Madras High Court
Arvind Bagrecha vs K.Mekala on 1 September, 2022
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
C.S.(Comm. Div.)No.306 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment reserved on 21.07.2022
Judgment pronounced on 01.09.2022
CORAM
The Hon'ble Mr. Justice SENTHILKUMAR RAMAMOORTHY
Civil Suit(Comm.Div)No.306 of 2020
Arvind Bagrecha ... Plaintiff
vs.
1.K.Mekala
2.K.Divya
3.K.Nithya
4.V.Prabhakaran ... Defendants
The suit is filed under Order IV Rule 1 & Order XXXVII Rule 2
of Original Side Rules R/W Order VII Rule 1 and Order XXXIV Rules 4 &
5 of Code of Civil Procedure,1908 (a) praying to direct the defendants 1 to 3
to pay the plaintiff a sum of Rs.1,70,00,000/-(Rupees One Crore Seventy
Lakhs only), along with a further interest calculated at the rate of 24% per
annum on the principal sum of Rs.24,44,606/-(Rupees twenty four lakhs
forty four thousand six hundred and six only) from the date of the plaint till
_____________
https://www.mhc.tn.gov.in/judis
Page No.1 of 30
C.S.(Comm. Div.)No.306 of 2020
the date of realization of the amount and also the costs of the suit on some
day to be named by this Court and in default to sell the property described in
the schedule hereunder and apply the proceeds (after defraying there out the
expenses of the sale) in and towards the payment of the sum, interest and
costs and if such proceeds are not sufficient for the payment in full of such
amount, directing the defendants 1 to 3 to pay to the plaintiff the amount of
the deficiency with interest therein at the rate of 24% per annum until
realisation.
For Plaintiff : Mr.K.Surendar
Assisted by Chenthoori
Pugazhendhi
For Defendants : M/s Sarvabhauman Associates
represented by R.Krishna Prasad
JUDGMENT
In a mortgage suit, the plaintiff seeks a decree for a sum of Rs.1,70,00,000/- from the first, second and third defendants. In default, the sale of the mortgaged property is prayed for.
_____________ https://www.mhc.tn.gov.in/judis Page No.2 of 30 C.S.(Comm. Div.)No.306 of 2020
2. The plaintiff stated that he is a financier by profession. He was introduced to the first defendant and her husband by a mutual acquaintance. In June 2008, the first defendant and her husband approached the plaintiff for a loan in relation to the construction of a party hall-cum-residence in land ad measuring 3000 square-foot. As security for the loan, they offered the property described in the schedule to the plaint by stating that the said property was worth more than Rs.40 lakhs.
3. According to the plaintiff, the first defendant and her husband agreed to pay interest at the rate of 3% per month on delayed payments. On 18 June 2008, the first disbursement of Rs. 90,000 was made. On the same day, the first defendant and her husband created an equitable mortgage over the property described in the schedule to the plaint in favour of the plaintiff by depositing the original title deed of Sale Deed bearing Document No. 2871 of 1996. By way of abundant caution, the plaintiff stated that the first defendant and her husband were also called upon to execute a general power of attorney deed in his favour. Upon such request, the General Power of Attorney Deed dated 19 June 2008 (the General Power of Attorney) was executed in favour of the plaintiff, and registered as Document No. 2380 of _____________ https://www.mhc.tn.gov.in/judis Page No.3 of 30 C.S.(Comm. Div.)No.306 of 2020 2008. In addition, since the fourth defendant was known both to the plaintiff and the first defendant, an agreement of sale was executed in favour of the fourth defendant on 30 July 2008. This agreement of sale was registered as Document No. 2520 of 2008. However, the plaintiff stated that this document was not acted upon.
4. The plaintiff stated that the second installment of Rs.80,000 was paid by the plaintiff on 19 July 2008 and that a further disbursement of Rs. 2,25,000 was made on 25 August 2008. The plaintiff relied on letters dated 19 July 2008 and 25 August 2008 by which the first defendant acknowledged the debt and promised to repay the same with interest at the rate of 3% per month. In this manner, the plaintiff states that an aggregate sum of Rs.33,96,200 was disbursed to and received by the first defendant and her husband between 18 June 2008 and 3 March 2012.
