Bangalore District Court
M/S Sandur Udyog Pvt. Ltd vs Sri. V.Y. Gorphade on 6 April, 2016
IN THE COURT OF XVII ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, BENGALURU (C.C.H.16)
Present: Sri. Ravindra Hegde,
M.A., LL.M.
XVII Addl. City Civil & Sessions Judge.
Dated this 6th Day of April, 2016
O.S.No. 3512/2012
Plaintiff : M/s Sandur Udyog Pvt. Ltd.,
A Company Incorporated under the
Provisions of the Companies Act,
1956, having its registered office
At No.140, Bellary Kudligi Road,
Sandur, District Bellary - 583 119
Rep. by its Director &
Authorized Signatory
Mr. M.S.Srinivasa Rao,
S/o M.Subba Rao,
Aged about 87 years.
[By Sri.B.M.Arun - Adv.]
-Vs-
Defendant : Sri. V.Y. Gorphade
S/o Late Y.R.Ghorpade,
Aged about 73 years,
R/at No.409, Nidhi Apartments,
Nethaji Road, Frazer Town,
Bengaluru -560 005.
[By Sri. J.K., - Adv.]
Date of institution of the suit 21.05.2012
Nature of the suit Money Suit
Date of commencement of 03.12.2013
recording the evidence
2 OS.No.3512/2012
Date on which the judgment 06.04.2016
was pronounced
Total duration Years Months Days
03 10 16
(Ravindra Hegde),
XVII Addl. City Civil & Sessions Judge.
********
JUDGMENT
This suit is filed by the plaintiff for recovery of Rs.1,39,00,000/- [Rupees One Crore Thirty Nine Lakhs only] along with interest at the rate of 13% p.a. from the date of suit.
2. The brief facts of the plaintiff's case is that, the defendant had incorporated a company Vidyuth Thermo Farms Ltd., [VTF] and the said company had availed the loan from KSFC for which the defendant had furnished his personal guarantee dated 31.5.2003 and for the default of his company, the KSFC had taken over the assets of the company on 13.3.2001 and invoked the personal guarantee furnished by the defendant. A Declaration cum Under taking dated 10.10.2008 was sworn to by the defendant and an agreement dated 18.12.2008 is entered into between the plaintiff and the defendant and others. In the agreement 3 OS.No.3512/2012 dated 18.12.2008, the plaintiff and others had agreed to jointly and severally extend their support in arriving at negotiated settlement with KSFC and provide loan to clear the outstanding which was repayable by the defendant on demand with interest. The plaintiff had extended the financial facility to the tune of Rs.1 Crore to the defendant by different pay orders in favour of KSFC as mentioned in the plaint. The defendant by letters dated 19.12.2008, 23.12.2008 and 30.12.2008, has paid this amount to the KSFC. The KSFC by its letter dated 16.1.2009 acknowledge the receipt of the loan payment and closed the loan account. As the loan is advanced by the plaintiff which is repayable by the defendant with interest, the plaintiff by its letter dated 24.4.2009 asked the defendant to make the payment with interest at 13% p.a. within 15 days. The defendant got issued an untenable reply dated 11.5.2009 stating that Rs.1 Crore financial support extended to him was a gift from his elder brother late M.Y. Ghorpade. It is stated that M.Y.Ghorpade had no relation whatsoever with the plaintiff. The plaintiff again gave notice on 15.4.2012 asking the defendant to pay the amount within 15 days. The defendant had got issued untenable reply, but not made the payment. Therefore, the plaintiff had file this suit for recovery of the suit claim amount.
