Bangalore District Court
K.R.Kamal vs M/S Car Automobiles Pvt. Ltd on 16 December, 2015
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 16th Day of December 2015
O.S.No. 5170/2010
Plaintiff : K.R.Kamal
S/o K.L.Ramesh
Aged about 40 years,
R/at No.60/38, 40th Cross,
Jayanagar 8th Block
Bengaluru - 82
[By Sri.T.K.Lakshmisha - Adv.]
-Vs-
Defendants : 1. M/s Car Automobiles Pvt. Ltd.
Having its office at No.3,
1st Cross, Journalist Colony,
J.C. Road, Bengaluru - 2.
Rep. by its Director
Mrs. Fatima Xavier @ Fatima Jose
2. Mrs. Fatima Xavier @ Fatima Jose
W/o late P.K.Xavier,
Aged about 40 years,
R/at Flat No.308, 'C' Block,
'Hara Homes', Bhuvaneshwari Nagar,
B.S.K. 3rd Stage,
Bengaluru - 85.
3. Mr. Sonic
S/o late P.K.Xavier,
Aged about 18 years,
R/at Flat No.308, 'C' Block,
2 O.S.No.5170/2010
'Hara Homes', Bhuvaneshwari Nagar,
B.S.K. 3rd Stage,
Bengaluru - 85.
4. Miss. Sonnet
D/o late P.K.Xavier,
Aged about 16 years,
R/at Flat No.308, 'C' Block,
'Hara Homes', Bhuvaneshwari Nagar,
B.S.K. 3rd Stage,
Bengaluru - 85.
Since minor rep. by her
Natural guardian and mother
Mrs. Fatima Xavier @ Fatima Jose
[By Sri. S.M.P. Adv.]
Date of institution of the suit 25.07.2010
Nature of the suit Money suit
Date of commencement of 29.10.2013
recording the evidence
Date on which the judgment 16.12.2015
was pronounced
Total duration Years Months Days
05 04 21
(Ravindra Hegde),
XVII Addl. City Civil & Sessions Judge.
**********
JUDGMENT
This suit is filed by the plaintiff against the defendants directing them to pay Rs.12,00,000/- [Rupees Twelve Lakhs 3 O.S.No.5170/2010 only] with interest at the rate of 12% p.a. from the date of suit till realization of the entire amount.
2. The brief facts of the plaintiff's case is that, the 1st defendant is a company registered under the provisions of the Indian Companies Act, 1956 having registered office at the address stated in the cause title and the 2nd defendant is the Director of the 1st defendant company and also the wife of late P.K.Xavier who was Director of the 1st defendant company. The 3rd and 4th defendants are the son and daughters of 2nd defendant and P.K.Xavier. P.K.Xavier the then Director of the 1st defendant company is friend of one Naveen, approached the plaintiff for interest free loan of Rs.15,00,000/- for the purpose of business of the 1st defendant by agreeing to repay the same in ten equal monthly installments. The plaintiff has paid this amount of Rs.15,00,000/- to the 1st defendant company subject to 1st defendant and P.K.Xavier executing documents and complying the conditions imposed by the plaintiff like giving on demand promissory note and consideration receipt by the 1st company, undertaking to repay the loan in ten installments and mortgaging of the shares and undertaking to honour the cheques and undertaking to clear the loan by P.K.Xavier in his 4 O.S.No.5170/2010 individual capacity and also as Director of the company and issuing of 10 post dated cheques and also the cheque of P.K.Xavier in individual capacity for Rs.15,00,000/-. On complying all these conditions and giving of the documents, the plaintiff has released the loan of Rs.15,00,000/- to the 1st defendant by cheque bearing No.029957 dated 25.2.2010 drawn on Karur Vysya Bank Ltd., and the 1st defendant has cleared the loan installments which fell due on 25.3.2010 by depositing a separate cheque of Karur Vyasya Bank account of the plaintiff and in respect of the second installment of Rs.1,40,000/-, he has paid cash before 24th May, 2010 and deposited a cheque for Rs.10,000/- to Karur Vysya Bank account of the plaintiff and has collected back two cheques of two installments. For the 3rd installment which fell due on 25.5.2010, the plaintiff informed P.K.Xavier that he will present the cheque on 25.5.2010 and then he informed that he will make necessary arrangement to clear the installment and requested not to present the cheque. Unfortunately, on 29.5.2010, P.K.Xavier died. As the family of P.K.Xavier were bereaved, the plaintiff kept quite for some time and later tried to contact the 2nd defendant for clearance of the installment due on 