5. The plaintiff asserted that the first defendant and her husband were very irregular in repaying the loan. After completing construction of the property described in the schedule to the plaint, the first defendant and her husband moved into the property. They tried to convince the plaintiff to _____________ https://www.mhc.tn.gov.in/judis Page No.4 of 30 C.S.(Comm. Div.)No.306 of 2020 cancel the sale agreement in favour of the fourth defendant because they had identified a purchaser and a dispute arose in relation thereto. The first defendant unilaterally cancelled the General Power of Attorney by a cancellation deed dated 6 August 2012. Thereafter, the first defendant and her husband lodged a false police complaint against the plaintiff and the fourth defendant in Crime No.1989 of 2012, which culminated in C.C. No.394 of 2017, which, in turn, is the subject matter of Criminal O.P. No.11091 of 2019.
6. The plaintiff further stated that the first defendant had instituted a frivolous suit, O.S. No.595 of 2013, on the file of the District Munsif, Ambattur, seeking return of the original title document on the ground that the principal loan amount was only Rs.12,65,000/- and that a sum of Rs.29,66,063/- was recovered by the plaintiff. According to the plaintiff, the claim of the first defendant that her signatures were obtained on blank bond papers is false. The plaintiff stated that the dues were acknowledged by the first defendant and her husband by handwritten letters and demand promissory notes. The first defendant's husband died and was succeeded by defendants 1-3 as his legal heirs. Since they are the legal heirs and _____________ https://www.mhc.tn.gov.in/judis Page No.5 of 30 C.S.(Comm. Div.)No.306 of 2020 successors-in-interest, the plaintiff stated that they are liable to discharge the liability incurred by the first defendant and her husband.
7. The plaintiff stated that an aggregate sum of Rs. 33,96,200/- was disbursed to the first defendant and her husband on the dates and in the manner set out in paragraph 7 of the plaint. As on the date of plaint, it is stated that the aggregate outstanding is a sum of Rs.2,33,97,631/-. This includes the principal outstanding of Rs.24,44,606/-, agreed interest of Rs. 80,21,000/- and agreed late payment charges. Although a sum of Rs.2,33,97,631/- is due, the plaintiff stated that the claim was restricted to Rs.1,70,00,000/-.
8. The first defendant refuted these allegations in her written statement and the second and third defendants adopted her written statement. She stated that a loan of Rs.90,000 was availed of from the plaintiff and that this loan was duly discharged. Subsequently, a loan of Rs. 12,65,000/- was availed of for purposes of constructing a house and the agreed interest thereon was a sum of Rs.9,10,800. By resorting to wrong calculations, the plaintiff recovered a sum of Rs.29,66,063/-. Thus, there _____________ https://www.mhc.tn.gov.in/judis Page No.6 of 30 C.S.(Comm. Div.)No.306 of 2020 was excess recovery. However, the first defendant stated that the plaintiff demanded an additional sum of Rs.14,50,000. When the first defendant and her husband approached a bank in relation to a housing loan, they were shocked to discover that the General Power of Attorney was registered in favour of the plaintiff. Therefore, they cancelled the power of attorney. This resulted in a dispute and the plaintiff refused to return the title document. When the first defendant and her husband made efforts to retrieve the title document, the plaintiff, the fourth defendant and their henchmen forced the first defendant and her husband to affix their signatures on blank stamp papers, promissory notes and other papers. Therefore, the second defendant lodged a complaint in the Ambattur Police Station and instituted the civil suit seeking return of the original title document.
9. The first defendant stated that an equitable mortgage was not created in favour of the plaintiff and that the original document of title is being unlawfully retained. Consequently, it is asserted that the present suit does not qualify as a validly instituted mortgage suit. Besides, the first defendant reiterated that the loan was discharged in full, including in respect of interest liability, and asserted that the suit is an abuse of process. _____________ https://www.mhc.tn.gov.in/judis Page No.7 of 30 C.S.(Comm. Div.)No.306 of 2020
10. In addition, the first defendant stated that all the defendants reside outside the jurisdiction of the Court and that the relevant transactions did not take place at Chennai. Moreover, the first defendant stated that the loan was availed of for purposes of constructing a house and for her children's education expenses. Put differently, the first defendant asserted that the loan was not availed of for purposes of constructing a party hall or for any other commercial purpose. The jurisdiction of the Court was challenged on this ground.
11. The fourth defendant did not file the written statement within time and forfeited his right to do so. Subsequently, by order dated 01.12.2021, the fourth defendant was set ex parte. By taking into account the pleadings and draft issues, the Court framed the following issues:
(1) Whether the first defendant and her deceased husband had availed loan from the plaintiff on various dates between 18.06.2008 to 03.03.2012?
