Madras High Court
Unknown vs V.Periya Karuppiah on 19 June, 2012
Author: V.Periya Karuppiah
Bench: V.Periya Karuppiah
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19/06/2012 CORAM THE HON'BLE MR.JUSTICE V.PERIYA KARUPPIAH O.A.Nos.1315 to 1317 of 2008 in C.S.No.1175 of 2008 ORDER :
V.PERIYA KARUPPIAH, J., O.A.No.1315 of 2008: This application has been filed by the applicants seeking to pass an order of interim injunction restraining the respondents/defendants 1 to 4 their agents, servants and men and every one claiming and acting on their behalf from any way interfering with plaintiffs' peaceful possession and enjoyment of the suit property morefully described in the schedule hereunder in any manner whatsoever, pending disposal of the above suit.
2. O.A.No.1316 of 2008: This application has been filed by the applicants seeking to pass an order of interim injunction restraining the respondents/defendants 1 to 4 their agents, servants and men and every one claiming and acting on their behalf from any way alienating or encumbering the suit property morefully described in the schedule hereunder in any manner whatsoever, pending disposal of the above suit.
3. O.A.No.1317 of 2008: This application has been filed by the applicants seeking to pass an order of interim injunction restraining the 4th respondent/4th defendants from in any way dealing with Bank Accounts i.e. Current Account No.1092002100155309 and cash credit facility Account No.1092008700003561 with Punjab National Bank, Taylors Road, Chennai-600 010, morefully described in the schedule hereunder in any manner whatsoever, pending disposal of the above suit.
4. This Court, by its order dated 19.12.2008, initially granted interim order of injunction for a limited period, in all these applications, which was extended from time to time and by order dated 12.4.2010, the interim order of injunction already granted was extended until further orders.
5. The parties are hereinafter referred to as they are ranked in the suit. The common facts in all these applications, in a nut-shell, are as follows:
(a) The plaintiffs are husband and wife. The first plaintiff is the Proprietor of Raj Enterprises, running a petrol bunk, having tie up with Indian Oil Corporation. The plaintiffs are having several businesses and having means and are also having properties in and around Tamil Nadu, and also dealing with several banks and financial institutions and availing of the credit facilities and repaying the same. One of those Banks is Punjab National Bank, at Taylors Road, Chennai, wherein, the plaintiffs are having Savings Bank Account for more than seven years and used to deposit the daily collections and having over-draft facility for more than five years, which facility has also been enhanced from time to time owing to their genuineness and promptness in repaying the money due to the Bank. The Current Account Number of the plaintiffs is 1092002100155309 and Cash Credit Account Number is 109200870000356. The plaintiffs used to transact their business transactions through Current Account and also availed over-draft facility through Cash Credit Account.
(b) The plaintiffs are having over-draft facility to the tune of Rs.75 lakhs and for the said facility, the plaintiffs have given the title deed pertaining to the properties at K.K.Nagar and Kottur Gardens. The K.K.Nagar property devolved upon the second plaintiff through her father by a Registered Settlement Deed, dated 3.7.2006. The Kottur Gardens property belongs to the father-in-law of the second plaintiff. The properties which have been given as security, worth about several crores of rupees, and they are located in the prime locality of Chennai City.
(c) The fourth defendant, being the Branch Manager of the Punjab National Bank of the said Branch, gained the plaintiffs' confidence as a well-wisher and the plaintiffs were also under bona-fide impression of whatever 4th defendant tells, and D.4 in collusion with the other defendants, had been playing fraud upon the plaintiffs, cheating and dominating them, to grab the suit property from the plaintiffs.
(d) The suit property morefully described in Schedule A, situated in K.K.Nagar, Chennai, measuring 880 Sq.Ft., is worth about Rs.80 lakhs. The Kottur Gardens property is worth Rs.2.5 crores to Rs.3 crores in July 2008. With respect to Cash Credit Transactions of the Bank, the plaintiffs have been forced by the 4th defendant to sign on some blank papers and took the plaintiffs' signatures, under the guise of completing the formalities with regard to the limit of Rs.75 lakhs for Cash Credit Facility. Under the instructions from the 3rd defendant, the plaintiffs have been asked to give security by the 4th defendant, and the plaintiffs did not know what transpired in between defendants 3 and 4 with regard to security to be given by the plaintiffs. The defendants 3 and 4 gave assurance to the plaintiffs that the loan given by 3rd defendant can be settled and the security papers will be returned to the plaintiffs, the same being only for one or two months, and the cash credit limit will be increased before May 2008 to another Rs.30 lakhs. The parent documents pertaining to the suit property, were with the 4th defendant as against the cash credit facility availed. It is stated by the plaintiffs that 4th defendant also collected some blank cheque leaves on 31.3.2008 from them. The plaintiffs were getting cheques from Indian Oil Corporation which the plaintiffs had to clear only through the Punjab National Bank/5th defendant, and hence, the plaintiffs are the hands of 4th defendant.
(e) The delay in enhancing the cash credit facility as promised by 4th defendant, caused great hardship and it was very difficult for the plaintiffs to pay an exorbitant interest of Rs.1,05,000/- per month, which the plaintiffs allege as like "Kanthu Vaddi". The plaintiffs submit that their loan is a secured loan. 4th defendant said that if interest is not paid, the same will be adjusted from the account of plaintiffs and from the cheques received from Indian Oil Corporation. 4th defendant told the plaintiffs that the Head Office of the Punjab National Bank told 4th defendant that the Cash Credit facility of Rs.75 lakhs has to be closed and they will sanction new Cash Credit facility of Rs.1 crore and five lakhs. 4th defendant also suggested the plaintiffs to approach some other Bank and get loan and close the Cash Credit facility by paying Rs.75 lakhs.
