Madras High Court
The Regional Manager vs M.P.Balasundaram (Deceased) on 26 July, 2012
Author: V.Periya Karuppiah
Bench: V.Periya Karuppiah
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.07.2012 CORAM THE HONOURABLE MR.JUSTICE V.PERIYA KARUPPIAH S.A.No.1714 of 2004 1. The Regional Manager, Indian Overseas Bank, Anna Salai, Madras-2. 2. Indian Overseas Bank represented by its Manager, Periyar Nagar Branch, Madras 600 082. ... Appellants vs. 1.M.P.Balasundaram (Deceased) 2.M.P.Sakunthalamma 3.M.P.Duraibabu 4.M.P.Sridhar 5.G.Gopalakrishnan 6.M/s.South India Poly Coat & Printers represented by its Partner, having office at No.78, Flag Street, Royapuram, Chennai-600 013. 7.M.P.Thirumal 8.M.B.Raja 9.Mohana 10.R.Usha 11.M.B.Ravi ... Respondents (RR8 to RR11 brought on record as legal representatives of the deceased 1st respondent vide order of Court dated 09.07.2010 made in C.M.P.No.389 of 2010). Appeal filed under Section 100 of C.P.C. against the judgment and decree dated 14.08.2003 passed in A.S.No.63 of 2002 on the file of the I Additional Judge, City Civil Court at Chennai confirming the Judgment and Decree in O.S.No.456 of 1996 dated 29.06.2001 on the file of the II Assistant Judge, City Civil Court at Chennai. For Appellants : Mr.S.Karthikeyan For Respondents : Mr.P.B.Balaji J U D G M E N T
This appeal is directed against the judgment and decree passed by the 1st appellate court in A.S.No.63 of 2002 dated 14.08.2003 in confirming the judgment and decree passed by the trial court made in O.S.No.456 of 1996 dated 29.06.1996 in decreeing the suit without costs.
2. The appellants were the defendants 1 and 2 and the respondents 1 to 4 were the plaintiffs and respondents 5 to 7 were the defendants 3 to 5 before the trial court. The respondents 8 to 11 are impleaded as legal representatives of the 1st respondent in this appeal.
3. For convenience the rank of parties before the trial court are maintained infra.
4. The case of the plaintiffs as stated in the plaint would be as follows:-
On 27.3.1943, by a registered sale deed, Ramagiri Muni Ammal purchased the suit property. On 28.10.1948, by a settlement deed, she gave life estate to her daughter Jayalakshmi Ammal the vested remainder to her three sons, namely, Purushothaman, Balasundararaman and Ethirajulu. Plaintiff's are Jayalakshmi Ammal's heirs. She died on 09.09.1995.Purushothaman died on 29.12.1982. Ehirajulu died on 20.05.1987 at Saudi Arabia. In the suit property, plaintiffs have 1, 3rd share. On 12.03.1995, they received notice from the defendants 1 and 2, I.O.B, that as a collateral security for the debt of 4th defendant, Jayalakshmi Ammal's three sons have created equitable mortgage over the suit property depositing the original title deeds on 11.10.1994. Purushothaman and Ethirajulu have passed away long back. No such mortgage could have been created by them. Once they have handed over the original title deed, to Komala Ammal, W/o. Ethirajulu to get auto loan. Thereafter, they did not hear anything. So, by fraud, the equitable mortgage seems to have been created. It will not bind the plaintiffs. So, the Bank is not entitled to retain the original title deeds, it cannot bring the property for sale and must return the title-deeds. Hence, the second appeal may be allowed and consequently to dismiss the suit filed by the plaintiffs.
5. The case of the defendants 1 and 2 was stated in her written statement are as follows:-
The 4th defendant availed of finance from the Bank. One Shanmugam is one of its partners. During 1994, he and his son Ramesh, the three sons of Jayalakshmi Ammal came to the Bank. By their letter dated 11.10.1994, Jayalakshmi Ammal's sons created equitable mortgage over the surety property as a colleteral security for the loan of 4th defendant. So, the Bank is entitled to retain the documents. Komala Ammal is a necessary party to the suit. But she has not been impleaded. The suit is bad for her non-joinder. It is a collusive suit as between plaintiffs and other heirs to prevent the Bank from enforcing the collateral security. Therefore, the second appeal may be dismissed.
6. The defendants 3 to 5 remained exparte before the trial court.
7. The trial court had framed necessary issues on the aforesaid pleadings and entered trial. After appraising the evidence adduced before it, the suit filed by the plaintiff was decreed in favour of the plaintiff without costs. The defendants 1 and 2 having aggrieved with the judgment and decree passed by the trial court preferred an appeal before the 1st appellate court in A.S.No.63 of 2002 challenging the said judgment and decree passed by the trial court. The 1st appellate court, after hearing the arguments of both sides, had come to the conclusion of confirming the judgment and decree passed by the trial court and thus, the 1st appeal was dismissed without cost.