(2) Whether the claim made by the plaintiff is barred by limitation?
_____________ https://www.mhc.tn.gov.in/judis Page No.8 of 30 C.S.(Comm. Div.)No.306 of 2020 (3) Whether the entire cause of action in the present suit had arisen outside the jurisdiction of this Court and hence this Court has no territorial jurisdiction to deal with this case?
(4)Whether the defendants 1 to 3 are jointly and severally liable to pay the plaintiff a sum of Rs.1,70,00,000/- (Rupees one crore seventy lakhs only) as on the date of the plaint?
(5) What other reliefs the plaintiff is entitled to?
12. The plaintiff was examined as PW1. In course of the examination in chief of PW 1, 41 documents were exhibited as Exs.P1 to P
41. Mr. V.Prabhakaran, the fourth defendant was examined as PW2. The first defendant was examined as DW1. In course of the examination in chief of DW 1, 7 documents were exhibited as Exs.D1 to D7. Each witness was cross-examined by learned counsel for the counter-party. Oral arguments on behalf of the plaintiff were addressed by Mr K.Surendar, learned counsel, and on behalf of defendants 1-3 by Mr R.Krishna Prasad, learned counsel. The said parties also submitted written submissions. _____________ https://www.mhc.tn.gov.in/judis Page No.9 of 30 C.S.(Comm. Div.)No.306 of 2020
13. Learned counsel for the plaintiff contended that the plaintiff is a financier by profession. In June 2008, he submitted that the first defendant and her husband, Mr V.K. Kamesh, had approached the plaintiff for financial assistance for undertaking construction activity in the property owned by the first defendant. The loan was required to be repaid with interest at 3% per month. The first disbursement was made on 18 June 2008 and an equitable mortgage over the suit property was created in favour of the plaintiff by depositing the original title deed relating thereto (Exhibit P1). The plaintiff disbursed an aggregate sum of Rs.33,96,200/- in 11 tranches between 18 June 2008 and 3 March 2012. Learned counsel submitted that the receipt of the loan was acknowledged in letters of undertaking (Exs.P3,4,6,7,8,13,14,16,17,18,20,21,22,23,25,26,27,28,29,30 and 37) and by executing promissory notes (Exs. P9,10,11,12,15,19, 24,31,32,33,34 and 35). Learned counsel next contended that the total outstanding is a sum of Rs.2,33,97,631 as per the consolidated statement of account (Ex.P40), but the plaintiff had restricted the claim to a sum of Rs.1,70,00,000/-.
_____________ https://www.mhc.tn.gov.in/judis Page No.10 of 30 C.S.(Comm. Div.)No.306 of 2020
14. Upon the death of the first defendant's husband, learned counsel submitted that defendants 1-3 are his legal heirs and successors-in- interest, and liable for the debts. Therefore, the second and third defendants were arrayed as parties. Since an agreement of sale was executed in favour of the fourth defendant, he was joined as a party although no relief is claimed against him.
15. By referring to the suit filed by the first defendant for return of title documents, learned counsel contended that the creation of the equitable mortgage was admitted. Learned counsel referred to the defences raised by the first defendant and contended that the defences are untenable. With regard to the defence that the loan was repaid, he pointed out that the first defendant relied on Exhibits D6 and D7. In course of cross-examination, in response to questions 64 and 65, DW1 admitted that the plaintiff did not sign the said documents and that these documents were prepared by her husband as per the instructions of her lawyer. With reference to the defence that signatures were obtained by the plaintiff on blank stamp papers, promissory notes and other blank papers on 19 September 2012, learned counsel referred to questions 79 and 80 in course of cross-examination of _____________ https://www.mhc.tn.gov.in/judis Page No.11 of 30 C.S.(Comm. Div.)No.306 of 2020 DW1, and pointed out that DW1 admitted that she was not aware of the incident on 19 September 2012 and, in fact, stated that she did not visit the plaintiff's office on the said date. Learned counsel also referred to the answers of DW 1 to questions 32 to 35 in cross-examination and contended that DW1 even denied the deposition recorded in the earlier suit. Therefore, learned counsel contended that the evidence of DW1 stands discredited and no credibility or weight should be attached thereto.