(f) It is stated by the plaintiffs that they have approached the City Union Bank, Mandaiveli, Chennai-28 for loan, which Bank suggested the plaintiffs to open a Bank Account with them, and accordingly a Bank Account was also opened by the plaintiffs and the plaintiffs started putting the cheques from the petrol bunk business. The City Union Bank, after following the formalities, sanctioned a Credit facility of Rs.76 lakhs. The City Union Bank wanted immovable property as security. The plaintiffs informed 4th defendant that the City Union Bank has sanctioned them a Credit facility of Rs.76 lakhs and the plaintiffs wanted the title deeds back, to give the same to City Union Bank. 4th defendant said that he will release the title deeds pertaining to Kottur Gardens property first, so that it can be given to City Union Bank. Accordingly, 4th defendant released the title deeds pertaining to Kottur Gardens property alone and it was given to City Union Bank and the City Union Bank released the loan to the tune of Rs.76 lakhs, and utilizing the same, the plaintiffs closed the entire Cash Credit facility with the Punjab National Bank through 4th defendant, and these transactions happened in July 2008.
(g) Thereafter, the plaintiffs approached 4th defendant for closing the loan given by 3rd defendant if the title deeds pertaining to suit property at K.K.Nagar is also released, as the plaintiffs have closed the Cash Credit facility. 4th defendant said he will talk to 3rd defendant. Then, 3rd defendant, along with 2nd defendant, started coming to the petrol bunk from August 2008 and the plaintiffs told them that only 4th defendant arranged for everything and will have discussion with them. Then, the plaintiffs met 4th defendant and asked to arrange for a meeting, which was also arranged in September 2008 and at that time, 3rd defendant demanded Rs.60 lakhs for a loan of Rs.30 lakhs which was given by 3rd defendant on 31.3.2008. 3rd defendant called upon 4th defendant to direct the plaintiffs to agree to keep the title deeds pertaining to the suit property with 3rd defendant, to which the plaintiffs made clear that they will not agree. 4th defendant attempted to suggest that the title deeds of K.K.Nagar property be kept with a common person known to both till the loan with 3rd defendant is settled. 3rd defendant said that he will arrive at a reasonable figure after having discussion with 4th defendant. The plaintiffs had no other go except to accept the same. But 4th defendant did not release the title deeds, and when 4th defendant was again contacted, he suggested to open a locker in his branch of Punjab National Bank and the title deeds can be kept in the locker and one key of the locker will be given to the plaintiffs and another with 3rd defendant. 4th defendant further stated that the locker can be opened only when both come with the keys. 4th defendant further stated that if the plaintiffs agree for such a course, he will persuade 3rd defendant to agree for reasonable interest and arrive at a reasonable figure within few days. The plaintiffs accordingly opened the locker in the joint names of them and 3rd defendant in the branch of 4th defendant and put the title deeds pertaining to suit property in the locker, under the advise of 4th defendant that he will settle the matter with 3rd defendant shortly.
(h) From September 2008, the plaintiffs have been approaching 4th defendant to settle the loan of Rs.30 lakhs with 3rd defendant with some reasonable interest, and 4th defendant has all alone been promising and 4th defendant, in September 2008, told the plaintiffs that if they are ready to show their bona-fide by paying about Rs.20 lakhs, out of Rs.30 lakhs, 4th defendant will be able to persuade 3rd defendant and further promised that 3rd defendant will reduce the interest and settle the loan. Believing the representations of 4th defendant, the plaintiffs arranged for Rs.20 lakhs and paid the same to 4th defendant. Then, 4th defendant told that he has closed the over-draft facility in the Current Account, by adjusting the said sum of Rs.20 lakhs instead of paying 3rd defendant and also by adjusting Rs.7,50,000/- from some other account at 4th defendant's Branch. Being disturbed, the plaintiffs questioned 4th defendant as to why he actually not paid the said sum of Rs.20 lakhs to 3rd defendant. Towards the last week of October 2008, 4th defendant started acting strangely and told that whatever 3rd defendant demands, the plaintiffs have to pay and clear the loan.
(i) The suit property was in possession of the plaintiffs through their tenants, who informed that in the property situated at K.K.Nagar, the real estate brokers made enquiries as if the property is for sale. The plaintiffs are surprised and shocked to see that some document had been registered as Power of Attorney in the Office of Sub-Registrar, Periamet, and then, the plaintiffs immediately applied for certified copy of the document and those documents were styled as sale agreement and sale deed in respect of the suit property registered at Sub-registrar Officer, Ashok Nagar. 3rd defendant demanded that if only the plaintiffs pay Rs.60 lakhs, he will cancel all those documents. 3rd defendant also said that if the plaintiffs do not pay the money as demanded, he may use those documents.
(j) During second week of December 2008, due to highhandedness of 3rd defendant, some persons wanted to measure the suit property, as informed by the plaintiffs' tenants. Inspite of plaintiffs' request, 3rd defendant was adamant in demanding Rs.60 lakhs, as stated earlier, in respect of the loan obtained by the plaintiffs at Rs.30 lakhs on 31.3.2008. 3rd defendant threatens plaintiffs and trying to dispossess them by taking law into their own hands. Hence, the suit has been immediately filed by the plaintiffs.
(k) Defendants 1 to 4 acted in collusion and conspiracy with each other and played a fraud upon the plaintiffs. The plaintiffs never intended to execute any Power of Attorney. 3rd defendant is trying to create further sale deeds in favour of some influential persons and challenged the plaintiffs that they will be thrown out of the suit property. When the plaintiffs approached the Police, they advised the plaintiffs to approach a Civil Court, stating that the dispute is civil in nature.