25.5.2010 and on 25.6.2010 and the 5 O.S.No.5170/2010 plaintiff found that the shop of the 1st defendant company remained closed from 29.5.2010. The 1st defendant company is due to the plaintiff to the tune of Rs.12,00,000/- as on 24.5.2010. The defendants 2 to 4 are liable to pay the loan amount due to the plaintiff being legal heirs of P.K.Xavier who had undertaken to clear the loan even personally. In spite of sincere efforts, the plaintiff could not contact the defendants and demand the loan. Then the plaintiff got issued legal notice to the defendants. The plaintiff came to know that the defendants 2 to 4 are trying o sell the properties of P.K.Xavier to avoid the plaintiff bringing any attachment orders from the court. The defendants are liable to pay Rs.12,00,000/- to the plaintiff with interest at the rate of 12% p.a. For recovery of this amount, this suit is filed.
3. The defendant No.3 has filed the written statement and the same is adopted by the other defendants. In the written statement, the defendant No.3 has stated that the suit is false, frivolous, vexatious and not maintainable and is filed only to harass the defendants. The various allegations regarding the loan obtained by P.K.Xavier on behalf of the 1st defendant company and issuance of several documents, cheques etc., have 6 O.S.No.5170/2010 been denied by defendant No.3. Issuing of demand promissory note and consideration receipt are also denied. It is stated that the plaintiff appears to have played fraud on the 1st defendant and husband of the 2nd defendant and by taking advantage of demise of P.K.Xavier by fabricating, creating and cooking up documents, has filed the false suit. It is denied that P.K.Xavier had cleared some installments of the loan. The payment of the installments and liability of the 1st defendant or the other defendants to pay the amount to the plaintiff are all denied by the defendant No.3. It is denied that the 1st defendant company is liable to pay Rs.12,00,000/- as on 24.5.2010 to the plaintiff. It is stated that the claim of the plaintiff cannot be believed. It is stated that when the husband of the 2nd defendant was not at all doing any business from last few years, the question of obtaining the loan from the plaintiff for the business does not arise and consequently, the alleged loan lent by the plaintiff that too without interest is itself a false statement and cannot be believed at any stretch of imagination. It is stated that the defendants are not liable to pay any amount to the plaintiff. It is stated that the entire claim made is culminated with false and fraudulent intention and no amount was liable to be payable by 7 O.S.No.5170/2010 the husband of the 2nd defendant to the plaintiff. It is stated that even prior to his death, P.K.Xavier was unwell and was not doing any business and was not in a position to borrow money from the plaintiff. On all these grounds, the suit is prayed to be dismissed with costs.
4. On these pleadings, my learned predecessor has framed the following issues:-
1) Whether the plaintiff proves that, one P.K.Xavier who was the director of 1st defendant company has taken loan of Rs.15,00,000/- from him by executing the on demand promissory note and consideration receipt under taking to repay the said loan amount in 10 equated monthly installments, mortgaging the shares of the 1st defendant company to the tune of Rs.15,00,000/- and also mortgaging the shares worth of Rs.10,00,000/- which was going to be allotted in favour of the 2nd defendant?
2) Whether the defendants prove that, the plaintiff has played fraud on the1st defendant and husband of 2nd defendant and taking advantage of the demise of the husband of 2nd defendant has fabricated and created false documents?
3) Whether the plaintiff further proves that, the 1st defendant has cleared the loan which fell due on 25.3.2010 by depositing a separate cheque to the Karur Vysya Bank account of the plaintiff?8 O.S.No.5170/2010
4) Whether the plaintiff is entitled to recover an amount of Rs.12,00,000/- from the defendants as on 24.5.2010 with interest?
5) What decree or order?