16. With regard to limitation, learned counsel for the plaintiff contended that the limitation period is 12 years from the date the amount secured by the mortgage becomes payable and that the present suit is clearly within the prescribed period of limitation. Since the plaintiff is a financier by profession, it is stated that the dispute is a commercial dispute as per section 2(1)(c)(i) of the Commercial Courts Act, 2015 (the Commercial Courts Act).
17. Learned counsel for the first, second and third defendants made submissions to the contrary. The first contention was that the suit was barred by limitation. According to learned counsel, the transactions between _____________ https://www.mhc.tn.gov.in/judis Page No.12 of 30 C.S.(Comm. Div.)No.306 of 2020 the plaintiff and the first defendant took place prior to 2012. In relation thereto, the first defendant lodged a police complaint in the year 2012. Therefore, it was contended that the suit should have been filed within three years from 2012. In fact, learned counsel pointed out that the first defendant filed a suit in the year 2013 to recover the unlawfully retained title deed. As regards the creation of a mortgage, learned counsel submitted that the General Power of Attorney was executed in favour of the plaintiff and subsequently cancelled on 6 August 2012. However, the title deed was not handed over with the intention of creating an equitable mortgage. Learned counsel also referred to the agreement of sale executed in favour of the fourth defendant and contended that the said document fortifies the submission that the title deed was not deposited with the intent of creating an equitable mortgage. On this issue, it was pointed out that the agreement of sale does not refer to the deposit of title deed. In fact, by referring to Exhibits P2, P3 and P6, it was contended that the said documents refer to the title document but do not indicate that the title document was deposited with the intention of creating an equitable mortgage. _____________ https://www.mhc.tn.gov.in/judis Page No.13 of 30 C.S.(Comm. Div.)No.306 of 2020
18. The next contention was that the defendants reside outside the jurisdiction of this Court, the suit property also lies outside the jurisdictional limits of this Court, and the transactions relating to the suit took place outside the territorial limits of this Court. Besides, the loan was availed of only for purposes of constructing a house and for the educational expenses of the first defendant's children. Therefore, the dispute is not a commercial dispute as per the Commercial Courts Act.
19. On the merits, it was submitted that the first defendant and her husband repaid the loan in the year 2012 by paying a sum of Rs 29,66,163/-; that the plaintiff failed to adduce evidence with regard to the agreed rate of interest; and that the suit claim comprises interest at an exorbitant rate. According to learned counsel, once the defendants denied execution of the documents, the burden of proof was on the plaintiff to prove that he had disbursed a sum of Rs.33,96,200/- to the defendants. Learned counsel pointed out that the promissory notes exhibited by the Plaintiff have not been filled up. The said documents were not attested by witnesses and therefore they cannot be relied upon. Learned counsel also pointed out that the plaintiff admitted that repayments were made both by cheque and cash _____________ https://www.mhc.tn.gov.in/judis Page No.14 of 30 C.S.(Comm. Div.)No.306 of 2020 but did not provide the details thereof. By adverting to the sale agreement and the failure to purchase the property in terms thereof, it was submitted that the documents exhibited by the plaintiff are unreliable and that the plaintiff failed to establish the claim on merits. Therefore, the suit is liable to be dismissed.
Issue No.2
20. Since the contesting defendants set up limitation as a defence, the said preliminary objection is dealt with first. The suit is framed as a mortgage suit. The plaintiff exhibited the original title deed to the suit property as Exhibit P 1. This is a sale deed bearing Document No. 2871 of 1996 and specifies the name of the first defendant as the purchaser. The plaintiff also exhibited Patta No.3764(Ex.P2), which is also in the name of the first defendant. In addition, various letters of undertaking and promissory notes were exhibited. These documents clearly evidence that the first defendant and her husband availed of loans from the plaintiff. They also indicate that a power of attorney was executed in relation to the loan and that the title deed of the first defendant's property was deposited in that connection (Exs.P3-4, 7-8). Indeed, by letter dated 4 May 2010 (Ex.P28), the first defendant's husband requested for a loan of Rs. 8 to 9 lakhs for _____________ https://www.mhc.tn.gov.in/judis Page No.15 of 30 C.S.(Comm. Div.)No.306 of 2020 purposes of constructing a mini hall, and further stated that he is pledging his house property documents for the above needs. Thus, it is evident that the title deed was handed over as security for the loan.
