Madras High Court
P.Lakshmanan vs Muniappan on 13 December, 2012
Author: P.R.Shivakumar
Bench: P.R.Shivakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.12.2012 CORAM THE HON'BLE MR.JUSTICE P.R.SHIVAKUMAR.J S.A.No.40 of 2008 P.Lakshmanan ... Appellant Vs. Muniappan ... Respondent Second appeal filed under Section 100 of the Civil Procedure Code to set aside the judgment and decree passed in A.S.No.16 of 2006 dated 05.07.2006 on the file of Principal District Judge, Salem confirming the judgment and decree passed in O.S.No.69 of 2003 dated 19.12.2005 on the file of Sub Court, Sankari and allow the second appeal. For Appellant : Mr.P.Valliappan For Respondent : Mr.N.Manoharan ------- JUDGMENT
The defendant in the original suit is the appellant in the second appeal. Muniappan, the respondent herein/plaintiff filed the suit O.S.No.69/2003 on the file of the Sub Court, Sankari for the recovery of a sum of Rs.1,45,000/- together with an interest thereon at the rate of 18% per annum from the date of plaint till date of realisation based on an unregistered usufructuary mortgage deed dated 19.06.1998. The suit was decreed by the trial court directing the appellant herein/defendant to pay the said amount claimed in the plaint to the plaintiff along with an interest at the rate of 9% per annum from the date of plaint till realisation as against the claim of interest @ 18% per annum. The appellant herein/defendant was also directed by the trial court to pay the cost of litigation to the respondent herein/plaintiff. Challenging the said decree dated 19.12.2005 passed by the trial court in O.S.No.69 of 2003, an appeal was filed by the appellant herein/defendant in A.S.No.16 of 2006 on the file of the court of the Principal District Judge, Salem. The learned Principal District Judge, Salem dismissed the appeal without cost by his judgment and decree dated 05.07.2006 confirming the decree passed by the trial court. The said judgment and decree of the lower appellate court are challenged in the present second appeal.
2. The suit was filed by the respondent herein/plaintiff on the basis of the plaint averments, which are in brief, as follows:
On 19.06.1998, the appellant herein/defendant borrowed a sum of Rs.1,45,000/- and executed an unregistered usufructuary mortgage deed. On the date of mortgage itself, possession of the property mortgaged was handed over to the respondent herein/plaintiff on the understanding that the said document would be registered within a month and the appellant herein/defendant would bear the expenses of additional stamp duty and registration charges. However, on 04.07.1998, the appellant herein/defendant trespassed into the property, possession of which had been handed over to the respondent herein/plaintiff as per the mortgage deed and thereafter the appellant/defendant refused to register the said document and did not allow the respondent herein/plaintiff from enjoying the properties, regarding which the said mortgage deed was executed. When the respondent/plaintiff requested for the return of Rs.1,45,000/- borrowed by the appellant/defendant, he was evading on one pretext or another. Even the attempt made through panchayatdars to make the appellant/defendant comply with the demand of the respondent/plaintiff proved futile and the appellant/defendant was not at all willing to return the amount borrowed by him even though he agreed to return the same after a period of five years along with interest. Hence the respondent/plaintiff was forced to issue a lawyer's notice on 07.06.2003 demanding repayment of the above said amount with interest. But the appellant/defendant, who received the said notice, failed to either comply with the demand made therein or to send a reply. On the other hand, he was making hectic efforts to alienate and encumber the properties. As such, the plaintiff was constrained to file the suit for the recovery of the above said sum of Rs.1,45,000/- from the appellant herein/defendant with an interest calculated at the rate of 18% per annum from the date of plaint till the date of realisation and also for cost.
3. The appellant herein/defendant resisted the suit by filing a written statement, which contains the following averments, besides general denial of the plaint averments.