(l) 4th defendant got the signatures of the plaintiffs without disclosing the nature and character by gross mis-representation that it is only a security. The document is now said to be claimed as a Power of Attorney to deceit the plaintiffs. 2nd defendant is none other than the employee of 3rd defendant. As on the date of the fraudulent sale deed, the value of the suit property was about Rs.80 lakhs, which is claimed to be sold for only Rs.27 lakhs, which the plaintiffs came to know only on 12.12.2008 when attempts were made by the defendants to dispossess the plaintiffs from the suit property. Hence, the plaintiffs have approached this Court for interim injunction by way of these applications.
(m) The applicants/plaintiffs allege that they have made out a prima-facie case in their favour and that the balance of convenience is also alleged to be in their favour for grant of injunction in these applications. If the respondents/defendants are allowed to further encumber or alienate the suit property, the interest of third parties will intervene and it will also result in multiplicity of proceedings. As fraud nullifies everything, the applicants/plaintiffs pray for interim injunction in these applications. The respondents will not be prejudiced if the plaintiffs are granted interim order of injunction in these applications. Hence, these applications.
6. The first respondent/1st defendant has filed a counter affidavit, stating inter-alia, as follows:-
(a) The applications filed by the applicants/plaintiffs, are an abuse of process of law, as they have suppressed vital facts and documents and they have approached this Court with unclean hands. The present suit filed by the plaintiffs is an attempt to regain the suit schedule property in unlawful manner, after receiving the entire sale consideration and after all encumbrances over the property have been cleared.
(b) The entire allegations contained in the applications commencing from paragraphs 1 to 22 of the affidavit, pertain to certain transactions between respondents 3 to 5 and the applicants/plaintiffs. The averments pertaining to alleged commissions and omissions of the fourth respondent is a ruse adopted by the applicants to divert the actual issue and have been deliberately made to suppress the actual events that transpired between the applicants, 1st respondent and one Mr.Chandran, who for reasons best known, has not been impleaded as a party.
(c) The documents which the applicants have deliberately suppressed and which are vital to establish the actual transactions are:-
(i) agreement of sale signed by the applicants with Mr.A.Chandran, dated 31.3.2008, for selling the suit schedule property;
(ii) letter dated 31.3.2008 given by the applicants to the fifth respondent herein confirming the execution of the agreement of sale in favour of Mr.Chandran;
(iii) declaration dated 31.3.2008 requesting fifth respondent to hand over title deeds to the brother of the third respondent who is the agreement holder and agreeing not to cancel the Power of Attorney executed in favour of the second respondent as the same is coupled with consideration.
(d) The actual turn of events that transpired between the parties are narrated by the first respondent as below:
a.The applicants approached one Mr.Chandran, for sale of the suit schedule property and after negotiations, the sale consideration for the suit schedule property was originally fixed at Rs.30 lakhs. On 31.3.2008, an agreement of sale was entered into and on the same day, the entire sale consideration was paid by way of two cheques, with a basic condition of the applicants for sale of the suit schedule property that the entire sale consideration must be paid on or before 31.3.2008. At the time when the agreement of sale was entered into, the property was mortgaged with D5 and it was the duty of the applicants/plaintiffs to clear the mortgage. In fact, the sale deed could not be registered due to the mortgage, as it would cast cloud on the title of the purchaser. Therefore, the applicants/plaintiffs' duty is to discharge the mortgage and only thereupon, sale deed was to be executed in favour of Mr.Chandran or his nominees. It was specifically recorded in the agreement of sale that constructive possession of the suit schedule property, was being handed over to the said Chandran since the same was let out. That apart, as per the terms contained in the agreement of sale, considering the fact that the entire sale consideration has been paid, the applicants were under the obligation to execute a Power of Attorney in favour of the nominee of the said Chandran, namely the second respondent herein and the same was done accordingly.
b. It is further stated that on 31.3.2008, the applicants gave a letter to the fifth respondent stating that they have entered into an agreement of sale with the said Chandran and requested the fifth respondent to hand over the original title deeds of the suit schedule property to Mr.Chandran. The applicants have further stated that another property in Kotturpuram which was offered as security for the facilities availed of by them, was worthy enough to cover the liabilities and requested the Bank to hand over the documents of suit schedule property to Mr.Chandran. In addition, the applicants also executed a declaration stating that they will not cancel the Power of Attorney and requested the fifth respondent to hand over original title deeds of suit schedule property to Mr.Chandran, agreement holder.
c. It is further averred that the applicants would discharge the liability of the fifth respondent with the monies given by the said Chandran. Unfortunately, the applicants did not discharge the mortgage with a mala-fide intention of frustrating the agreement of sale, dated 31.3.2008 and demanded further sum. Subsequently, the said Chandran approached the first respondent to resolve the issue. At this juncture, the first respondent evinced interest in purchasing the suit schedule property. Mr.Chandran, the agreement holder, explained all the complexities involved in the transaction.