21. With regard to the creation of an equitable mortgage, the law requires that the mortgagor should deposit the title deeds with the intention to create a mortgage. Since the law does not require the execution of a document, intention to mortgage should be gleaned from the evidence on record. As regards a charge, the law does not prescribe the method of creation thereof and only requires that specific asset(s) should be earmarked as security for an obligation. In M.L.Abdul Jabbar Sahib v. M.V.Venkata Sastri & Sons (Abdul Jabbar)(1969) 1 SCC 573, the Hon'ble Supreme Court specifically examined whether the requirements of Section 59 of the Transfer of Property Act, 1882 (the TP Act) apply in respect of a charge under Section 100 thereof and answered in the negative. As stated above, there is sufficient evidence that loans were taken and that the title deed was deposited as security for the said loan. In the circumstances, it is concluded that the title document was deposited with intention to create a mortgage and that, at a minimum, a charge was created over the property. Article 62 of _____________ https://www.mhc.tn.gov.in/judis Page No.16 of 30 C.S.(Comm. Div.)No.306 of 2020 the Limitation Act 1963 (the Limitation Act), deals with suits to enforce payment of money secured by a mortgage or otherwise charged upon immovable property. The limitation period prescribed therein is 12 years. Article 62 is as under:
Description of suit Period of limitation Time from which period begins to run Art.62. To enforce payment Twelve years When the money sued for of money secured by a becomes due mortgage or otherwise charged upon immovable property.
Thus, in respect of suits to enforce payment of money secured by a mortgage or otherwise charged upon immovable property, the limitation period is 12 years from the date the amount becomes payable. In the suit, the plaintiff seeks to recover amounts that were secured by an immovable property. Therefore, the plaintiff is entitled to rely on Article 62 of the Limitation Act even if the transaction is construed as a charge but not an equitable mortgage. The plaintiff relied strongly on the acknowledgment as on 25 August 2012 (Ex.P37). This statement was executed by the first defendant and her late husband. It was also attested by two witnesses. The document indicates that several loans were availed of between 19 July 2008 and 25 August 2012. The receipt of the first disbursement is acknowledged _____________ https://www.mhc.tn.gov.in/judis Page No.17 of 30 C.S.(Comm. Div.)No.306 of 2020 in Ex.P4, which refers to repayment over 30 months. Even if the limitation period were to be computed from the date when the first tranche was repayable as per Ex.P4, which is 30 months from 19 July 2008, i.e. on or before 18 January 2011, the limitation period would end in January 2023. If computed from the date of Ex.P37, it would expire on 24 August 2024. The suit was presented on 16 October 2020. Therefore, the suit is not barred by limitation.
Issue No.3
22. Issue No.3 pertains to whether this Court has territorial jurisdiction. The plaintiff asserted that the first defendant and her late husband approached the plaintiff at his office in Chennai seeking financial assistance. According to the plaintiff, the original title deed was deposited with the plaintiff at his office in Chennai and the letters of undertaking, letters of acknowledgment of debt and promissory notes were executed at Chennai. At the outset, it should be noticed that the plaintiff filed an application for leave to sue (Application No. 2548 of 2020), which was allowed by order dated 3 November 2020. The defendants did not file an application to revoke leave. Although the first, second and third defendants _____________ https://www.mhc.tn.gov.in/judis Page No.18 of 30 C.S.(Comm. Div.)No.306 of 2020 denied that the loan transactions took place at Chennai, it is noticeable that the letters of undertaking were addressed to the plaintiff who resides in Chennai. Therefore, it is clear that at least a part of the cause of action arose at Chennai. Therefore, the preliminary objection on territorial jurisdiction is overruled.
23. The first, second and third defendants also raised the objection that the dispute does not constitute a commercial dispute. On the contrary, the plaintiff contended that the dispute is a commercial dispute. The plaintiff asserted that he is a financier. This contention is corroborated by the documents on record. For instance, the letter of undertaking dated 26 August 2008 (Ex.P7), expressly refers to the plaintiff as a financier. Even otherwise, the documents on record evidence that several loans were taken over a period of time by the first defendant and her husband from the plaintiff. These documents indicate that the plaintiff is in the business of extending loans. Thus, there is sufficient evidence that the plaintiff is in the business of providing loans. As per section 2 (1) (c) (i) of the Commercial Courts Act, ordinary transactions of financiers qualify as commercial disputes. Hence, this suit is a commercial dispute that is maintainable before the Commercial Division.