The appellant/defendant did not borrow Rs.1,45,000/- for his family expenses and execute an unregistered usufructuary mortgage deed on 19.06.1998 as claimed by the plaintiff. The alleged usufructuary mortgage deed was not at all executed by the appellant/defendant. The left thumb impression and the signature found in the alleged document dated 19.06.1998 are not that of the appellant herein/defendant. The appellant is not the absolute owner of the entire property allegedly mortgaged to the plaintiff and he is also not in possession and enjoyment of the entire property. The plaint averment that possession of the property had been handed over to the plaintiff on 19.06.1998 and thereafter the appellant/defendant trespassed into the suit property on 04.07.1998 is false. The possession of the property, for which the appellant/defendant alone is entitled to, was in continuous and exclusive possession and enjoyment of the appellant herein/defendant. As such, there was no occasion or necessity for the appellant herein/defendant to trespass into his own property. The alleged demand made through the panchayatdars and the refusal on the part of the appellant/defendant are false. It is also not true that the appellant/defendant did not issue any reply to the notice sent by the respondent/plaintiff. A suitable reply was sent by the appellant/defendant. When there is no stipulation in the document relied on by the plaintiff regarding payment of interest, the interest claimed by the respondent/plaintiff at the rate of 18% per annum cannot be sustained. In the absence of any clause in the document, the respondent/plaintiff cannot claim interest at the rate of more than 6% per annum. The plaintiff had no means to lend such a huge amount to the appellant/defendant. In case the court comes to the conclusion that the signature and the left thumb impression found in the document dated 19.06.1998 are that of the appellant/defendant, the said document could have been brought into existence under the following circumstances. The respondent/plaintiff, who faced fund crunch in the year 1995, promoted a chit consisting of 12 subscribers including the appellant herein/defendant and the respondent herein/plaintiff. The total amount of the chit was Rs.60,000/- and the installment to be paid twice in a year was Rs.5,000/-. When the defendant became a successful bidder in Thai 1998, he was made to affix his signature and left thumb impression in two blank papers and two green sheets as security for the due payment of the remaining installments of the chit. The chit ended in 2000, but the respondent/plaintiff failed to return the said papers containing the signatures of the appellant/defendant and came with an excuse that they were misplaced. The same should have been misused for the creation of the document relied on by the respondent herein/plaintiff to make wrongful gain. The suit ought to have been filed within three years from 04.07.1998, the date of alleged dispossession and refusal to execute and register the document. Since the suit was not filed within three years from the said date, the suit is hopelessly barred by limitation. Hence the suit should be dismissed with cost and compensatory cost.
4. Based on the above said averments, the trial court framed the the following issues and additional issues.
Issues:
1) Whether the plaintiff is entitled to recover the amount claimed in the plaint? And
2) To what other relief the plaintiff is entitled?
Additional Issues:
1) Whether the usufructuary mortgage deed is true? Is it valid as per law?
2) Whether the defendant is the absolute owner of the property described in the usufructuary mortgage deed?
3) Whether the suit is barred by limitation?
4) Whether the unregistered usufructuary mortgage deed is affected by section 17 and 49 of the Registration Act?
5. After trial, the learned trial judge accepted the case of the respondent herein/plaintiff and decreed the suit directing the appellant herein/defendant to pay a sum of Rs.1,45,000/- along with an interest at the rate of 9% per annum on the said amount from the date of plaint till realisation and also the cost of litigation of the respondent herein/plaintiff. As against the said judgment and decree of the trial court, the appellant herein/defendant preferred an appeal in A.S.No.16/2006 on the file of the lower appellate judge, namely the Principal District Judge, Salem. The learned first appellate judge, after hearing, concurred with the findings of the trial court in all respects and thereby confirmed the decree of the trial court and dismissed the appeal without cost. Now the appellant herein/defendant has knocked at the doors of the High Court by way of the present second appeal on various grounds set out in the memorandum of second appeal.
6. The second appeal has been admitted on the following substantial questions of law:
" 1) Whether the suit is not barred by limitation?
2) Whether the courts below are right in accepting Ex.A1 which is an unregistered document and hence cannot be admitted in evidence, in violation of section 17 and 49 of the Registration Act?
3) Are the courts below correct in decreeing the suit on the basis of unregistered mortgage without necessary pleadings based on the cause of action on personal action and the covenant in the said deed?
4) Is the unregistered document Ex.A1 prepared on the stamp paper, purchased in the name of the party other than the parties to the document is admissible and reliable for any purpose?"