5. In support of the plaintiff's case, PW.1 and 2 are examined. Ex.P1 to P34 are marked. For defendants, DW.1 is examined.
6. Heard the arguments.
7. My answer to the above issues are as under:-
Issue No.1: In the affirmative Issue No.2: In the negative Issue No.3: In the affirmative Issue No.4: In the affirmative as against defendant No.1 Issue No.5: As per final order, for the following:
REASONS
8. Issue No.1 to 4:- As all these issues are interlinked with each other, they are taken together for discussion to avoid repetition.
9. The case of the plaintiff is that, late P.K.Xavier, Director of the 1st defendant company, has taken interest free 9 O.S.No.5170/2010 loan of Rs.15,00,000/- from the plaintiff and has executed on demand promissory note, consideration receipt and mortgaged the shares and issued several cheques to the plaintiff. According to the plaintiff, the said P.K.Xavier had even undertaken to clear the loan individually and had given his individual cheques also. The said P.K.Xavier died on 29.5.2010. Now, the plaintiff contends that the 1st defendant company and defendants 2 to 4 who are the wife and children of deceased Director P.K.Xavier, are liable to pay the outstanding amount to the plaintiff. The plaintiff has stated that out of interest free loan of Rs.15,00,000/-, P.K.Xavier had cleared two installments of Rs.3,00,000/- in total and the balance amount of Rs.12,00,000/- is payable by the defendants. The defendants in the written statement, have totally denied the alleged transaction. Availing of the loan by P.K.Xavier and liability of the defendants to pay the amount have been denied by the defendants.
10. The plaintiff has given evidence as PW.1 and has stated the plaint averments. In the cross-examination, PW.1 has stated that he is doing property business along his father and has stated that during the year 2010, he was getting interest of 10 O.S.No.5170/2010 Rs.5.5 lakhs and was not having any other income. He has stated that he was spending Rs.1,50,000/- for the education of his first son and Rs.30,000/- for the second son. He has stated that he has paid loan to the 1st defendant out of his overdraft facility. He has stated that, he generally gets interest of 12 to 18% on the loan and in 2010, he has not collected any amount by way of interest. He has stated that, he has not charged any interest on the loan given to the 1st defendant. He has stated that the 1st defendant is a private limited company and husband of the 2nd defendant was Managing Director of the said company. He has stated that himself and P.K.Xavier have not done any business together and he was not having any friendship with him and he is also not his neighbour and P.K.Xavier was introduced to him by one Naveen and he has not gone into the financial status of the 1st defendant company before lending the amount. He had not enquired about the 1st defendant company and P.K.Xavier. He has stated that Naveen is his friend from I-PUC and he is doing real estate business. He has stated that P.K.Xavier requested Naveen to show him some person who is ready to lend loan to him and Naveen asked the plaintiff and then the plaintiff paid the loan. He has stated that 11 O.S.No.5170/2010 in the meeting held with P.K.Xavier, he had not enquired about his financial position. He has stated that he was not aware that P.K.Xavier was suffering loss of Rs.7 to 8 Crores and there was sales tax due of Rs.1.5 Crores. He has stated that P.K.Xavier told him that he is obtaining new agency and for that purpose, the amount is required. He has stated that, he do not know whether the defendants 3 and 4 have also participated in the company affairs when the P.K.Xavier was alive. He has admitted that in 2010, the defendant No.4 was minor. He has denied that defendants 2 to 4 are nowhere concerned to the company affairs of P.K.Xavier. He has stated that P.K.Xavier had given an undertaking by holding them liable. He has admitted that the defendants 2 to 4 have not personally executed any documents. He has stated that the writings in the cheques are made by his accountant. He has stated that for the loan of Rs.15,00,000/-, he has taken cheque for Rs.30,00,000/- as security. He has admitted that loan cheque was cleared on he same day and he cannot say who has withdrawn the said amount. He has denied that P.K.Xavier was personally liable to the loan taken by him and defendants are not liable.