8. Having aggrieved by the concurrent judgment and decree passed by the 1st appellate court, the defendants 1 and 2 have preferred the present second appeal before this Court.
9. On admission of the second appeal this Court had formulated the following substantial questions of law for consideration in this appeal.
"1. Whether the courts below are right in decreeing the suit without considering the correct position of the custody of the original title deeds with the appellants which amounts to creation of Equitable Mortgage by deposit of title deeds, when particularly the plaintiff themselves admitted the parting of the documents by one of the sharers ?
2. Whether the courts below are right without dismissing the suit for non joinder of necessary party i.e. Mrs.Komala who was said to be in possession of the title deeds ?
3. Whether the courts below are right in decreeing the suit when the plaintiffs have failed to discharge the burden of proving the case, how the original documents are left in the custody of the bank ?"
10. Heard Mr.S.Karthikeyan, learned counsel for the appellants/defendants 1and 2 and Mr.P.B.Balaji, learned counsel for the respondents 1 to 4 and respondents 8 to 11/plaintiffs.
11. The learned counsel for the appellant/defendants 1 and 2 would submit in his argument that the Courts below have wrongly placed reliance over the self serving documents of the plaintiff namely the death certificate of Purushothaman and had come to a conclusion solely upon the said fact that the equitable mortgage created by the deposit of title deeds produced by the 1st respondent/plaintiff along with other two persons was fraudulent. He would also submit that the court below did not answer as to how the original documents were placed in the custody of the bank without the consent of the owners of the property. He would also submit that the plaintiff admitted that the title deeds have been in possession of Komala Ammal W/o.late Ethirajulu and she being one of the sharers of the property should have given along with the 1st respondent/1st plaintiff for creating the equitable mortgage and played fraud upon the Court. He would further submit that the plea raised by the defendants 1 and 2 that the non-impleadment of Komala Ammal W/o.late Ethirajulu is fatal to a case, has not been properly considered by the courts below. He would also submit that the plaintiff did not prove the death of Ethirajulu, who died in Saudi Arabia and the 1st appellate court has not considered the absence of proof of death of Ethirajulu but had erroneously taken the death extract produced for Purushothaman is sufficient to vitiate the case of the defendant. He would further submit that the original documents were of validly given in the custody of the defendants 1 and 2 for creating equitable mortgage, only with the connivance of Komala Ammal and the1st plaintiff and the said custody cannot be considered as unlawful merely because the 1st son of Jayalakshmi Ammal namely Purushothaman was said to have died in the year 1982. He would also submit that the defendants 1 and 2 would have bonafide believed the deposit of title deeds by the three sons of Jayalakshmi Ammal in the year 1994 for creating equitable mortgage in support of the loan obtained by the 4th defendant firm and the creation of equitable mortgage cannot be held as fraudulent and the title deeds cannot be ordered to be returned to the plaintiffs which would defeat the lawful claim of the defendants 1 and 2 against its debtors including the 4th defendant. He would also submit that the right created under equitable mortgage by the deposit of title deeds in the year 1994 is a valid one and the defendants 1 and 2 are the innocent creditors and they should not be deprived of their right to initiate the claim against the security. He would therefore submit that the judgment and decree passed by the court below even though concurrent are against the principles of law and equity and they may be interfered and set aside and thus the second appeal may be allowed and consequently to dismiss the suit filed by the plaintiff.