_____________ https://www.mhc.tn.gov.in/judis Page No.19 of 30 C.S.(Comm. Div.)No.306 of 2020 Issues 1, 4 and 5
24. All these issues relate to the merits of the claim. The plaintiff relied heavily on two documents. The first of these is the acknowledgment executed on 25 August 2012 (Ex.P37), which is subsequent to the cancellation of the General Power of Attorney. This document is signed by both the first defendant and her late husband and was attested by two witnesses. By this document, the first defendant acknowledged receipt of an aggregate sum of Rs.33,33,200 between 19 July 2008 and 25 August 2012. Although the first to third defendants endeavoured to discredit and disown this document, they have failed to establish that this document is fabricated or that it was executed under undue influence or coercion. It appears from this document that loans were availed of in 11 tranches. As regards serial numbers 6,9,10 and 11 therein, the first defendant also specified the monthly interest rate of 3%. By contrast, no agreed rate of interest is specified as regards other entries.
25. The second document on which considerable reliance is placed by the plaintiff is the statement of account (Ex.P40). This document is signed by the plaintiff but not by the contesting defendants. There is also _____________ https://www.mhc.tn.gov.in/judis Page No.20 of 30 C.S.(Comm. Div.)No.306 of 2020 no evidence of the statement of account being forwarded to the said defendants for their confirmation. The loan disbursement entries in this statement of account tally partly but not entirely with Exhibit P 37. In the statement of account, the principal outstanding is shown as Rs. 24,44,606/-. While the contesting defendants asserted that the loan was fully repaid by paying an aggregate sum of Rs.29,66,063/-, the only documents placed on record to prove the assertion were Exs.D6 and D7. Indeed, the answer of DW1 to Q.76, in this regard, undermines the defence and warrants reproduction:
“Q76: Can you please state what is the document filed by you to show that the admitted loan is repaid? A: I do not know, only my lawyer knows.” In relation to Exs.D6 and D7, which are unsigned photocopies of statements/ledger accounts relating to the loans, DW1 stated as under in response to Q.No. 64:
“Q.64: (Exs.D6 and D7 are shown to the witness) Can you please state if the plaintiff's signature is available anywhere in these documents?
_____________ https://www.mhc.tn.gov.in/judis Page No.21 of 30 C.S.(Comm. Div.)No.306 of 2020 A: No. These documents were prepared by my husband as per instructions of my Advocate at Ambattur” Therefore, materiality and weight cannot be attached to Exs.D6 and D7. Hence, the assertion of the first to third defendants with regard to repayment of Rs.29,66,063/- is rejected. The plaintiff, however, acknowledged receipts towards both principal and interest in the statement of account (Ex.P40). If added, the total amount acknowledged as received towards interest is Rs.12,52,680/- and the total amount acknowledged as received towards principal is Rs.9,51,594/-. These two amounts aggregate to about Rs.22,04,274/-. In the absence of credible evidence from the contesting defendants that higher amounts were paid, these acknowledgments/admissions by the plaintiff of payments by the contesting defendants are liable to be accepted. Thus, as against the principal borrowing of about Rs.33,33,200 across about 11 tranches, there is an admission that Rs.22,04,274/- was repaid. _____________ https://www.mhc.tn.gov.in/judis Page No.22 of 30 C.S.(Comm. Div.)No.306 of 2020
26. With regard to interest, the letters under which some of the tranches were availed of specify a rate of interest of 3% per month, which is 36% per annum. They also provide for late payment charges. As per Section 7 of the Tamil Nadu Moneylenders Act, 1957, read with the relevant Government notification, the ceiling on interest on a secured loan is 9% per annum. Since it was concluded earlier that the plaintiff is a financier, he falls within the definition of a moneylender under the above enactment. Therefore, by taking into account that this is a secured loan, the first, second and third defendants are liable to pay interest at 9% per annum from the date of the respective loans. In order to arrive at the outstanding, interest should be applied on each tranche under Ex.P37 at 9% per annum from the date of the respective disbursement until 31.08.2022(the date preceding the date of judgment) and the aggregate amount due should be arrived at. This amount should be set off against the sum of Rs.22,04,274/-, which was admittedly received from the contesting defendants as per Ex.P40.