12 O.S.No.5170/2010
11. The friend of the plaintiff who is stated to have asked the plaintiff to advance the loan to the 1st defendant by name Naveen is examined as PW.2. He has stated that the plaintiff is his friend. He came to know about P.K.Xavier who was Managing Director of the 1st defendant through his tenant A.V.Johnson. He has stated about the loan transaction of the plaintiff with the 1st defendant and outstanding liability. In the cross-examination, he has stated that he was not knowing the 1st defendant previously and P.K.Xavier had called him for the present transaction and Johnson had introduced him to P.K.Xavier and talks were held in Hotel Shantisagar in Jayanagar and at that time himself and P.K.Xavier were only present. He has stated that he has not tried to ascertain the financial position of P.K.Xavier and about the loss incurred by him in the business. He has stated that the demand promissory note is written by accountant of the 1st defendant.
12. The plaintiff has produced the promissory note and consideration receipt given by the 1st defendant alleged to have been signed by P.K.Xavier on 25.2.2010 as Ex.P1 and P2. Letter given by the 1st defendant signed by P.K.Xavier as Director about undertaking with regard to loan amount of 13 O.S.No.5170/2010 Rs.15,00,000/- is produced as Ex.P3 in which conditions of the loan and issuance of the cheques etc., have been mentioned. Several cheques given by the 1st defendant are produced as Ex.P4 and P6 to P13. Ex.P5 is the cheque personally given by P.K.Xavier. Ex.P4 and P5 are not dated and other cheques for Rs.1,50,000/- each and are stated to be towards the installments. Share certificates of Car Automobile Pvt. Ltd., held by P.K.Xavier and his wife and other persons which are said to have been mortgaged by P.K.Xavier for obtaining the loan are produced as Ex.P14 to 23. Letter of the Karur Vysya Bank stating that the cheque for Rs.15,00,000/- given by the plaintiff to the Car Automobiles Pvt. Ltd., i.e., 1st defendant has been cleared, is produced as Ex.P24. Copy of the notice, postal receipts and UCP receipts are produced as Ex.P24 to 27. The sale deed dated 26.3.2008 in favour of P.K.Xavier and the 2nd defendant is produced as Ex.P28. Encumbrance certificate is produced as Ex.P29 and another bank letter regarding encashment of two cheques by Car Automobiles Pvt. Ltd., is produced as Ex.P34. The unserved postal covers containing the notices given to the defendants are produced as Ex.P30 to P33. 14 O.S.No.5170/2010
13. The defendant No.3 who is the son of late P.K. Xavier has given evidence as DW.1 and has stated that the plaintiff has filed a false suit and that he is not liable to pay any amount to the plaintiff and suit is false, frivolous and vexatious etc. In the cross-examination, he has stated that he is not Director or shareholder of the 1st defendant company and he is not aware of the transaction taken place between the 1st defendant company and his father as shareholder and has stated that that he is giving evidence in individual capacity. He has denied that his mother is also a Director in the company. He has stated that all the documents produced by the plaintiff are manipulated and his father has not executed any such documents. He has stated that his father was suffering from chest pain. The witness has stated that after his father's death, the company was closed.
14. On looking to the pleadings, evidence and the documents produced in this case, the case of the plaintiff is that the 1st defendant company represented by its then Director P.K. Xavier had availed interest free loan of Rs.15,00,000/- from the plaintiff. P.K. Xavier the then Director of the 1st defendant company has executed several cheques of the company and also from his personal account and also executed demand 15 O.S.No.5170/2010 promissory note and also handed over share certificates as security to the loan. According to the plaintiff, this amount was agreed to be refunded in 10 installments of Rs.1,50,000/- each and towards this, two installments have been cleared by P.K. Xavier and thereafter he died. Now, the plaintiff claims that the defendant No.1 company and the 2nd defendant who is wife of P.K. Xavier and defendants 3 and 4 who are children of P.K. Xavier are liable to pay the suit claim amount to the plaintiff.