12. The learned counsel for the respondents 1 to 4 and 8 to 11 /plaintiffs would submit in his argument that the plaintiffs have established their case that the possession of original documents belonging to the plaintiffs were in wrongful custody of the defendants 1 and 2 by showing that the deposit of title deeds in the year 1994 itself is a fraudulent one. He would also submit that the documentary evidence produced in Ex.A2 would go to show that one of the sons of Jayalakshmi Ammal namely Purushothaman died on 29.12.1982 and the said death extract was issued by competent authority and it would be a conclusive proof of death of such person and the alleged deposit of title deeds and the execution of collateral letter by the said Purushothaman in the year 1994 ought to have been impersonated with the help of the henchman of the 4th defendant to deposit them fraudulently to the detriment of the plaintiff. He would further submit that the death of Ethirajulu in the year 1987 at Saudi Arabia was also not disputed and therefore, the said Purushotaman and Ethirajulu who were dead already could not have executed a letter of collateral security in favour of the Bank namely, 1st defendant in the year 1994. He would further submit that all the original documents were in the custody of Komala Ammal W/o. Late Ethirajulu and it should have been stolen from her custody and be submitted to the Bank with fake persons. He would also submit that the 1st plaintiff did not appear before the 1st defendant bank to execute any collateral letter for the deposit of title deeds for after the death of 4th defendant. He would further submit that the defendants 1 and 2 Bank ought to have verified the existence of those persons with other documents like ration card and latest voter identity card or any other documents to identify the persons and thereafter only it should have permitted those persons to execute a letter of collateral security. He would further argue that the bank namely defendants 1 and 2 did not follow the said procedures and therefore, there is no bonafide on the part of the defendants 1 and 2 in accepting the original documents belonging to the plaintiffs, when produced by some other persons. He would also submit that the trial court had fairly considered the evidence adduced before it and had perfectly appreciated the same and thus the suit was decreed in favour of the plaintiffs and the 1st appellate court had also framed necessary points and it appraised the evidence properly and had come to a concurrent judgment and decree of trial court and therefore, such concurrent findings need not be interfered and set aside. He would also submit that there is no perversity or biased attitude in the mind of the 1st appellate court to confirm the judgment and decree passed by the trial court. Therefore, he would request that the judgment and decree passed by the 1st appellate court need not be interfered or set aside. He would further submit that the judgment of the 1st appellate court was not against the principles of law and therefore, it has to be confirmed and the second appeal may be dismissed.
13. I have given anxious thoughts to the arguments advanced on either side.
14. The suit was filed by the plaintiffs for the following reliefs:-
"i) declaring that the defendants have no right to retain the original documents of title in respect of the property bearing No.31, Arani Muthu Mudali Street, Choolai, Madras-112, more fully described in the schedule hereunder;
ii) for a mandatory injunction directing the defendants 1 and 2 to return the original documents of title in respect of the property bearing No.31, Arani Muthu Mudali Street, Choolai, Madras-112, more fully described in the schedule hereunder;
iii) consequential relief of permanent injunction restraining the defendants 1 to 4 from bringing the property viz. No.31, Arani Muthu Mudali Street, Choolai, Madras-112, more fully described in the schedule hereunder;
iv) directing the defendants 1 to 4 to bear the costs of the suit;"
15. According to the plaintiffs case, the suit property was originally belonged to one Ramagiri Muniammal, who purchased the same on 27.03.1943 through a registered sale deed and she had executed a registered settlement deed in favour of his daughter Jayalakshmi Ammal on 28.10.1948 and thereby settled life estate in favour of Jayalakshmi Ammal and after her life time, the title to the said property would vest with the three sons of Jayalakshmi Ammal namely Purushothaman, Balasundara Raman and Ethirajulu. After the death of Jayalakshmi Ammal on 9.9.1995, the absolute interest in the suit property would vest upon the son Balasundara Raman and the heirs of Purushothamanand Ethirajulu who died already. The further case of the plaintiff would be that the said Purushothaman died on 29.12.1982 and Ethirajulu died on 20.05.1987 in Saudi Arabia. The plaintiffs further case would be that the 4th defendant borrowed monies from the defendants 1 and 2 and to which the sons of Jayalakshmi Ammal namely the 1st plaintiff Purushothaman and Ethirajulu have deposited the title deeds and created collateral security in favour of the Bank are not correct. The said fact of creating equitable mortgage was known to the plaintiffs when they received a notice from the Bank on 12.03.1995 demanding a sum of Rs.8,00,000/- on an equitable mortgage said to have created by them. The plaintiffs replied through (Ex.A3) to the 2nd defendant bank on 29.06.1995 and they denied their liability to pay the said demanded money. Thereafter, the 2nd defendant again sent another notice (Ex.A5) on 17.11.1995 to the plaintiffs demanding money from them.
16. However, the said case of the plaintiff was denied by the defendants 1 and 2 and the 1st plaintiff and his brothers have approached the defendants 1 and 2and deposited the title deeds collateral to the debt obtained by the 4th defendant on 11.10.1994 and created equitable mortgage over the said properties. The further case of the defendants 1 and 2 would be that the fraudulent activities if any committed in the said transaction should have been committed by the said Komal Ammal with the help of others so as to cheat the defendants 1 and 2 and the original title deeds whould not have been available with any other person except any one of the sharers preferably the said Komala Ammal. It is also contented that the said Komala Ammal is necessary party to the proceedings and his business would invite the dismissal of the suit on the ground of non-joinder of necessary parties.