4 OS.No.3512/2012
3. The defendant through his G.P.A. holder appeared and filed the written statement in detail. The defendant has contended that the suit is not maintainable and is frivolous and vexatious. The defendant has stated that he is not liable to pay the suit claim amount to the plaintiff. The defendant has mainly contended that the suit is clearly barred by limitation, as it is filed after 3 years from the date of alleged loan claimed by the plaintiff and is not within the limitation. It is stated that even if the amount stated by the plaintiff for the loan payable on demand, as stated in Article 21 of Limitation Act, same would be due within 3 years from the date of payment mentioned by the plaintiff. Therefore, the suit is clearly barred by limitation. It is also contended that even if the demand made by the plaintiff on 24.4.2009, is considered as the beginning point of the limitation, then also, the suit is barred as is filed on 21.5.2012. The defendant has also contended that the suit is bad for non-joinder of necessary parties. It is stated that in the alleged agreement stated by the plaintiff, there are two other companies, Sandur Laminates Ltd., and Sandur Manganese and Iron Ore Ltd., and they are not parties to the present suit. On this ground, the suit is prayed to be dismissed. The defendant has stated that the defendant is kartha of the Ghorpade family 5 OS.No.3512/2012 consisting of his wife and his son now deceased and his daughter and he is the absolute owner of several properties mentioned in the written statement which is ancestral one. The defendant has stated that he was working in the plaintiff company and the other group of companies till 1990 and thereafter, he incorporated Vidyuth Thermo Farms Pvt. Ltd., in the year 1991 and approached the KSFC for loan of Rs.112 Lakhs. But the KSFC had delayed the payment and during this time, as the defendant was in urgent need of funds, the plaintiff company which was headed by brother of the defendant offered to purchase the property measuring 6.48 Acres in Sy.No.189, Lakshmipura Taluk Sandur for Rs.3,24,000/- and agreement was executed on 5.10.1992. It is stated that in 1993, S.L.L. which is another company headed by defendant's brother offered to purchase the remaining land in Sy.No.161, 162/1, 163, 164, 165 and 166 totally measuring 27.67 Acres for Rs.9,68,450/- and agreement was executed on 29.9.1993 and Rs.5,00,000/- was paid as advance amount. As per this agreement, the defendant was required to obtain permission from the competent authority for conversion. It is stated that even after conversion of 27.67 acres, the company is not coming to get the sale deed executed and though the balance 6 OS.No.3512/2012 consideration amount is paid, the plaintiff and other agreement holders have not come forward to get the sale deed executed for the reasons best known to them. But they have forced the defendant to sign endorsement stating that the defendant had received the entire sale consideration amount and handed over the possession of the property which is illegal. The defendant has stated that the agreement holders have taken forcible possession of the property from the defendant. The defendant has also stated about the loan obtained from KSFC and steps taken by the KSFC for recovery of the loan and also stated about filing of Misc. Petition No.36/2003 by the KSFC and attachment and sale of the schedule property in the said case.. He has also stated about one time settlement arrived and has stated that he has requested his elder brother to assist him for making repayment from his side, for which his elder brother agreed and at the same time, the plaintiff and SLL and SMIORE did not want the properties to be sold for non-payment of its dues. Therefore, with the instructions of M.Y.Ghorpade, he negotiated with the KSFC for OTS Rs.One Crore and accordingly, the plaintiff paid the balance loan amount to KSFC in September and December, 2008. The defendant has stated that the payment made by the plaintiff to KSFC was 7 OS.No.3512/2012 not a loan at all and it does not require any repayment. It is stated that even the agreement dated 18.1.2008 was drafted by the plaintiff and defendant was made to sign much after the date. It is stated that in a letter sent to the defendant, it has been stated that the payment was shown as loan only to satisfy the auditors of the company. It is stated that the defendant has received a letter dated 24.4.2009 given the plaintiff demanding Rs.One Crore, for which the defendant has given reply. The defendant has stated that he is facing constant pressure and undue influence from the plaintiff. It is stated that defendant is not in good health and he is suffering from mental disability for a number of years and he cannot always comprehend his interest in the correct perspective due to mental illness and age, he is not in sound state of mind and he has been under medical treatment since 1990 and has frequent losses of memory. The defendant has also stated that the agreements relied by the plaintiff are not valid agreements, as there is no free consent given by the defendant and it was got executed by undue influence and is not valid in the eye of law and is also got executed by coercion. Even it is stated that even on reading the agreement dated 18.12.2008, it can be said that the defendant in his right state of mind would not execute such an agreement, it 8 OS.No.3512/2012 is even stated that his daughter is not having share in the property. It is stated that when the daughter of the defendant claimed 1/4th share in the property, on which the plaintiff has claim under two agreements of sale, the plaintiff has created the agreement. It is stated that when the plaintiff company has become aware that these properties would become the subject matter of a claim of suit filed by daughters of the defendant, the plaintiff prepared the agreement and called the defendant to sign it, under coercion, undue influence and fraud. On all these grounds, the suit is prayed to be dismissed.
4. On these pleadings, my learned Predecessor has framed the following Issues: -
1) Whether the plaintiff proves that it had extended financial assistance to the tune of Rs.One Crore to the defendant by way of separate pay orders drawn on State Bank of Mysore and Syndicate Bank as mentioned in para-5 of the plaint and the defendant has acknowledged the receipt of the said amount and the defendant had agreed to repay the said amount with interest at 13% within 15 days and he has executed a declaration cum undertaking dated 10.10.2008 and agreement dated 18.12.2008?