7. As per Section 100 of Civil Procedure Code, once the court admits the case identifying the substantial questions of law and formulating the same, thereafter the parties cannot raise any other substantial question of law without the prior permission of the court. Learned counsel for the appellant/defendant at the time of submitting his arguments, sought the leave of the court to raise one more question as additional substantial question of law involved in this case. The additional substantial question of law suggested by the learned counsel is, "whether the finding of the courts below that Ex.A1 is a genuine document is perverse?" After hearing the submissions of Mr.N.Manokaran, learned counsel for the respondent/plaintiff in this regard, this court forming an opinion that such a question has arisen in the second appeal and the interest of justice requires granting of permission to raise such a question, permits the appellant to do so. Accordingly, the following question is framed as 5th substantial question of law:
" 5. whether the finding of the courts below that Ex.A1 is a genuine document is perverse?"
8. Though the second appeal was admitted in August 2009 itself, till date the records from the lower courts have not been received. However, both the counsel appearing for the parties expressed their readiness to argue the case and have a judgment based on the copies of the documents produced in this second appeal in the form of typed set of papers. The learned counsel for the parties also submit that the correctness of the extracts of evidence made by the courts below is not disputed. It is also their submission that the copies of the documents produced are true copies and hence relying on those copies, this court can pronounce a judgment on merit. Accordingly, this court hears the argument of Mr.P.Valliappan, learned counsel appearing for the appellant and that of Mr.N.Manokaran, learned counsel appearing for the respondent and proceeds with the rendering of a decision in this second appeal on merit.
9. As many as five questions have been identified and formulated as substantial questions of law involved in the present second appeal. For the sake of convenience, this court wants to deal with the said questions not in the order they have been formulated. The question framed as the second substantial question of law is taken up before ever the other questions are taken up for discussion.
10. Learned counsel for the appellant has contended that Ex.A1, based on which the respondent herein/plaintiff has made his claim, being an unregistered mortgage reciting a loan amount of more than Rs.100/- secured by such mortgage is inadmissible as per section 49 of the Registration Act. Learned counsel for the respondent/plaintiff would submit that the question of admissibility of the said document cannot be reopened, since the same was raised at an earlier point which culminated in an order passed by this court in C.R.P. No.1573 of 2004. Of course it is true that the appellant herein/defendant resisted the reception of Ex.A1 as a documentary evidence on the ground of want of registration by filing a petition in I.A.No.649 of 2003 in the suit to reject the said document. The said petition was dismissed and the attempt made by the appellant herein/defendant to get the order set aside by filing the civil revision petition, proved to be a failure.
11. But it must be noticed that an unregistered document, which is required to be compulsorily registered under section 17 of the Registration Act, cannot be received in evidence for establishing any right under the document. Admittedly Ex.A1 has been styled as usufructuary mortgage deed in respect of an immovable property. The amount sought to be secured is Rs.1,45,000/-. Hence, as rightly contended by the learned counsel for the appellant, it requires registration under section 17 of the Registration Act. What section 49 of the Registration Act prohibits the reception of such unregistered document which requires registration under section 17 as evidence of any transaction affecting any immovable property dealt with in the document. To be precise the document Ex.A1 could not be received as evidence for the establishment of any right in respect of the property allegedly mortgaged or for the enforcement of any right under the mortgage. The proviso to section 49 permits reception of such document as evidence of a contract in a suit for specific performance or as evidence of a collateral transaction not required to be effected by a registered instrument. Admittedly, the present suit has not been filed for specific performance of a contract for execution of a mortgage deed. The respondent/plaintiff has not chosen to file the suit on the mortgage allegedly created under Ex.A1. On the other hand, Ex.A1 has been produced only for a collateral purpose, namely to prove loan transaction between the respondent herein/plaintiff and the appellant herein/defendant. Only in that sense Ex.A1 was admitted in evidence and this court also held that marking of Ex.A1 was not against law. Hence the second substantial question of law is to be answered accordingly against the appellant herein/defendant holding that reception and marking of Ex.A1 in evidence is not improper in law.