d. It was pointed out to the first respondent that he will have to pay money to the tune of Rs.20 lakhs to the applicants for clearing the mortgage and additional monies of Rs.7 lakhs for the personal use of applicants, that there will be charge on the suit schedule property to the tune of Rs.30 lakhs paid by Chandran to the applicants. A memorandum of understanding to this effect was also entered into on 27.9.2008. Pursuant to the said memorandum of understanding, the applicants through their Power Agent, namely the second respondent herein entered into a registered agreement of sale on 29.9.2008. The first respondent herein paid a sum of Rs.27 lakhs to the applicants personally on 29.9.2008. With the above mentioned sums, the applicants personally cleared the debts payable by them to the fifth respondent. Subsequently, on 14.10.2008, the mortgage in respect of the suit schedule property was duly discharged and a receipt was executed and registered. After the mortgage in respect of the suit schedule property was discharged, a deed of absolute sale was executed by applicants through their Power Agent on 24.10.2008. It is further stated that after the mortgage was discharged, the applicants were not inclined to hand over the original title deeds of the suit schedule property and were demanding further monies, stating that they needed additional sum of Rs.1.50 lakhs to vacate the tenants and further declined to settle the monies received from the brother of the third respondent under agreement of sale, dated 31.3.2008. The third respondent was called upon to mediate and it was agreed by the applicants and the first respondent that the original title deeds will be joint custody of the second applicant and the third respondent, till the dispute regarding the vacating of tenant and the cost to be incurred thereon, are resolved.
e. It is further stated by the first respondent/D1 that the basis for the suit stands thus falsified and the following are the suppressed facts:-
(i) The agreement of sale with Chandran, dated 31.3.2008 and the monies received thereon, have been suppressed. The authorisation letter, dated 31.3.2008 given to the fifth respondent, for handing over title deeds to Chandran and the execution of the agreement of sale by receiving the entire sale consideration have also been suppressed. The first respondent does not know as to in what capacity and for what purpose, the third respondent herein has been arrayed as a party and Mr.Chandran who entered into an agreement of sale on 31.3.2008 with the applicants have been left out. The applicants cannot feign ignorance of receipt of huge sum of Rs.30 lakhs and say that they signed the agreement of sale/blank papers with Chandran. The payment towards entire sale consideration was made by way of two cheques from the account of Mr.Chandran and this has not been disputed and purposefully suppressed in the suit. Further, the applicants they have on their own volition addressed a letter to the fifth respondent for handing over title deeds to Chandran. The applicants cannot plead that they executed all the documents without knowing the contents. The applicants have suppressed the declaration executed by them on 31.3.2008 agreeing not to cancel the Power of Attorney executed in favour of second respondent and also requesting the fifth respondent to hand over original title deeds directly to Mr.Chandran.
(ii) It is further stated that the applicants by their own admission as contained in paragraphs 3 and 4 of the affidavit are presents who are running a petrol bunk, having several business establishments and having lot of properties in Tamil Nadu, and when that be so, it is strange and outlandish on the part of applicants to allege in paragraph 12 of their affidavit that they have signed some papers as security without knowing its contents. It would be clear that these allegations have been made for the sake of suit without any iota of truth. The agreement of sale dated 31.3.2008 signed by the applicants to and in favour of Mr.Chandran clearly discloses that constructive possession of the suit schedule property has been handed over to the purchaser, namely Chandran. Clause 8 of the agreement for sale, dated 31.3.2008 pertaining to possession reads as follows:
"The vendors have handed over constructive possession of the said property to the purchaser at the time of signing this agreement of sale."
(iii) The applicants allege that they have paid monies Rs.1.50 lakhs to clear the tenants, and they are trying to hold on to the property in contravention of the agreement entered into with the first respondent and the previous agreement holder who nominated the first respondent. Subsequent to the execute of the sale agreement and Power of Attorney after the receipt of the total sale consideration, the applicants ceased to be the owners and shall not have any title or possessory right over the suit property. The first respondent alone has got unfettered right, interest and title over the suit property and shall have control over the tenant. This clearly proves that the claim of the applicant that they still are in possession is false and the reason for non-disclosure of agreement of sale, dated 31.3.2008 is obvious.
(iv) It is further stated that the applicants have cleared the debt of the fifth respondent with the monies paid by the first respondent and only thereupon, the mortgage has been discharge and they have personally presented the cheques issued by the first respondent and collected the original title deeds of the suit schedule property from the fifth respondent. The applicant's claim that the market value of the suit schedule property is about Rs.80 lakhs and that the same has been sold for a paltry sum of Rs.27 lakhs, raises doubts about the genuineness of the sale deed impugned in the suit. This pleading of the applicants contradicts their own document, namely the agreement of sale dated 31.3.2008, and if really the market value of the suit schedule property was about Rs.80 lakhs as claimed in paragraph 24 of the affidavit, there is no reason for the plaintiffs to have entered into an agreement of sale on 31.3.2008 for Rs.30 lakhs. The reason for non-disclosure of the agreement of sale entered into with Mr.Chandran stands further exposed. The guideline value of the suit schedule property which is about 880 Sq.Ft., of land is Rs.10,65,000/- with the value of superstructure being about Rs.4 lakhs, and the market value would be about Rs.27 lakhs, and not Rs.80 lakhs as claimed by the applicants.
(v) From the averments contained in the plaint as well as the affidavit, it is clear that the applicants have defaulted in repaying the credit facilities from the fifth respondent. The first respondent invested his hard earned monies and availed of the loan for purchasing the suit property.
(vi) After detailed enquiries and after the present suit was filed, the first respondent came to know about the actual nature of the applicants. The first respondent reliably learns that the applicants are having a habit of involving themselves in such similar litigations in respect of the properties owned by them. In respect of the property comprised in No.941, 17th Main Road, Anna Nagar West, owned by the applicants, they have refused to execute a sale deed despite receiving sale consideration and that a suit in this regard is pending. That apart, several cases have been filed by the creditors, including their driver Gunasekaran as against them, for return of monies. These events and the manner in which the applicants have approached this Court would clearly disclose that the applicants are not trustworthy with a proven record of fuelling litigations and initiating frivolous litigations and the present suit is one such attempt.