2) Whether the defendant proves that the suit for the plaintiff is barred by limitation?9 OS.No.3512/2012
3) Whether the defendant proves that suit of the plaintiff is bad for non-joinder of necessary parties?
4) Whether the plaintiff is entitled to recover an amount of Rs.One Crore with interest at 13% from 24.4.2009 till the payment i.e., totally Rs.1,39,00,000/-?
5) What Decree or Order?
5. In support of the plaintiff's case, PW.1 is examined. Ex.P1 to P11 are marked. For defendants, DW.1 to 3 are examined. Ex.D1 to D22 are marked.
6. For plaintiff, no argument is addressed. Heard the arguments of the defendant's counsel. Perused the records
7. My answer to the above issues are as under:-
Issue No.1: In the Negative Issue No.2: In the Affirmative Issue No.3: In the Affirmative Issue No.4: In the Negative Issue No.5: As per final order, for the following:
REASONS
8. Issue No.1:- The plaintiff has filed this suit for recovery of Rs.1,39,00,000/- along with interest at 13% p.a. from the date of suit. The plaintiff has alleged that the defendant had availed financial assistance from KSFC and the KSFC had attached the properties of the defendant and at 10 OS.No.3512/2012 that time, the plaintiff had paid Rs.One Crore to the KSFC on behalf of the defendant and one time settlement is arrived and this amount is repayable by the defendant with interest as per the agreement. The defendant is stated to be not in good health and he has filed the written statement through his power of attorney holder wife and denied the alleged loan transaction. The defendant has stated about some other agreement of sale executed in respect of the properties in favour of the plaintiff and other two companies and also stated that in terms of the agreement of sale, the possession of the properties has been taken by the plaintiff forcibly and also stated that the agreements relied by the plaintiff is not genuine agreements and there is no free consent of the defendant and agreement was obtained by coercion and undue influence.
9. On behalf of the plaintiff, one of the Director by name K.Ganesh is examined as P.W.1 and has stated the alleged loan transaction of the defendant with the plaintiff. In the cross-examination, he has stated that from 2000 to 2009, he was working in the accounts section of the plaintiff company and admitted that he was not party to the suit transaction, but he is only aware of the transaction. He has 11 OS.No.3512/2012 admitted that the plaintiff company is part of Sandur Group of Companies and has denied that the brother of the defendant M.Y.Ghorpade is one of the Promoters of the Sandur Group of companies and has stated that the Ghorpade family has no connection with the plaintiff company. He has stated that he does not know that the defendant is suffering from mental illness. He has stated that the loan of Rs.One Crore given to the defendant has been shown in their accounts and admitted that no such accounts produced before the court. He has denied that Rs.One Crore was given for clearing the loan of KSFC by the plaintiff as well as other two companies. He has stated that the entire amount was paid by the plaintiff compay. He has admitted that the plaintiff company and Sandur Laminates have taken loan from Manipal Soubhagya Nidhi Ltd., wherein the defendant was shown as borrower, but the loan amount is utilized by the plaintiff company and Sandur Laminates. He has admitted that the property was standing in the name of the defendant and property standing in the name of the defendant was pledged in Manipal Soubhagya Nidhi Ltd., for obtaining the loan and admitted that the plaintiff and Sandur Lamiantes have repaid the loan to Manipal Soubhagya Nidhi Ltd., with interest and he has admitted that if the plaintiff 12 OS.No.3512/2012 had not repaid the loan, the entire loan would come on the defendant. He has admitted that the defendant had given said land as security for the loan taken from KSFC and there was court order for attachment of the land for recovery of the loan. He has admitted that if the KSFC had sold the property, the plaintiff company would have lost all the rights over the said land and admitted that in order to save the said land, the plaintiff company, Sandur Laminates and Sandur Manganes and Iron Ore Ltd., have negotiated for one time settlement with the KSFC and paid the amount. He has admitted that the loan closure and settlement was done in the interest of the plaintiff company and also stated that it was done to save the defendant. He has denied that in Ex.P1 amount of Rs.One Crore is not mentioned. The witness has stated that in the agreement dated 18.12.2008, the payment of Rs.One Crore is mentioned in para-22. He has denied that transaction of Rs.One Crore is mentioned only for auditing purpose. He has admitted that the defendant has not written any letter to the plaintiff requesting them for loan of Rs.One Crore. He has admitted that they have not taken any action against the defendant for recovery of Rs.One Crore immediately after receiving the reply to the notice dated 24.4.2009.
