Ex.D15 18.01.2024 Ex.D16 Statement of account of defendant No.1 held in 106 Com.OS No.25855/2017 Bank of Baroda for period between 01.02.2024 to 29.02.2024 (only 2 pages i.e. page No.1/12, 3/12) Copy of DD No.077342 of Bank of Baroda dated Ex.D17 09.02.2024 Statement of account of defendant No.1 company Ex.D18 held in Vijaya Bank from 01.04.2018 to 12.09.2018 (04 pages) Statement of account of defendant No.1 held in Ex.D19 Bank of Baroda showing entries dated 25.07.2022 Statement of account of defendant No.1 held in Ex.D20 Bank of Baroda showing entries dated 23.09.2022 Statement of account of defendant No.1 held in Ex.D21 Bank of Baroda showing entries dated 16.11.2022 Statement of Escrow account of defendant No.1 Ex.D22 held in HDFC Bank for the period between 01.08.2022 to 31.08.2022 (03 pages) Statement of account of defendant No.1 held in Ex.D23 Bank of Baroda showing entries dated 05.01.2023 Copy of DD No.076804 of Bank of Baroda dated Ex.D24 24.04.2023 Certified copy of petition in Company Petition Ex.D25 No.161/2016 with verifying affidavit Certified copy of petition in Company Petition Ex.D26 No.160/2016 with verifying affidavit Ex.D27 Certified copy of order sheet of Hon'ble High Court of Karnataka in Company Petition No.160/2016 C/w 107 Com.OS No.25855/2017 Company Petition No.161/2016 Certified copy of order of Hon'ble High Court of Ex.D28 Karnataka in WP No.4668/2025 (GM-CPC) dated 22.03.2025 Certified copy of order of Hon'ble High Court of Ex.D29 Karnataka in WP No.6621/2025 (GM-CPC) dated 22.03.2025 Digital certified copy of Memorandum confirming the extension of Equitable Mortgage dated Ex.D30 16.12.2011 executed by Karta of defendant No.4 A.M.Ramaraju in favour of SBI Bank Digital certified copy of Memorandum of Deposit for creation of further charge for term loan by way Ex.D31 of Mortgage by DTD dated 09.02.2012 executed by A.M.Ramaraju Ex.D32 Certificate U/Sec.63 of BSA, 2023 Ex.D33 Certified copy of Memo dtd.04.02.2020.
Copy of Board Resolution of defendant No.5 dated Ex.D34 02.09.2022.
Copy of certificate of incorporation of defendant Ex.D35 No.5 company (02 pages) Ex.D36 True copy of Board resolution dated 02.09.2022 Relevant two pages of Indian Express newspaper Ex.D37 dated 17.05.2019 showing publication of public notice Ex.D38 Relevant two pages of The Hindu newspaper dated 108 Com.OS No.25855/2017 17.05.2019 showing publication of public notice Relevant two pages of Kannada Prabha newspaper Ex.D39 dated 17.05.2019 showing publication of public notice Relevant two pages of Udayavani newspaper dated Ex.D40 17.05.2019 showing publication of public notice Ex.D41 Certificate U/Sec.65B of Evidence Act Digitally signed by ANAND T ANAND T CHAVAN CHAVAN Date: 2026.04.08 16:18:34 +0530 (ANAND T. CHAVAN) LXXXIV Addl.City Civil & Sessions Judge, Bengaluru.