12. The first substantial question of law is regarding the plea of limitation. According to the learned counsel for the appellant, since the alleged loan transaction took place on 19.06.1998, the limitation for the recovery of the amount allegedly lent, as per article 19 and 21 of the Limitation Act will be three years and hence the suit ought to have been filed within three years from the date of alleged lending. According to the submission made by the learned counsel for the appellant, since the same was not filed within three years, the suit filed by the respondent/plaintiff is hopelessly barred by limitation. Per contra, Mr.N.Manokaran, learned counsel for the respondent/plaintiff would submit that since the loan transaction is evidenced by Ex.A1-Usufructuary Mortgage Deed, it will attract article 62, wherein 12 years period has been prescribed as the period of limitation. According to the learned counsel for the respondent/plaintiff, he is entitled to a statutory charge over the property mentioned in Ex.A1 and the limitation will be 12 years as per article 62 of the Limitation Act, 1963. The above said contention of the learned counsel for the respondent/plaintiff cannot be countenanced. As pointed out supra, Ex.A1 cannot be relied on to prove any right under the mortgage, especially any right in respect of the immovable property, as it has not been registered. The document has been received in evidence only for the collateral purpose of proving the lending of money. Further, unless it is proved that a valid mortgage has been created, the respondent cannot be heard to contend that the limitation for the recovery of the money secured by Ex.A1 shall be 12 years.
13. The other contention made by the learned counsel for the respondent/plaintiff is entitlement to a statutory charge over the property mentioned in Ex.A1 and hence the limitation as per article 62 will be 12 years also deserves to be rejected. If at all the document itself creates a charge over the immovable property, it suffers from the defect of want of registration and hence the same cannot be used for showing that a charge in respect of the immovable property has been created in and by the document. However, the learned counsel for the respondent/plaintiff would submit that the respondent/plaintiff should be equated with a person having entered into an agreement for the purchase of an immovable property and he should be held to be entitled to a statutory charge over the property in respect of which the agreement was entered into. Ex.A1 cannot be construed to be an agreement. It has been admitted for a collateral purpose of proving the loan transaction. The position of a purchaser under an agreement for sale cannot be equated with a creditor who is yet to get the mortgage created. Therefore the contention of the learned counsel for the respondent that the limitation for filing the suit shall be governed by article 62 of the Limitation Act is bound to be rejected.
14. Yet another contention was made on behalf of the respondent/plaintiff to the effect that as Ex.A1 contains a recital that the amount shall be repaid after five years, the period of limitation will start running from the expiry of the period of five years found noted in Ex.A1 and that hence the suit has been filed well within time. At the cost of repetition, this court wants to point out that Ex.A1 has been received in evidence only for the collateral purpose of proving that there was a money transaction between the respondent, by which the respondent lent a sum of Rs.1,45,000/- to the appellant. Apart from that, the purpose cannot be stretched further to give effect to the other covenants found in the said deed. It is made clear that the suit has been filed as a simple money suit for the recovery of money lent. The appropriate article in the Limitation Act is article 19, which says that the period of limitation shall be three years, counted from the date on which the loan is made. Even assuming that Ex.A1 can be construed as an agreement under which the money was lent, it would attract article 21 of the Limitation Act, which prescribes limitation for money lent under an agreement with stipulation that it shall be payable on demand. There also the starting point of limitation is the date on which the loan is made. Admittedly, Ex.A1 contains a clause that the appellant/defendant should make payment on demand, may be after the lapse of the period stipulated in the agreement. But article 21 of the Limitation Act does not say that the limitation will start running from the date of demand or date of expiry of any period prescribed for repayment. It simply says that the limitation starts running from the date on which the loan is made. On that score also the contention of the learned counsel for the respondent/plaintiff that the limitation started running only after the expiry of five years from the date of Ex.A1 is bound to be discountenanced.