13 OS.No.3512/2012
10. The plaintiff has produced the Declaration cum Undertaking alleged to have been executed between the defendant and the plaintiff and other two companies on 10.10.2008 as Ex.P1. In this agreement, there is reference about the agreement of sale entered into between the plaintiff and defendant and two other companies in respect of other properties and also there is reference about the loan obtained from Manipal Soubhagya Nidhi Ltd., for the benefit of the plaintiff and other two companies by creating charge on the property of the plaintiff which is agreed to be sold to the plaintiff and other companies. There is also reference to the loan of Rs.One Crore and also payment of the plaintiff and other two companies to extend cooperation in arriving at negotiated settlement with the KSFC and Bank of India and also provide loan for honouring one time settlement in the KSFC. Another agreement dated 18.12.2008 is produced at Ex.P8. In this agreement, there is a clause stating that SMIORE and SLL agreed to jointly and severally extend their support in arriving at a negotiated settlement with the KSFC and also provide loan payable on demand with interest at State Bank of Mysore's Prima Lending Rate for honouring the OTS of KSFC. On the basis of these two documents, the plaintiff contends about the loan transaction with the 14 OS.No.3512/2012 defendant. A copy of the letter sent by the defendant to the KSFC on 19.12.2008 by accepting of the OTS of Rs.One Crore is produced as Ex.P2. Ex.P3 is another letter of the defendant to the KSFC with pay order for Rs.39,43,500/- stating that balance of Rs.50,00,000/- will be paid within the period of 45 days as agreed. Another letter dated 20.12.2008 by the defendant to the KSFC informing about the payment of the entire amount of Rs.One Crore as per the OTS is produced as Ex.P4. Letter of the KSFC to the VTF company of the defendant informing about the receipt of the amount stating that the accounts have been closed in their books as on the date dated 16.1.2009 is produced as Ex.P5. Copy of the notice issued to the defendant by the plaintiff on 24.4.2009 is produced as Ex.P10 in which recovery of Rs.One Crore with interest at 13% has been claimed by the plaintiff company. The reply given to this letter is marked as Ex.P6, in which the liability of the defendant to pay the amount has been denied. Ex.P7 is the legal notice dated 15.4.2012 asking for payment and Ex.P9 is the reply given to the said notice denying the liability of the defendant to pay the amount. The authorization given to P.W.1 is marked as Ex.P11. 15 OS.No.3512/2012
11. On behalf of the defendant, his wife and power of attorney holder has evidence as DW.1 and also examined DW.2 and 3. DW.1 in her evidence has stated the contentions taken in the written statement. In the cross-examination, she has stated that during 2009, her husband was suffering from depression and was not keeping good health. She has admitted that Ex.P4 was executed in 2009. She has admitted that Ex.P4 was addressed by her husband to KSFC and admitted that payments mentioned in Ex.P4 were made by the plaintiff for paying it to KSFC. She has stated that Ex.P8 was obtained by force. She has stated that except Ex.D19, she has not produced any documents to show that mental status of her husband is not good. She has denied that after 1991, her husband has set up new companies and he was the Director of several companies and he was managing his affairs. She has admitted that if the plaintiff had not paid the amount to the defendant for paying to the KSFC, the KSFC would have proceeded and would have sold the entire properties. She has stated that the plaintiff also had interest over the property, so they have paid the amount. She has denied that the defendant is a healthy person and on behalf of him, she is giving false evidence.
16 OS.No.3512/2012
12. Two Doctors who are said to have treated the defendant have given evidence as DW.2 and 3 and have stated that the defendant has been suffering from Bipolar Affective Disorder with multiple episodes of depression. In the cross-examination, DW.2 ha stated that he came to that defendant was suffering from Bipolar affective disorder and depression memory loss from 1991 and he do not know have any medical records to show the same, but he is having medical prescription given to him. He has stated that he do not know whether the defendant set up a company by name Vidyuth Thermo Farms Pvt. Ltd., and defendant was Managing Director of it. He has stated that wife of the defendant was accompanying him, whenever he used to come to his hospital.
13. DW.3 in his cross-examination has stated that he has examined the defendant in 2004 for the last time and stated that he do not have any medical records for treating the defendant as he is a family doctor. He has stated that he do not know that the defendant was dealing with the statutory authorities regarding the affairs of his company and he do not know that the defendant had execute several documents in his family affairs also.