(vii) It is further claimed by the first respondent that the 1st applicant is a Doctor who has presented several papers on Psychiatry and is a Ph.D. In Psychology. It would be strange to accept the allegation that being such a well read person having a huge social standing, he signed papers without knowing its contents and implications. The averments to this effect are lackadaisically made for the purpose of pleading without any iota of truth.
(viii) The applicants did not state in the plaint that the second respondent who is their agent, misused the Power of Attorney or that the Power was not in force when the sale deed was executed in favour of the first respondent. In other words, the action of the Power Agent, the second respondent, has been impliedly ratified. Such being the case, the sale deed executed in faovur of the first respondent, cannot be challenged. The applicants have personally used the monies given by the first respondent for clearing the loan of the fifth respondent and therefore, cannot claim ignorance of the sale agreement and deed thereon.
(ix) It is stated by the applicants that all the allegations made against the fourth respondent and the alleged connivance with the third respondent is an afterthought to camouflage the real issue. Serious prejudices and irreparable hardship would be caused to the first respondent, if the interim order is not vacated. The applicants having approached this Court with unclean hands and also having suppressed vital facts and documents, are not entitled for any relief in the suit, much less in the interim applications. Hence, the first respondent pray for vacating the ad-interim injunction already granted on 22.12.2008 in the applications and to dismiss the applications.
7. The second respondent in his counter affidavit, has stated as follows:
(i) The second respondent disputes the averments of collusion and fraud pleaded by the applicants as against the second respondent, and it is stated that the applicants have sworn false statements and created fictitious events to suit their convenience on the actual dates when different transactions took place. It is stated that the actual transaction took place in March 2008 in respect of execution of an agreement of sale by the applicants with one Mr.Chandran, the brother of of the third respondent to convey the suit schedule property for a sum of Rs.30 lakhs. This has been suppressed by the applicants in the suit. In the sale agreement dated 31.3.2008, entered into between the brother of the third respondent and the applicants, the applicants have agreed to sell the suit schedule property to Mr.Chandran, the brother of third respondent for a sum of Rs.30 lakhs on 31.3.2008. The entire sum was paid on the said date. Since the property was mortgaged to fifth respondent, it was necessary for the applicants to clear the mortgage and thereupon, the sale deed was to be executed.
(ii) It is stated by the second respondent that as per Clause 12 of the agreement of sale, it was specifically agreed between the parties that a Power of Attorney would be executed in favour of the second respondent, the nominee of the brother of the third respondent, since the total sale consideration has been paid. In pursuance of the agreement of sale and receipt of full sale consideration, the applicants executed a Power of Attorney nominating the second respondent as their agent. From time to time, the applicants have been updated about the actual turn of events. Added to the above documents, the applicants have also executed a declaration stating that they will not cancel the Power of Attorney executed in favour of the second respondent on account of the fact that it is coupled with consideration. The above declaration was sown by the applicants in the present of Notary Public.
(iii) It is further stated by the second respondent that the applicants filed to discharge the mortgage by the money given by the brother of the third respondent, the first respondent was nominated as the purchaser by the third respondent. The Power for such nomination is conferred in the agreement of sale, dated 31.3.2008. The first respondent paid a sum of Rs.27 lakhs to the applicants. In fact, the applicants personally deposited the cheques given by the first respondent with the fifth respondent. Thereafter, the mortgage was discharged. After the mortgage was discharged, the sale deed was executed in favour of the first respondent by the second respondent, as an agent of the applicants. Even this transaction was done with the knowledge of the applicants. The applicants cannot dispute the fact that they have on date, received a total sum of RS.57 lakhs from the first respondent and the brother of the third respondent. If they claim ignorance about the execution of sale agreement, the applicants cannot certainly claim ignorance about the monies paid by the first respondent and the brother of the third respondent which they have personally appropriated.
(iv) It is further stated that the value of the property as quoted in the sale deed is commensurate with the actual market value that existed at that point of time. That apart, as an agent the second respondent acted in accordance with the authority conferred on him. He has not exceeded the Power, nor do the applicants plead that the second respondent exceeded the Power conferred on him and acted against the interest of the Principal. The Power of Attorney certain confers Power for execution of sale deed. Further, the second respondent need not account to the applicants/Principals as all the monies have been directly received by them and appropriated. The applicants have suppressed the execution of agreement of sale, declaration, execution of Power of Attorney, the monies they have personally received from the purchasers and have preferred the suit containing a total set of allegations which never had taken place. Hence, for all these reasons, the second respondent pray for dismissal of the applications.
8. The third respondent, in his counter affidavit, has stated as follows:
(a) The applications filed the applicants, are an abuse of process of law, aimed to harass the third respondent. Apart from being guilty of suppressing vital material facts, the applicants are guilty of making wilful misrepresentation of facts before this Court for obtaining orders in their favour. The third respondent is not connected with the transaction complained of and with an ulterior motive, he has been impleaded as a party.
(b) It is highly preposterous on the part of the applicants to allege that they were introduced to the third respondent for the first time by the fourth respondent in the second week of March 2008, which would expose the idea behind the suit and the applications. The third respondent is functioning as an authorised signatory of M/s.Thiruvenkatam Agency and M/s.Lakshmi Abhishek Value Enterprises, which is engaged in providing and arranging finance to their clients. During the course of business, the third respondent, acting on behalf of both the above mentioned firms, advanced funds to M/s.Raj Enterprises represented by its Proprietor Santhanam, the first plaintiff, since March 2007. The applicants borrowed monies to the tune of more than Rs.30 lakhs and repaid the same over a period of time. Therefore, the allegation in the affidavit of the applicants that the fourth respondent introduced the third respondent in March 2008 for regularisation of cash credit limit of the applicants, is false due to the act of applicants' conduct in wilfully misrepresenting the facts before this Court for obtaining relief.