15. The death of P.K. Xavier is not in dispute. The defendants in the written statement have not taken any specific defence, but they have denied the case of the plaintiff. The plaintiff has produced several documents showing the loan transaction of the 1st defendant Car Automobiles Pvt. Ltd., with the plaintiff. PW.1 has stated that he was not knowing the deceased P.K. Xavier, but PW.2 has introduced him and both these witnesses have stated about this transaction in their evidence. Admittedly, P.K. Xavier has died. The 2nd defendant is stated to be the Director of the company, but there are no materials produced to show that the 2nd defendant is acting as Director of the 1st defendant company at present. It is suggested to DW.1 that, he is not Director or shareholder of the 1st 16 O.S.No.5170/2010 defendant company. The 3rd and 4th defendants who are the children of P.K. Xavier, are not the Directors of the 1st defendant company.
16. The pleadings show that the loan was obtained by the 1st defendant Car Automobiles Pvt. Ltd., through its Director P.K. Xavier. The promissory note and consideration receipt given for this loan is produced as Ex.P1 and P2 and are signed by the Director of Car Automobiles Pvt. Ltd., and it is the Car Automobiles Pvt. Ltd., which appears to have taken this interest free loan. In the evidence of the plaintiff, it has been stated that for taking new agency, the loan was taken by the 1st defendant. Ex.P3 is the letter issued by Car Automobiles Pvt. Ltd., signed by the Director P.K. Xavier to the present plaintiff, in which the loan transaction has been referred and giving of 10 cheques of different dates for payment of the installments amount and the depositing of the share certificates has been referred. This Ex.P3 is also given by Car Automobiles Pvt. Ltd., and signed by the Director P.K. Xavier. This letter show that there is undertaking that another Rs.10,00,000/- worth of share certificates which will be allotted to P.K. Xavier and his wife i.e., 2nd defendant would be mortgaged in favour of the plaintiff. The cheques 17 O.S.No.5170/2010 produced at Ex.P4 and P6 to P11 are also of the Car Automobiles Pvt. Ltd. The bank letter at Ex.P24 show that the plaintiff had given Rs.15,00,000/- cheque to Car Automobiles Pvt. Ltd., through cheque bearing No. 029957 dated 25.2.2010 and that amount has been credited to the account of Car Automobiles Pvt. Ltd. Other documents also show that this loan is obtained by the 1st defendant and documents are signed by the Director P.K. Xavier who is husband of the 2nd defendant and father of defendants 3 and 4. Further, the document at Ex.P34 also show that the said 1st defendant has paid Rs.10,000/- to the account of the plaintiff on 20.5.2010 and another Rs.1,50,000/- on 26.3.2010. Therefore, even the Car Automobiles Pvt. Ltd., has cleared portion of the alleged loan. All these documents produced by the plaintiff including the promissory note and the letter of the bank would show that it is Car Automobiles Pvt. Ltd., which had taken the interest free loan of Rs.15,00,000/- from the plaintiff.
17. Though the defendants in the written statement and also in the evidence of DW.1, denied the alleged transaction, there are no such proof produced before the court. 1st defendant company has not denied the transaction. It is also stated that 18 O.S.No.5170/2010 P.K. Xavier was not authorized to obtain the loan and authorization given to P.K. Xavier is not produced by the plaintiff. When it is admitted that P.K. Xavier was Director of the Car Automobiles Pvt. Ltd., whether he was authorized to receive the amount and whether the amount received on behalf of Car Automobiles Pvt. Ltd., has been utilized for the purpose of the business of the said company, is to be explained by the defendant No.1 company. As it is the indoor management of the company and the plaintiff who is an outsider, is not expected to know whether the Director who has obtained the loan, has utilized the sad loan for the business or whether he has utilized for his personal expenses. As the loan is obtained by Car Automobiles Pvt. Ltd., and Director has signed Ex.P1 and P2 promissory note and consideration receipt and the cheques of the Car Automobiles Pvt. Ltd., signed by P.K. Xavier, have been given to the plaintiff as security and even the amount is received by the account of the Car Automobiles Pvt. Ltd., to the tune of Rs.15,00,000/- by the cheque given by the plaintiff and some of the amount have been credited to the account of the plaintiff from the account of the Car Automobiles Pvt. Ltd., it is clear that the loan transaction was there between the plaintiff and 19 O.S.No.5170/2010 the Car Automobiles Pvt. Ltd. Hence, it is established that the deceased P.K. Xavier as a Director of the 1st defendant company had transacted with the plaintiff and had obtained the said loan for the business of the company.