27. The calculation of the gross outstanding as on 31.08.2022 is set out in a table below:
_____________ https://www.mhc.tn.gov.in/judis Page No.23 of 30 C.S.(Comm. Div.)No.306 of 2020 If the sum of Rs.22,04,270/- is deducted from the gross outstanding of Rs.68,80,602/-, the net outstanding as on 31.08.2022 is Rs.46,76,328/-. _____________ https://www.mhc.tn.gov.in/judis Page No.24 of 30 C.S.(Comm. Div.)No.306 of 2020 This amount should be paid on or before 30.11.2022. In the event of default, further interest shall be payable thereon at 9% per annum from 01.09.2022 until realisation.
28. While concluding that the suit is within the period of limitation, it was also concluded that the loan is secured by an equitable mortgage or charge. Whether construed as an equitable mortgage or charge, the mortgagee or charge holder has the right to bring the secured asset for sale upon default in paying the debt within the stipulated deadline. With regard to an equitable mortgage, such power is traceable to Section 58(f) read with Section 67 of the TP Act and, with regard to a charge, Section 100 read with 58(b) thereof. Therefore, in the event of default by the first to third defendants in making payment on or before 30.11.2022, the plaintiff would be entitled to bring the suit schedule property for sale so as to realise the dues from the sale proceeds. If the sale proceeds are insufficient for such purpose, the plaintiff is entitled to recover the shortfall from the first to third defendants. Since the plaintiff succeeded as regards the principal claim but not the rate of interest, the plaintiff is entitled to proportionate costs. The first to third defendants are liable to pay a sum of Rs.1,00,000/- towards _____________ https://www.mhc.tn.gov.in/judis Page No.25 of 30 C.S.(Comm. Div.)No.306 of 2020 court fees and a further sum of Rs.2,00,000/- towards lawyer's fees and expenses.
29. In the result, defendants 1 to 3 are directed to pay the plaintiff the sum of Rs.46,76,328/- on or before 30.11.2022. The first to third defendants are also directed to pay a sum of Rs.3,00,000/- as costs towards court fees, lawyer's fees and expenses on or before 30.11.2022. In the event of default, the plaintiff shall be entitled to take appropriate action to bring the suit schedule property for sale and to realise amounts due and payable, including interest on Rs.46,76,328/- at 9% per annum from 01.09.2022 until realisation and costs, from the sale proceeds.
01.09.2022
Internet : Yes
Index : Yes
rrg
Plaintiff's witnesses:
1.Mr.M.Aravind Bagrecha : P.W.1
2.Mr.V.Prabhakaran : P.W.2
Defendants' witness:
1.Mrs.K.Mekala : D.W.1
_____________
https://www.mhc.tn.gov.in/judis
Page No.26 of 30
C.S.(Comm. Div.)No.306 of 2020
Documents exhibited by the Plaintiff:
Sl.No. Exhibits Date Particulars of Documents
1. Ex.P1 25.09.1996 Original Sale Deed
2. Ex.P2 07.12.2004 Original Patta bearing No.3764 in the name of the first
defendant
3. Ex.P3 18.06.2008 Photo copy of the letter of undertaking
4. Ex.P4 19.07.2008 Certified copy of the letter of undertaking
5. Ex.P5 30.07.2008 Original Sale Agreement
6. Ex.P6 25.08.2008 Certified copy of the letter of undertaking
7. Ex.P7 26.08.2008 Photocopy of the letter of undertaking
8. Ex.P8 30.12.2008 Certified copy of the letter of undertaking
9. Ex.P9 08.01.2009 Original Promissory Note executed by Mr.V.K.Kamesh
10. Ex.P10 10.01.2009 Original Promissory Note executed by Mr.V.K.Kamesh
11. Ex.P11 10.01.2009 Original Promissory Note executed by Mr.V.K.Kamesh
12. Ex.P12 10.01.2009 Original Promissory Note executed by Mr.V.K.Kamesh
13. Ex.P13 10.03.2009 Certified copy of the letter of undertaking executed by Mr.V.K.Kamesh
14. Ex.P14 - Photocopy of the letter of undertaking executed by Mr.V.K.Kamesh
15. Ex.P15 08.05.2009 Original Promissory Note executed by Mr.V.K.Kamesh
16. Ex.P16 16.06.2009 Photo copy of letter of undertaking executed by the first defendant and Mr.V.K.Kamesh
17. Ex.P17 16.06.2009 Photo copy of letter of understanding executed by the first defendant and Mr.V.K.Kamesh
18. Ex.P18 18.09.2009 Original requisition letter executed by Mr.V.K.Kamesh
19. Ex.P19 19.09.2009 Original Promissory Note executed by the first defendant
20. Ex.P20 19.09.2009 Photo copy of the letter of understanding executed by the first defendant
21. Ex.P21 08.10.2009 Photo copy of the acknowledgment of receipt of Cheque executed by the first defendant
22. Ex.P22 08.10.2009 Photo copy of the letter of undertaking executed by the _____________ https://www.mhc.tn.gov.in/judis Page No.27 of 30 C.S.(Comm. Div.)No.306 of 2020 Sl.No. Exhibits Date Particulars of Documents first defendant