17 OS.No.3512/2012
14. For the defendants, notices issued on behalf of Sandur Laminates Ltd., to the defendant on 10.7.2009 is produced as Ex.D1 and D8. They are produced to show that another company also claimed that the defendant has availed the loan and it has provided the loan of Rs.One Crore for discharging the loan availed from KSFC. A letter by the Managing Director of the plaintiff to the defendant stating that Rs.One Crore OTS amount has been shown to the defendant to satisfy the auditors is produced as Ex.D2. Copy of the letters sent by daughter of the defendant to the plaintiff putting up her claim to the property is produced as Ex.D3. S.P.A. given to DW.1 is marked as Ex.D4. Copy of the order in MFA are produced as Ex.D5 and D6 and the arbitration notice is marked as Ex.D7. Two agreement of sales in respect of the properties of the defendant executed in favour of the plaintiff and another company S.L.L. are produced as Ex.D9 and 10. Endorsement in Ex. D10 is marked as Ex.D11. The documents to show that land conversion order has been obtained as per the agreement and the property is standing in the name of the defendant are produced as Ex.D12 to D18. The certificate given by DW.2 stating about mental illness of the defendant is marked as Ex.D19. Copy of the plaint in OS.No.7/09 filed before the Senior Civil Judge, Kudligi by 18 OS.No.3512/2012 daughter of the defendant against the plaintiff and also the defendant seeking partition, is marked as Ex.D20. The written statement filed by the defendant in the said suit is marked as Ex.D21. Copy of the petition in MFA is marked as Ex.D22.
15. On looking to the evidence, pleadings and documents produced by the parties, the case of the plaintiff is that the defendant had availed the loan from KSFC and was defaulter and when he had not cleared the loan, the KSFC has filed a case for attachment of the property in respect of which an agreement of sale was executed in favour of the plaintiff by the defendant and at that time, the plaintiff came to the rescue of the defendant and agreements have been entered between the plaintiff and the defendant and other two companies, by which the plaintiff has agreed to help the defendant to overcome the difficulties with the KSFC and one time settlement has been arrived with the KSFC as per which Rs.One Crore was to be paid to the KSFC and the plaintiff has paid this amount and this amount is repayable by the defendant and for recovery of this amount, the present suit.
19 OS.No.3512/2012
16. The plaintiff's case is mainly relying on Ex.P1 and P8. The defendant has contended that in respect of the properties of the defendant, agreement of sale was executed by the defendant in favour of the plaintiff Sandur Udyog Pvt. Ltd., for sale of 6.48 acres in Sy.No.189 and the plaintiff had paid the advance consideration amount and subsequently, the entire sale consideration amount was paid. But the plaintiff has not got executed the sale deed from the defendant, but it has forcibly taken possession of the property. Similarly, the defendant also contends about another agreement entered into in respect of 27.67 acres of land by S.L.L. with the defendant and payment of advance consideration amount and balance amount has been paid, but forcibly the said company has taken possession of the property without getting the sale deed executed. The defendant has contended that he had obtained the loan of Rs.112 Lakhs from the KSFC and as the loan amount was not cleared, the property was attached. At that time, when the case was pending before the Hon'ble Prl. District and Sessions Court, Bengaluru Rural District, then the plaintiff and other two companies have come for settlement of the loan transaction with the KSFC and they have paid the amount of Rs.One Crore to the KSFC by which loan has been 20 OS.No.3512/2012 cleared. Therefore, the defendant taking loan from KSFC for his company VTF Pvt. Ltd., and the loan becoming overdue is not in dispute. The documents produced at Ex.D2 to D4 by the defendant show that the defendant had sent letter to the KSFC informing about the OTS and the payment of Rs.One Crore to the KSFC. The letter of the KSFC produced at Ex.P5 also show that total amount of Rs.One Crore has been paid by the plaintiff company and accounts have been closed in the books of KSFC.
17. DW.1 in her cross-examination has clearly admitted that all the payments mentioned in Ex.P4 were paid by the plaintiff to her husband for making payment to KSFC. Therefore, it is not in dispute that the KSFC loan has been cleared and it is the plaintiff who had paid the entire Rs.One Crore to the KSFC as per the OTS. The plaintiff has claimed for recovery of this amount from the defendant.