(c) It is further stated that insofar as the transactions between the third respondent and the applicants, the fourth respondent was never involved and the relationship between the third respondent and the fourth respondent, is that of mere acquaintance rather than any commercial interest. The allegations of the applicants regarding faith on the fourth respondent, cash credit transactions with the fourth respondent, the alleged introduction of the third respondent to the applicants by the fourth respondent, payment of Rs.30 lakhs by the third respondent, demand of security by the third respondent for the said loan, execution of certain documents and registration of the same with the assistance of the second respondent in favour of the third respondent, demand of Rs.60 lakhs for the settlement of loan of Rs.30 lakhs, the alleged sale deed executed by misusing the documents signed by the applicants, are all denied by the third respondent.
(d) Even before the alleged introduction of the third respondent by the fourth respondent, the third respondent is known to the applicants in respect of various financial transactions. There was no occasion for the third respondent to lend the amount to the applicants in the end of March 2008, as he did not have huge money at that time. The transaction as projected in the plaint is a subterfuge to hide the actual events that transpired between the applicants and the brother of the third respondent. The suit schedule property was actually let out to some third party and the applicants wanted to dispose of the same for settling the liabilities before 31.3.2008. The applicants approached the brother of the third respondent, namely A.Chandran informing the availability of the suit schedule property for sale, stipulating mainly that the entire amount of sale consideration was required by them urgently before 31.3.2008 and after physically inspecting the property, the brother of the third respondent was interested in purchase of the same for his personal use. Thereafter, mutual negotiations took place between the applicants and the brother of the third respondent and the sale amount was fixed at Rs.30 lakhs. The suit schedule property was then subjected to a mortgage with the fifth respondent. Therefore, it was stipulated in the agreement of sale dated 31.3.2008 that the encumbrance should be cleared by the applicants utilizing the sale consideration received by them.
(e) It is further stated that the brother of the third respondent paid the entire sum of Rs.30 lakhs by way of two cheques of Rs.10,000/- and Rs.29,90,000/- drawn in favour of the second plaintiff, which had been encashed and utilised by the plaintiffs. Since the encumbrance was not cleared by the applicants, the sale deed could not be registered at that point of time. Recognizing the fact that the brother of the third respondent paid the entire sale consideration, the applicants executed a Power of Attorney in favour of the second respondent, the nominee of the brother of the third respondent, on 31.3.2008. This is evident from the agreement of sale, dated 31.3.2008, which was signed by the applicants. After signing all the above documents, the applicants suppressed the same.
(f) Added to the Power of Attorney, the applicants signed a declaration stating that they will not cancel the Power of Attorney executed in favour of the second respondent and in the said declaration, the applicants requested the fifth respondent to hand over original title deeds of the suit schedule property to Mr.A.Chandran directly. After signing all the above documents, the applicants suppressed the same. The brother of the third respondent came to know that the applicants were unable to discharge the mortgage with the monies advanced by him and that a further sum of Rs.20 lakhs was required to clear the mortgage and a further sum of Rs.7 lakhs was required by the applicants for their personal use. As he did not have required funds, he nominated the first respondent, who expressed his desire to buy the suit property for execution of the sale deed. Thereafter, it appears that the first respondent paid a further sum of Rs.27 lakhs to the applicants towards the sale consideration demanded and the applications themselves discharged the mortgage of Rs.20 lakhs with the monies paid by the first respondent. Thus, it is stated that the applicants received a total sum of Rs.57 lakhs from Chandran and Rs.27 lakhs from the first respondent towards the price for the sale of the suit property. The applicants agreed to repay Mr.Chandran and the tenants.
(g) It is stated by the third respondent that after clearing the encumbrance, the applicants were hesitant to hand over the original title deeds to the first respondent and merely raised a dispute regarding the payment to be made to tenants to deliver vacant posession of the suit property. The applicants demanded Rs.1.50 lakhs towards payment for the tenants to vacate the property. The first respondent was refusing to pay stating that it was the duty of the applicants under the sale agreement to settle all liabilities at their cost. Through Mr.A.Chandran, the earlier agreement holder, the first respondent approached the third respondent since he had good relationship with the applicants and had given huge sums of money, which were returned back subsequently and the third respondent was called upon to mediate and resolve the differences.
(h) It is further stated that after negotiations, it was mutually agreed between applicants and the first respondent that the third respondent will be holding the title deeds in joint custody along with the second applicant till the money is settled. In the plain and the applications, the applicants totally plead ignorance about the acquaintance with the first respondent the monies paid by him and the mortgage cleared by the monies paid by the first respondent and personal use to which such monies have been put to use.
(i) It is further stated by the third respondent that if the plea of ignorance as averred in the plaint and the applications by the applicants, is allowed, then no commercial transaction would be believed and will be 'fait accompli' to the unscrupulous people like the applicants. It is stated that no loan agreement was executed by the third respondent and the applicants in March 2008 and there was also no occasion for him to receive any interest as alleged in the applications and the applicants did not approach the third respondent as alleged, at any point of time. It is further stated that to the knowledge of the third respondent, the loan payable to the fifth respondent was settled only on payment of Rs.27 lakhs given by the first respondent. It is further reiterated that in the sale agreement dated 31.3.2008, entered into between the brother of the third respondent and the applicants, they have agreed to sell the suit schedule property for Rs.30 lakhs in March 2008, and when that be the factual position, the applicants cannot claim that the suit property is worth about Rs.80 lakhs in July 2008. Hence, for these reasons, the third respondent prays for dismissal of the applications.