15. In addition, the case projected by the respondent/plaintiff is that he should be allowed to enjoy the land in lieu of interest. However, the respondent/plaintiff has come forward with a contention that within a month from the date of Ex.A1 i.e. on 04.07.1998 itself, the appellant/defendant trespassed into the property, possession of which had been handed over to the respondent/plaintiff in pursuance of Ex.A1. Then the right to recover the money with interest would have accrued on 04.07.1998 itself. The suit has not been filed within three years thereafter. Again there is a stipulation in Ex.A1 that within one month from 19.06.1998, the appellant/defendant should get the document registered paying additional stamp duty and bearing the registration charges. When the plaint itself contains an averment that the defendant has agreed to get the mortgage deed registered within one month, in case of such refusal to do so, the right to sue would have arisen on the expiry of that period of one month itself. Viewed from any angle, the suit filed on 16.06.2003, as rightly contended by the learned counsel for the appellant/defendant is hopelessly barred by limitation. Both the courts below have committed an error in holding that the suit is not barred by limitation. Hence the first substantial question of law is answered accordingly in favour of the appellant/defendant.
16. Ex.A1 has been written using a 50 rupees stamp paper purchased on 2nd August 1997 in the name of one P.Lakshmanan of A.Mettupalayam. The name of the village of the appellant/defendant has been noted in the recital of Ex.A1 as K.Mettupalayam. It has also been recited in evidence that there is another village named A.Mettupalayam. When the said discrepancy was pointed out, the learned counsel for the respondent/plaintiff submitted that it was the appellant, who bought the stamp paper and brought it to the respondent; that for any mistake that had crept in describing his village in the stamp paper by the stamp vendor, the respondent could not be held responsible and that the same alone could not be taken as a ground for disbelieving the said document. If at all the same was the sole ground on which the genuineness of the document is attacked, the contention of the learned counsel for the respondent/ plaintiff shall remain unassailable. On the other hand, there are other vital factors based on which the genuineness of the document is assailed. They are as follows:
i) First of all the property, which was purported to be mortgaged, was not available with the appellant/defendant in its entirety, as he had settled part of the same in favour of his son two years prior to Ex.A1. The certified copy of the registered settlement deed dated 31.05.1996 has been produced as Ex.B1. By producing the same, the appellant/defendant has made it clear that the property described in Ex.A1 in its entirety does not belong to him in its entirety and on the other hand, part of the property had already been settled in favour of his son.
ii) When a loan document is executed, it is the normal practice to incorporate a clause with precision regarding the period allowed for repayment. In this case, there is ambiguity in the period prescribed for repayment of the loan. Loan document was executed, according to the plaintiff, on 19.06.1998. If at all the parties wanted to prescribe a period of five years, then they could have simply stated "five years period" or "on or before 18.06.2003" in the loan document. But a peculiar clause came to be incorporated in Ex.A1. For better appreciation, the same in vernacular is extracted here under:
" ,dp ehsJ njjpapypUe;J Rkhh; Ie;J tUl tha;jhtpw;Fs; mjhtJ 2003k; Mz;L $[[[[[[[^d; khjk; 4e; njjpf;F gpwF tUk; me;j jkpH; rpj;jpiu fhyhtjpapy; ehd; j';fsplk; bgw;Ws;s fld; Jif U:gha; 145000 xU yl;rj;jp ehw;gj;jp Ie;jhapuk; U:gha;fisa[k; tl;o ,y;yhky; ehd; buhf;fkha; brYj;jpdhYk; jh';fs; ahbjhU kWbkhHpa[kpd;wp nkw;go fld; bjhifia ///////"
The said clause seems to have been incorporated in an ingenious way.
iii) Though two persons have attested the document, only one attestor was examined on the side of the respondent/plaintiff and the said attestor is none other than the brother of the wife of the respondent/plaintiff.
iv) There are also material contradictions regarding passing of consideration. As per the evidence of PW.1, he made payment by handing over 10 x 100 rupee notes and 9 x 500 rupee notes. If the total amount is counted, it will account for only Rs.5,500/-. Learned counsel for the respondent would contend that instead of referring to bundles of 100 rupee denomination, by mistake, it has been referred to as notes. If it is so, then 10 bundles of 100 rupee notes will account for one lakh and nine bundles of 500 rupee notes will account for 4,50,000/- rupees and totally they will account for Rs.5,50,000/-. In either case, the above said discrepancy has not been clarified. PW.2, the attestor who was examined by the respondent/plaintiff would state that he did not know how many bundles of currency were brought by the plaintiff. His evidence deviates from that of PW.1, as he has stated that the appellant/defendant took 1= hours to count the money and then signed the document.