18. The plaintiff's case is relying on Ex.P1 and P8. But in the entire Ex.P1 and P8, there is no clear condition stating that payment of Rs.One Crore made by the plaintiff to the KSFC is to be repaid by the defendant to the plaintiff company with interest as stated. But in Ex.P1, declaration cum undertaking dated 10.10.2008, there is reference to 21 OS.No.3512/2012 agreement of sale with the plaintiff company and other two companies, obtaining loan from Manipal Soubhagya Nidhi Ltd., in the name of the defendant and clearing of the loan by the plaintiff and other two companies etc. Regarding this, there is even suggestion put to P.W.1 in the cross- examination and he has admitted that if the plaintiff company had not paid the amount to Manipal Soubhagya Nidhi Ltd., the defendant would have been in trouble and it is also admitted that the loan taken from Manipal Soubhagya Nidhi Ltd., is utilized only for the plaintiff company and other two related companies. In Ex.P1 it is stated that the defendant requested the plaintiff and other two companies to extend their support in arriving at negotiated settlement with KSFC and provide loan for honouring the one time settlement in the aforesaid case and irrevocably agreed that he will execute the sale deeds in respect of the lands in 1(b) and 1(c), in favour of S.L.L. and SUPL respectively, immediately on being called upon to do so by SLL and SUPL. Therefore, as per this, the plaintiff and other two companies have been requested to extend the cooperation to arrive at negotiated settlement with the KSFC, but there is no specific averments that Rs.One Crore payable to the KSFC is to be repaid by the defendant with interest to the plaintiff.
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19. Similarly, in Ex.P8 which is dated 18.12.2008, there is similar averments, in which it is mentioned that SMIORE, SLL and SUPL agree to jointly and severally extend their support in arriving at a negotiated settlement with KSFC and also provide loan, payable on demand with interest at State Bank of Mysore's Prime Lending Rate for honouring the OTS of KSFC and the defendant agrees to execute the sale deeds in respect of the lands mentioned in 1(b) and 1(c), in favour of SLL and SUPL, respectively. On looking to both these agreements, they do not specifically say about any loan transaction between the SUPL or other two companies who are the parties to these agreements with defendant. It also does not show that the plaintiff has paid Rs.One Crore or it has agreed to pay Rs.One Crore to the KSFC as loan to the defendant which has to be repaid with interest as stated. But these agreements only say that these three companies have agreed to extend their support in arriving at a negotiated settlement with the KSFC and also provide loan payable on demand. There are absolutely no documents to show that this Rs.One Crore has been paid as a loan, though it is mentioned that they have agreed to provide loan on demand. The other averments in these agreements show that the agreement is more particularly in respect of the execution of 23 OS.No.3512/2012 the sale deed in respect of the properties of the defendant which are agreed to be sold to the SUPL and to SLL as per Ex.D9 and D10. Even in the written statement, the defendant had admitted the execution of agreement of sale as per Ex.D9 and D10 and also receipt of the consideration amount. But the defendant has stated that though entire consideration amount mentioned therein has been paid, the plaintiff and another company have not come forward to get the sale deed executed for the reasons best known to them and they have forcibly taken possession of the property. On looking to the contentions of the defendant, it appears that the plaintiff has cleared the loan of the defendant in KSFC, as it has interest in the property which are agreed to be sold by the defendant to the plaintiff by agreement and to save that property, the loan of the KSFC has been cleared by the plaintiff.
20. Apart from this, the defendant has contended that these agreements are not executed in his sound state of mind and free consent is not there and it was got executed by undue influence. Some clauses in these documents, in which the defendant has even stated that his children is also not having right in the property is highlighted to contend that it was not a genuine agreement entered into between the 24 OS.No.3512/2012 parties. The plaintiff's case has been mainly relying on Ex.P1 and P8. As stated above, though the payment of Rs.One Crore by the plaintiff on behalf of the defendant is even admitted by DW.1, these documents at Ex.P1 and P8 do not show that this Rs.One Crore has been given to the defendant as a loan by the plaintiff. Interestingly, there is a notice sent by SLL to the defendant as per Ex.D1 and D8. In this notice, the counsel for the SLL who had issued the notice has stated that, it is the SLL who has cleared the loan of KSFC by paying Rs.One Crore. In Ex.P1 and P8 also, it is not stated as to who have to make the payment. There are three companies involved in Ex.P1 and P8, but only one company i.e., S.U.P.L. is before the court in this case and other two companies are not parties to the present suit. Though the payment of Rs.One Crore by plaintiff or the other two companies, has not been disputed, there are absolutely no materials to show that it was a loan transaction entered into between the parties. The plaintiff is a private limited company, it has to maintain the accounts. There are no account statement or some other documents to show that Rs.One Crore has been advanced to the defendant as a loan. Interestingly, the plaintiff company is not doing money lending business. Why the plaintiff company has come forward to give the loan of Rs.One Crore 25 OS.No.3512/2012 to the defendant is also not explained. The evidence of P.W.1 does not give any such details. What prompted the plaintiff to clear the loan of the defendant in the KSFC and why it has taken interest in this, is also not clear.