9. The applicants have filed reply affidavit, contending as follows:
(a) It is submitted that the applicants are having Cash Credit facility with the fifth respondent-Bank (D5) for their personal bunk business against the immovable properties which have been given as security. The over-draft facility which they applicants were having, had been enhanced from time to time, due to their promptness in repayment. It is evident from going through the letter of the fourth respondent/4th defendant dated 20.3.2008. Alleging that the applicants have exceeded the limit in over-draft facility, the fourth respondent represented that he will arrange for some finance from some private party for some period, and the private loan can be settled by availing of enhanced credit facility from the D5-Bank after 31.3.2008. The applicants having no other option, believed the words of the fourth respondent as he was in believable position.
(b) Having gained confidence, the fourth respondent with the collusion of other respondents/defendants, called upon us to sign some papers and printed formats and took the applicant's signatures in blank papers and stamp papers, stating that those signatures are necessary to complete the formalities to arrange temporary loan from a private party, and also directed the applicants to go to Sub-Registrar's Office and got some documents registered. To the shock and surprise of the applicants, the documents had been registered as a Power of Attorney in the SRO, Periamet, instead of security. The applicants immediately applied for the certified copy of the same, and to the further shock and surprise of the applicants, it is seen that the documents were styled as sale agreement and sale deed in respect of the suit property, registered in SRO, Ashok Nagar. When the applicants contacted 3rd defendant who played vital role in the said fraudulent act, he became evasive and evading. The averment that the third respondent has been called by Mr.Chandran to mediate and resolve the differences, is denied by the applicants. The allegation that the applicants were acquainted with the third respondent even much prior to March, 2008, is also denied by the applicants. The third respondent demanded that if only the applicants pay Rs.60 lakhs to him, he will cancel all those documents. The fourth respondent represented that he will amicably settle all the matters and cancel those documents. But nothing happened as promised by the fourth respondent. There have been attempts to hand over the title deeds pertaining to the suit property to the third respondent by the fourth respondent.
(c) There are contradictory statements made by the respondents/defendants in their respective counter affidavits, with regard to those original title deeds of the suit property. The fourth respondent made a statement that he has released the title deeds to the applicants, but in contra, the other respondents/defendants state that those documents are in joint custody, which clearly proves the mala-fide intention of the respondents/defendants and the collusion and conspiracy among them to grab the suit property. Hence, the applicants have filed the suit and applications for permanent injunction and interim injunction respectively, as stated supra. This Court granted interim order of injunction as prayed for in the applications.
(d) It is further stated by the applicants that in the counter affidavits filed by the respondents, in the above applications, there were reference to some new documents, which are not known to the applicants/plaintiffs. It is further stated that in the counter affidavits, there was a reference to an alleged agreement of sale, said to be dated 31.3.2008, in favour of one Mr.A.Chandran, who is unknown to us, and who has been referred as the brother of the third respondent/3rd defendant. There was also a reference about the letter said to be dated 31.3.2008, as if the applicants have made request to the fourth respondent to release the title deeds pertaining to the suit property, to the above named Chandran. There was also a reference about an alleged declaration said to be dated 31.3.2008 as if the applicants have given declaration requesting the fifth respondent/D5 Bank to release the title deeds and as if the applicants assured that they would not cancel the Power of Attorney. There was also a reference in the counter affidavits about the alleged agreement of sale said to be dated 27.9.2008 between the said Mr.Chandran and the first respondent/D1.
(e) Disputing the genuineness, execution and truth, the applications sought for inspection of those documents, and when inspected on 4.7.2009 in the Office of the counsel for the first respondent, in the presence of the second and third respondents, and those documents were brought by respondents 2 and 3/defendants 2 and 3 and the first respondent/1st defendant did not come and a minutes have been recorded during the inspection of the above referred documents and the same was also duly signed by the parties appeared and the advocates.
(f) It is submitted further by the applicants that all the above referred documents have been created by the third respondent acting in collusion with the other respondents only with an intention to grab the property and with an intention of grabing more money from the applicants. The applicants never intended to execute those documents. The applicant's signatures have been misused and those documents contain intrinsic evidence to show that they have been fabricated making use of the applicant's signatures in blank. It is stated that the respondents/defendants acted in collusion and conspiracy with each other and played fraud upon the applicants. The so-called documents are stated by the applicants to be false and fabricated and they were not aware either the character or the contents of the same. There was also a threat by the respondents in creating those documents, and the respondents were attempting to forcibly dispossess the applicants high-handedly inspite of interim order of this Court.
(g) It is further stated by the applicants that the fourth respondent/4th defendant got the applicant's signatures without disclosing the nature and character and by gross misrepresentation that it was only for security. It is stated by the applicants that those documents were now said to be claimed as Power of Attorney, agreement, declaration, etc.
(h) In the counter affidavit of the fourth respondent, he has stated that he has adjusted a sum of Rs.7,59,883.40 from one of the applicant's family friend to bring down the overdrawn cash credit limit from Rs.1 crore 5 lakhs, to Rs.75 lakhs. The applicants never requested the fourth respondent to do so and there is no such family friend as stated by the fourth respondent. On the applicant's enquiry with Bank people, the applicants came to know that the person from whom account, the money was transferred, without his permission, has issued a legal notice dated 10.12.2008, to the fourth respondent, claiming damages of Rs.80 lakhs.