17. On the basis of the submissions of both parties, the courts below have categorically come to a conclusion that Purushothaman, one of the sons of Jayalakshmi Ammal, died in the year 1982 and it was established through the production of death certificate Ex.A2 and another son Ethirajulu was also dead in the year 1987 and therefore, they would not have created in equitable mortgage by executing a letter in favour of the defendants 1 and 2 on 11.10.1994. Both the courts below have placed reliance on Ex.A2 death certificate of Purushothaman as conclusive proof. No doubt, the death extract produced from the competent authority is a conclusive proof of establishing a death of a person. Therefore, Ex.A2 is the final authority to prove the death of Purushothaman and therefore, there is no infirmity in the decision reached by the court below. Similarly, the death of Ehirajulu was said to have taken place in the year 1987. When once Purushothaman died in the year 1982 is established and the case of the defendants 1 and 2 that the said dead person had also come along with his two other brothers to execute the collateral security on 11.10.1994 could not be a true incident. Of course, the defendants 1 and 2 have pleaded innocence and they also did not verify as to the identity of the persons who deposited the title deeds for creating equitable mortgage. No doubt, when the original document is produced before such banks like defendants 1 and 2 they ought to have verified the identity of the persons who wanted to deposit title deeds as to their ownership and title to the said properties. Here a dead person along with another dead person and the 1st plaintiff were stated to have executed a document namely collateral letter on 11.10.1994. We have to see whether the innocence pleaded by the defendants 1 and 2 can be sustained. The plaintiffs case is that they are not connected with 4th defendant to go and support the loan obtained from the defendants 1 and 2. Even if any one of the sharers namely Komala Ammal or any other person had played fraud by producing the title deeds for creating equitable mortgage, the defendants 1 and 2 ought to have traced the title. Admittedly, the grand mother of the 1st plaintiff namely Ramagiri Muniammal was the original owner of the property and she had settled the property in favour of her daughter Jayalakshmi Ammal, who enjoyed the property till her life time and thereafter the absolute interest and title to the suit property should go to Purushothaman, Balasundara Raman and Ethirajulu sons of Jayalakshmi Ammal. The death of Purushothaman occurred in the year 1982 and it has proved by production of Ex.A2. The death extract of Jayalakshmi Ammal was produced in Ex.A6 which would show that she died on 09.09.1995. Only after her death on 09.09.1995, these three sons or their respective heirs would have obtained absolute interest in the said property. However, the collateral security allegedly executed by the three sons of Jayalakshmi Ammal was stated to have taken place on 11.10.1994, even during the life time of Jayalakshmi Ammal. If the defendants 1 and 2 were conscious about the deposit of title deeds for the death of 4th defendant by the three sons of Jayalakshmi Ammal, they ought to have asked for the death certificate of Jayalakshmi Ammal so as to ascertain the accrual of right over three sons to execute such a collateral letter towards security of the alleged loan. That was not done by the defendants 1 and 2. Therefore, I have no hesitation to find that there was no valid security created even though the original documents of title have been made available before the defendants 1 and 2 towards the alleged debt of 4th defendant. Therefore, I am of the considered and clear view that the title deeds of the plaintiffs were some how produced without the knowledge of the plaintiffs for creating equitable mortgage, but it was effected by playing fraud committed against the plaintiffs. Therefore, the said deposit of title deeds in the hands of defendants 1 and 2 will not bind the plaintiffs or another heir of Jayalakshmi Ammal, namely Komala Ammal, as rightly pointed out by the 1st appellate court and therefore, she was not a necessary party to the proceedings. In view of the discussion held above, I do not find that the equitable mortgage said to have been created with the defendants 1 and 2, was not lawful and there would not be any right accrued to the defendants 1 and 2 and the plaintiffs have proved through the production of death certificates of Purushothaman and Jayalakshmi Ammal and through the oral evidence adduced by them that the said original documents held by the defendants 1 and 2 were illegal. Therefore, I am of the considered view that the questions of law framed by this Court are necessarily to be decided against the appellants/defendants 1 and 2.
18. For the foregoing discussion held above, I am of the considered view that the courts below have perceived the evidence properly and have come to the correct conclusion to decree the suit filed by the plaintiff and there is no violation of principles by the 1st appellate court, in the judgment and therefore, the concurrent judgment and decree passed by the 1st appellate court by confirming the judgment and decree passed by the trial court are not liable to be interfered.
19. In fine, the second appeal preferred by the defendants 1 and 2 is dismissed by confirming the judgment and decree passed by the 1st appellate court in concurrent with the judgment and decree passed by the trial court. No order as to costs.
ssn To
1. The I Additional Judge, City Civil Court, Chennai.
2.The II Assistant Judge, City Civil Court, Chennai