21. Apart from this, there is a letter of the Director of the plaintiff company which is confronted to P.W.1 and marked as Ex.D2. In this letter, it is stated that KSFC had agreed to OTS of Rs.One Crore and it has to be shown as loan to the defendant to satisfy the auditors and companies have to enter into agreement with the defendant to make this payment. The defendant is asked to sign the agreement and it is stated that he will explain the contents separately. This letter would show that to satisfy the auditors, the payment of Rs.One Crore has been shown as loan in the records of the plaintiff. Apart from this in the agreement Ex.P1 and P8 itself, the main importance is given to execution of the sale deed and not for repayment of the loan. Though the payment of Rs.One Crore has been made by the plaintiff, it appears to have not taken any other documents in support of this alleged loan transaction. The KSFC loan is cleared in December 2008, but the present case is filed in 2012. Though the letter was sent to the defendant on 24.4.2009 as per 26 OS.No.3512/2012 Ex.P10 asking the defendant to repay the loan of Rs.One Crore with interest, the suit is not filed within 3 years from the date of demand. Even in the cross-examination of DW.1, there is nothing elicited about the liability of the defendant to clear this amount, but the questions are restricted to the ill- health of the defendant.
22. On looking to the materials placed in this case, there is no clear evidence to show that the defendant had availed the loan of Rs.One Crore from the plaintiff for clearing the outstanding dues in the KSFC. Though there is admission of the DW.1 that the plaintiff has paid Rs.One Crore to the defendant for clearing the loan of the KSFC, there is no material to show that this amount was advanced as a loan. Moreover, in the agreement relied by the plaintiff, there is condition for execution of sale deeds by the defendant and there is no clear statement about the alleged loan transaction stated by the plaintiff. Therefore, the plaintiff has failed to prove that the plaintiff had given loan of Rs.One Crore to the defendant and the defendant had agreed to repay the same with interest at the rate of 13% p.a. as stated by the plaintiff. Acordingly, this issue is answered in the negative.
27 OS.No.3512/2012
23. Issue No.2 :- The defendant has mainly contended that the suit is barred by limitation. It is stated in the written statement that the suit is not filed within 3 years from the alleged loan given by the plaintiff and as per Article 21 to the Schedule of the Limitation Act, the suit is barred by limitation. It is stated that the loan amount was paid according to the plaintiff on 19.12.2008, 23.12.2008 and 30.12.2008 and the present suit is filed on 21.5.2012. From the date of alleged payment, the suit is not filed within 3 years. The plaintiff has produced the documents showing the payment of Rs.One Crore to KSFC. In Ex.P4 letter of the defendant to the KSFC, it is stated that on 26.9.2008, Rs.10,60,000/- has been paid by Pay Order and on 23.12.2008, Rs.39,43,500/- has been paid and subsequently on 30.12.2008, Rs.50,00,000/- has been paid by Pay Order. All these payments of Rs.One Crore is made by the plaintiff to the defendant and then the defendant paid to KSFC according to the plaintiff. Therefore, as stated by the defendant, the payment of Rs.10,60,000/- was made on 26.9.2008, Rs.39,43,500/- was made on 23.12.2008 and Rs.50,00,000/- was paid on 30.12.2008. As per Article 21 of the Limitation Act, for recovery of amount under loan agreement that shall be payable on demand, the period of 28 OS.No.3512/2012 limitation is 3 years and the time begins to run from the date on which the loan is made. In the agreement Ex.P8, it is mentioned that the loan is repayable on demand with interest. Therefore, this alleged transaction would fall in Article 21 of the Limitation act, for which from the date of the loan within 3 years, the suit is to be filed. In this case, the final installment of the loan is dated 30.12.2008 and from that date within 3 years, the suit ought to have been filed for recovery. If it was a loan transaction and amount was advanced, with condition that loan is to be repaid on demand, the suit ought to have been filed before 30.12.2011. Therefore, the present suit filed in May 2012, is clearly barred by limitation. Since this is stated to be loan transaction under an agreement, that it shall be payable on demand, the suit ought to have been filed within 3 years from the date of advancing the said loan by the plaintiff. Since the plaintiff has stated that, it has paid the amount for clearing the KSFC loan and KSFC loan was cleared in installments starting from 26.9.2008 to 30.12.2008, the payment made by the plaintiff if any would be before that date and from that date within 3 years, the suit ought to have been filed and as the suit is filed in May, 2012, it is clearly barred by 29 OS.No.3512/2012 limitation. Accordingly, this issue is answered in the affirmative.