v) PW.1 cites the residence of the plaintiff as the place of execution of Ex.A1. But a conjoint reading of the answers given by PW.2 in the cross examination would go to show that he wanted to state that the document was executed in the house of Annamalai, the scribe of the document. Those two answers are extracted here under:
" gzj;ij th';fp gpujpthjp vz;zpdhh;/ 1/\ kzp neuk; gpujpthjp gzj;ij vz;zpdhh;/ vz;zp Koj;j gpwF jhd; gj;jpuj;jpy; gpujpthjp ifbaGj;J nghl;lhh;/"
" gzk; mz;zhkiy tPl;onyna bfhLj;Jtpl;lJ/"
vi) Though plaintiff would have taken a stand that he took possession of the suit property on 19.06.1998 and the defendant trespassed into the property and dispossessed the respondent/plaintiff on 04.07.1998, during his evidence he had admitted that he did not take vacant possession of the land as per the mortgage deed dated 19.06.1998, whereas PW.2 would say that he was present at the time of delivery of possession and there was no crop in the said land at the time of such delivery.
vii) Neither the other attestor nor the scribe has been examined.
17. Apart from the above said contradictions and discrepancies, which cannot be brushed aside as insignificant or trivial, there is yet another aspect, which was not considered by the courts below. According to the plaintiff and even as per the recitals found in Ex.A1, the respondent/plaintiff had to enjoy the property in lieu of interest till the repayment of the amount allegedly borrowed and the appellant/defendant should pay the amount borrowed without interest and retrieve the land. If at all the same was the understanding on which the sum of Rs.1,45,000/- was lent in the year 1998 and within one month the respondent/plaintiff was dispossessed, it is highly improbable for the respondent/plaintiff to have kept quiet for five years without even claiming interest on the basis of the alleged dispossession. The respondent/plaintiff would not have failed to take steps to get back the possession of the property from the appellant/defendant. Not even a notice was sent informing such trespass and informing the appellant/defendant that since possession was taken back by the appellant/defendant, he was liable to pay interest.
18. It is also pertinent to note that in the pre-suit notice sent by the respondent/plaintiff, a copy of which has been marked as Ex.A2, the respondent/plaintiff claimed interest at the rate of 18% per annum from 04.07.1998, the alleged date of dispossession. However, curiously the plaintiff has not claimed any interest in the plaint for the period prior to the filing of the suit. He has chosen to claim interest only from the date of suit. If all these aspects taken together are considered in proper perspective, it will go to show that the transaction alleged by the respondent/plaintiff would not be true and Ex.A1 document could not be a true one. In this regard, both the courts below have failed to properly appreciate the evidence, which resulted not only an erroneous finding, but also a perverse finding, which needs to be interfered with and corrected in this second appeal. Hence this court holds that the finding of the courts below that Ex.A1 has been proved to be a genuine one is perverse and the fifth substantial question of law is answered accordingly. The third substantial question of law does not arise in this appeal and the fourth substantial question of law has been answered in favour of the respondent. But in view of the findings on the substantial questions of law 1 and 5, namely the questions regarding limitation and perversity of the finding as to the genuineness of Ex.A1 in favour of the appellant, the appeal succeeds.
19. In the result, the second appeal is allowed and the judgment and decree of the trial court, namely Sub Court, Sankari dated 19.12.2005 made in O.S.No.69 of 2003, which was confirmed by the lower appellate court, namely the Principal District Judge in his judgment and decree dated 05.07.2006 made in A.S.No.16 of 2006 are set aside. The original suit O.S.No.69 of 2003 on the file of the Sub Court, Sankari shall stand dismissed. The appellant/defendant shall be entitled to cost throughout.
13.12.2012 Index : Yes/No Internet : Yes/No asr/ To
1. The Principal District Judge, Salem
2. The Subordinate Judge, Sankari P.R.SHIVAKUMAR, J asr S.A.No.40 of 2008 13.12.2012