23. Ex.P23 08.10.2009 Photo copy of the letter of undertaking executed by the first defendant and Mr.V.K.Kamesh
24. Ex.P24 08.10.2009 Original Promissory Note executed by the first defendant and Mr.V.K.Kamesh
25. Ex.P25 06.11.2009 Photo copy of undertaking executed by Mr.V.K.Kamesh.
26. Ex.P26 08.11.2009 Photo copy of the undertaking executed by the first defendant and Mr.V.K.Kamesh
27. Ex.P27 07.12.2009 Photo copy of the undertaking executed by Mr.V.K.Kamesh
28. Ex.P28 04.05.2010 Photo copy of the requisition letter executed by Mr.V.K.Kamesh
29. Ex.P29 18.08.2010 Photo copy of the acknowledgment of receipt of Cheque executed by Mr.V.K.Kamesh
30. Ex.P30 18.08.2010 Photo copy of the acknowledgment of debt executed by the first defendant and Mr.V.K.Kamesh
31. Ex.P31 10.08.2011 Promissory Note executed by Mr.V.K.Kamesh
32. Ex.P32 10.08.2011 Original Promissory Note executed by first defendant.
33. Ex.P33 29.12.2011 Original Promissory Note executed by Mr.V.K.Kamesh
34. Ex.P34 11.02.2012 Original Promissory Note executed by Mr.V.K.Kamesh
35. Ex.P35 03.03.2012 Original Promissory Note executed by Mr.V.K.Kamesh
36. Ex.P36 06.08.2012 Copy of the cancellation in Document No.1506 of 2012
37. Ex.P37 25.08.2012 Certified copy of the acknowledgment of debt executed by the first defendant and Mr.V.K.Kamesh
38. Ex.P38 11.11.2013 Photo copy of the plaint in O.S.No.595 of 2013, on the file of District Munsif Court, Ambattur
39. Ex.P39 06.01.2015 Photo copy of the Deposition of P.W.1 in O.S.No.595 of 2013, on the file of the District Munsif Court, Ambattur
40. Ex.P40 16.10.2020 Original statement of account
41. Ex.P41 16.10.2020 Photo copy of the Encumbrance Certificate Documents exhibited by the Defendants:
_____________ https://www.mhc.tn.gov.in/judis Page No.28 of 30 C.S.(Comm. Div.)No.306 of 2020 Sl.No. Exhibits Date Particulars of Documents
1. Ex.D1 19.06.2008 Certified copy of power of attorney in Document No. 2380 of 2008 on the file of SRO, Ambattur.
2. Ex.D2 04.10.0213 Office copy of the legal notice to the plaintiff issued on behalf of the first Defendant.
3. Ex.D3 20.09.2012 Copy of the complaint lodged by the second defendant before the Commissioner of Police, Egmore.
4. Ex.D4 11.11.2013 Certified copy of the plaint in O.S.No.595 of 2013, on the file DMC, Ambattur
5. Ex.D5 23.07.2015 Certified copy of the written statement in O.S.No.595 of 2013 on the file of DMC, Chennai
6. Ex.D6 08.10,2009 Copy of the statement of account of the plaintiff from 19.06.2008 to 08.10.2009 furnished .
7. Ex.P7 30.04.2010 Copy of the statement of account of the plaintiff on 30.04.2020 furnished by the plaintiff to the defendant.
SKRJ _____________ https://www.mhc.tn.gov.in/judis Page No.29 of 30 C.S.(Comm. Div.)No.306 of 2020 SENTHILKUMAR RAMAMOORTHY rrg Pre Delivery Judgment in C.S.(Comm. Div.)No.306 of 2020 01.09.2022 _____________ https://www.mhc.tn.gov.in/judis Page No.30 of 30