24. Issue No.3 :- The defendant has also contended that the suit is bad for non-joinder of necessary parties. The plaintiff's claim is mainly based on the alleged declaration cum undertaking Ex.P1, dated 10.10.2008 and also Ex.P8 agreement dated 18.12.2008. According to the plaintiff, as per this agreement, loan has been advanced. Apart from the plaintiff company, Sandur Manganese and Iron Ore Ltd., which is shown as SMIORE and Sandur Laminates Ltd., which is shown as SLL are parties to the agreement. Both these companies are not made parties to the present suit. It is stated in this agreement that all these companies would extend their support in arriving at negotiated settlement with KSFC and would provide loan payable on demand with interest. Therefore, the amount payable to KSFC is agreed to be paid by all these companies as per these agreements. Apart from this, another company Sandur Laminates Ltd., i.e., S.L.L. has also issued a legal notice as per Ex.D8 to the defendant in which it is stated that it has paid the amount to the defendant for clearing the loan of the kSFC. Therefore, even the S.L.L. which is party to Ex.P1 and P8 also claims 30 OS.No.3512/2012 that it has paid the amount of Rs.One Crore to clear the loan of the KSFC. Even the plaintiff has the same claim. Admittedly, all the 3 companies are parties in the agreements and in the agreement it is provided that all these companies would extend loan to the defendant for clearing the KSFC dues. Therefore, as the plaintiff's claim is on the basis of Ex.P1 and P8, undertaking and agreement and there is no other agreement entered into between the plaintiff and defendant separately regarding this alleged loan of Rs.One Crore, both two other companies would be necessary parties to the suit. Therefore, the suit is clearly bad for even non- joinder of necessary parties. Though it is necessary to give direction to the plaintiff to make the other two companies as necessary parties to the suit, in this case as the suit is barred by limitation, and as even the transaction alleged by the plaintiff is not proved, it is not necessary to issue such direction now. Moreover, in spite of bringing it to the notice of the plaintiff by the defendant in the written statement, the plaintiff has not taken care to implead these necessary parties who are parties to the agreements. Accordingly, this issue is answered in the affirmative.
31 OS.No.3512/2012
25. Issue No.4 :- For the discussion, made on above issues, the plaintiff has failed to prove the alleged loan transaction of the plaintiff with the defendant and also the liability of the defendant to pay Rs.One Crore to the plaintiff towards the alleged loan transaction. The existence of loan transaction between the parties is not proved. Though the payment is admitted, it is not proved that there was a loan transaction and the defendant had agreed to repay the loan of Rs.One Crore with interest. Moreover, the suit is clearly barred by limitation and the suit also suffers from non- joinder of necessary parties. For all these reasons, the plaintiff is not entitled for the releifs prayed in the suit.
26. Issue No.5:- For the discussion made on the above issues, the suit of the plaintiff is to be dismissed. Accordingly, following order is passed :-
ORDER Suit of the plaintiff is dismissed.
In the circumstances of the case, there is no order as to costs.
(Dictated to the judgment writer, transcribed by him, corrected and then pronounced by me in the open court, on this the 6th day of April, 2016).
(Ravindra Hegde), XVII Addl. City Civil & Sessions Judge, Bengaluru.32 OS.No.3512/2012
ANNEXURE List of witnesses examined for plaintiff:
P.W.1 K.Ganesh List of documents exhibited for plaintiff:
Ex.P1 Declaration Cum undertaking Ex.P2 to P5 Letters Ex.P6 Reply Ex.P7 Notice Ex.P8 Agreement Ex.P9 Reply Ex.P10 Letter Ex.P11 Authorisation
List of witnesses examined for defendant:
D.W.1 Smt.Urmilaraje Ghorpade D.W.2 Dr.B.Kapur DW.3 Dr.Srinath
List of documents exhibited for defendant:
Ex.D.1 Copy of notice
Ex.D.2 Letter
Ex.D.3 Letter
Ex.D.4 Special Power of Attorney
Ex.D.5 Certified copy of order in MFA.13831/07
Ex.D6 Certified copy of
Ex.D7 Notice
Ex.D8 Original notice
Ex.D9 Certified copy Agreement of sale
33 OS.No.3512/2012
Ex.D10 Certified copy Agreement of sale
Ex.D11 Certified copy of endorsement
Ex.D12 to 14 Certified copy of conversion order Ex.D15 Certified copy of letter Ex.D16 & 17 Certified copy of Tax paid receipt Ex.D18 Certified copy of self assessment extract Ex.D19 Certificate Ex.D20 Certified copy of plaint in OS.7/09 Ex.D21 Certified copy of written statement in OS.7/09 Ex.D22 Certified copy of petition in MFA.15030/07 XVII Addl. City Civil & Sessions Judge, Bengaluru.