18. Now, the plaintiff's claim is not only against the 1st defendant company, but also against the defendants 2 to 4 who are the wife and children of the deceased P.K. Xavier. As stated above, the loan was obtained by the 1st defendant company. It is stated in the plaint itself that, it is the company registered under the provisions of Companies Act. As it is a private limited company, the liability of the Directors and the shareholders is limited to the extent of their investment which has been already made. They would not be personally liable for the affairs of the company so long as they are not declared as willful defaulters. The defendants 2 to 4 who are wife and children of deceased P.K. Xavier, who was one of the Directors of the 1st defendant company cannot be held personally liable to clear the loan of the company as liability is of the directors and the shareholders is limited in the case of limited company. It is even suggested to DW.1 that he is not having any personal knowledge of the transaction.
20 O.S.No.5170/2010
19. It is not the case of the plaintiff that P.K. Xavier has utilized this amount for his personal benefit. When the loan was obtained by P.K. Xavier as Director of the company for the business of the company and it is a private limited company, the liability cannot be extended to the family members after the death of Director. Though it is stated that P.K. Xavier has also given cheque for Rs.15,00,000/- as security and he had given the share certificates as security etc., that does not make the LRs. of the deceased Director liable for the loans obtained by the company.
20. The learned counsel for the plaintiff has drawn my attention to the decision of the Hon'ble Supreme Court reported in AIR 1955 S.C. 799 - Chattanatha Karayalar Vs. Ramachandra Iyer and another, which is with regard to business of the plaintiff in the name of the member of the joint family in Hindu Law. In which the Hon'ble Supreme Court has stated that:
"... there is one thing to say that the sons are liable for the debts contracted by the father in the trade newly started by him and quite another thing to treat the trade itself as a joint family concern."21 O.S.No.5170/2010
In another decision reported in AIR 1976 Madhya Pradesh 187
- Parmanand Jain Vs. Firm Babulal Rajendra Kumar Jain and another, it is held that:
"... It is now settled law that debts incurred by the father in the course of a business started by him are not ayyavaharika debts and the sons are under a pious obligation to discharge such debts."
21. The counsel for the defendants has also drawn my attention to the decision reported in AIR 1974 Supreme Court 1930 - P.R.Subramanian Vs. Lakshmi Ammal [dead] by her LRs., in which the Hon'ble Supreme Court has held that:
"Plaintiff cannot have a personal decree against those who were not parties to the suit promissory note."
22. On looking to these decisions, the decisions are not applicable to the present case. They are delivered under the previsions of Hindu Law and they are referring to the joint family business. In the present case, the Director P.K. Xavier and the defendants 2 to 4 are not governed by Hindu Law and moreover, the loan is obtained by the private limited company which is a juristic person as per law. When the loan is taken by the company, it is the company which is liable and the liability of the Directors is limited. The promissory note and 22 O.S.No.5170/2010 consideration receipt is also given by the company as per Ex.P1 and P2, for that the defendants 2 to 4 who are legal heirs of the deceased Director of the company, cannot be held liable.
23. The learned counsel for the plaintiff has also drawn my attention to the decision reported in (2002) 1 S.C.C. 234 - M.M.T.C. Ltd., and another Vs. Medchl Chemicals and Pharma (P) Ltd., and another, which is under the provisions of N.I. Act and regarding the complaint by the company in the name and on behalf of the company without necessary authorization. This decision is also not applicable to the present facts. The decision cited by the learned counsel for the defendants reported in ILR 2014 KAR 2168 - CREF Finance Ltd., Kolkata Vs. Sree Shanthi Homes Pvt. Ltd., Bengaluru and another, is with regard to the offence under section 138 of N.I.Act and the authority to file the complaint and it is held that:
"the complaint instituted by the appellant in the trial court is not maintainable for the sole reason that 'X' who has signed the complaint has no authority in law to represent the Company as there is no resolution by the company authorizing 'X' to file the complaint."23 O.S.No.5170/2010
24. This decision is also not applicable to the present case. In the present case, the Car Automobiles Pvt. Ltd., has not filed any case and it is the outsider i.e., the plaintiff who has filed the suit against the company alleging that the company availed interest free loan of Rs.15,00,000/-. When it is admitted that signatures to various documents produced by the plaintiff was Director of the said company, it is the burden of the company to prove that he was not authorized to avail the loan or that the loan obtained is not utilized for the company's benefit etc., as it is the indoor management of the company and not expected to be known by the outsider. Therefore, in the present case, obtaining of loan of Rs.15,00,000/- by the 1st defendant company by its Director P.K.Xavier, is sufficiently established. Out of the said loan of Rs.15,00,000/-, Rs.3,00,000/- has been paid and there is a balance of Rs.12,00,000/- to be paid by the 1st defendant. As the 1st defendant is a company registered under the Companies Act and it is a private limited company, the liability of the Directors and the Share holders is limited and it will not extend to the family members and the legal heirs of the Directors. 24 O.S.No.5170/2010
25. Though the 2nd defendant is also show as Director of the company, her liability is limited, as Director of the company and she is not liable to pay the amount as legal heir of the deceased P.K.Xavier. As the 1st defendant is a private limited company, it is having separate personality and the liability is that of the company to pay the amount to the plaintiff. Therefore, the defendants 2 to 4 in their capacity as legal heirs of the deceased P.K.Xavier are not liable to pay any amount to the plaintiff. But the plaintiff is entitled to recover Rs.12,00,000/- from the 1st defendant company as per law. The plaintiff has prayed interest at the rate of 12% p.a. form the date of suit till realization of the entire amount. The amount was paid to the 1st defendant by way of cheque and it is interest free loan. As the amount is not repaid as agreed, the plaintiff would be entitled for interest on the amount of Rs.12,00,000/- from the 1st defendant from the date of suit till realization of the entire amount. Accordingly, these issues are answered.
26. Issue No.5:- For the discussion made on the above issues, the suit of the plaintiff is to be decreed against the 1st defendant and the suit against the defendants 2 to 4 is to be dismissed. Accordingly, following order is passed :- 25 O.S.No.5170/2010
ORDER Suit of the plaintiff is decreed as against the defendant No.1 with costs.
The 1st defendant is liable and is directed to pay Rs.12,00,000/- [Rupees Twelve Lakhs only] to the plaintiff with interest at the rate of 12% p.a. from the date of suit till realization of the entire amount.
The suit against the defendants 2 to 4 is
dismissed.
Draw decree accordingly.
(Dictated to the judgment writer, transcribed by him, corrected and then pronounced by me in the open court, on this the 16th day of December, 2015).
(Ravindra Hegde), XVII Addl. City Civil & Sessions Judge, Bengaluru.
ANNEXURE List of witnesses examined for plaintiff:
P.W.1 K.R. Kamal PW.2 M.Naveen
List of documents exhibited for plaintiff:
Ex.P1 On demand promissory note
Ex.P2 Consideration receipt
26 O.S.No.5170/2010
Ex.P3 Undertaking letter
Ex.P4 to 13 10 Cheques
Ex.P14 to 23 Share certificates
Ex.P24 Letter
Ex.P25 Copy of legal notice
Ex.P26 Postal receipt
Ex.P27 UCP receipt
Ex.P28 Certified copy of sale deed
Ex.P29 Encumbrance certificate
Ex.P30 to 33 Unserved Postal covers
List of witnesses examined for defendants:
DW.1 Sonic List of documents exhibited for defendants:
Nil XVII Addl. City Civil & Sessions Judge, Bengaluru.27 O.S.No.5170/2010
(Order pronounced in open court vide separate judgment) ORDER Suit of the plaintiff is decreed as against the defendant No.1 with costs.
The 1st defendant is liable and is directed to pay Rs.12,00,000/- [Rupees Twelve Lakhs only] to the plaintiff with interest at the rate of 12% p.a. from the date of suit till realization of the entire amount.
The suit against the defendants 2 to 4 is dismissed.
Draw decree accordingly.
XVII Addl. City Civil & Sessions Judge, Bengaluru.