(i) It is further stated by the applicants that the documents styled as sale agreement said to be dated 31.3.2008, is an unregistered one and those documents are said to have been attested by one Mr.K.J.S.Prem Kumar, Advocate and Notary Public as if the applicants appeared and executed them. It is contended by the applicants that they neither appeared before the said Advocate and Notary Public at any point of time, nor executed any documents as alleged. It is necessary to produce the notarial register maintained by the Advocate, to arrive at justice to ascertain whether the applicants appeared and executed those documents. It is indicated by the applicants that as per law, the Advocate/Notary Public, has to take signatures of the executors in the notarial register if they are not known to him personally and the executors have to be identified by an advocate in writing, and there should be a reasonable enquiry regarding identification. Hence, the applicants seek for production of the notarial register for better appreciation of the case and for the appearance of the said Advocate/Notary, before this Court.
(j) It is further contended by the applicants that the stamp papers in which the alleged agreement of sale is said to be dated 31.3.2008 and declaration has been taken print in both those papers, have been purchased from a same stamp vendor. In both these documents referred, there are insertions in writing and erases, to utilise the blank signatures which had been got even prior to the taking of prints. There is abnormal gap between the signatures and the contents. Hearing of the witnesses and the persons before whom it was allegedly executed, is necessary to ascertain the genuineness of the documents. In both the documents, a same person, named Mr.V.Selva Kumar, signed as witness and in the alleged declaration, dated 31.3.2008, there is signature in between the contents in the schedule of property.
(k) To the surprise and shock of the applicants, it is stated that at the time of inspection of those documents, the applicants were able to see original of the alleged letter requesting to hand over the title deeds pertaining to suit property, said to have been written by the applicants to the fourth respondent. If it is really written to the fourth respondent as alleged, it cannot be in the hands of the other respondents. It is stated by the applicants that this itself is sufficient to prove the collusion and conspiracy among the respondents. The genuineness, truthfulness and validity of those documents are disputed by the applicants.
(l) Admittedly, as stated by the applicants, they are in possession of the suit property and the respondents/defendants are planning to create further documents to further encumber the property, with a mala-fide intention of bringing the applicants to their terms and hence, the applicants state that they have filed the above applications to safeguard the property and their possession and pray for making absolute the interim order already granted by this Court, by considering the prima-facie case and the balance of convenience in their favour and allow the applications.
10. The fourth respondent, in his rejoinder affidavit to the reply affidavit filed by the applicants, has stated as follows:
(a) Inter-alia the fourth respondent stated that for most of the period, the account of the applicants is above the limit sanctioned by the Punjab National Bank, as evident from the statement of accounts and that the fourth respondent had been repeatedly advising the applicants to regularise the accounts to avoid adverse reports from the Bank's statutory auditors appointed by the RBI immediately after annual closing, but these advises went in vain. The letter dated 20.3.2008 is the standard letter issued by the fourth respondent's Bank to the borrowers to regularise the accounts which are irregular, before annual closing and if the borrower wants for enhancement or renewal, the concerned borrower had been advised to approach the Bank at a later date and this can never be considered as an offer letter or conduct certificate of the account.
(b) It is further stated that the applicants admitted that they settled the accounts out of compromise with several Banks, which clearly shows that they had been settling the accounts only after negotiating with the said Banks after availing concession. The allegation of the applicants that the fourth respondent received the blank papers from the applicants and misused the same for oblique purpose, is denied. It is further stated by the fourth respondent that he has been rendering unblemished service for more than three decades to the utmost satisfaction of his employer and at no point of time, any adverse remarks or allegation came from any quarters, in respect of the fourth respondent. The fourth respondent states that the allegations of the applications are nothing but cock and bull story invented for the purpose of the case. The applicants being Doctorate/Graduate and well versed in business for three decades, is unbelievable to have signed the blank papers, that too on stamped documents and executed documents at the Sub-Registrar's Office without knowing the contents.
(c) It is stated by the fourth respondent further that the applicants have executed the alleged letter only before the Notary Public and not before the fourth respondent. It is indicated by the fourth respondent that he is not a party to the private transaction between the applicants and the other respondents. There is no occasion or reason for the fourth respondent to take any signatures from the applicants in blank papers.
(d) It is further contended by the fourth respondent that he released the original title deeds to the second applicant who signed the Registers of the Bank for having acknowledged the original title deeds of the suit property. The fourth respondent deny the allegation that the applicants are not aware of the family friend who only transferred the funds to the applicants' account to adjust the loan account. The staff of the applicants, by name Mr.Dinesh only signed as introducer for opening the account of the said family friend and the said family friend signed the vouchers on that day itself, which confirms that at the instructions of the applicants only, the amount had been transferred to adjust the account. The alleged legal notice issued is presumably at the instance of the applicants for the best reasons known to them. Hence, for these reasons, the fourth respondent pray for dismissal of the applications, as the applicants have not come before Court with clean hands and suppressed many material facts.
11. Heard Mr.T.V.Ramanujam, learned Senior Counsel appearing for Mr.T.Krishnamachari, learned counsel for the applicants and Mr.Prakash Goklaney, learned counsel for the 1st respondent and Mrs.Chitra Sampath learned counsel for the 3rd respondent and Mr.M.L.Ganesh, learned counsel for the respondents 4 and 5. No appearance for the 2nd respondent.
12. The learned Senior Counsel for the applicants would submit in his argument that the suit has been filed by the applicants/plaintiffs for the relief sought for in the plaint and also for permanent injunction against the defendants 1 to 4. He would further submit that the suit property is situated in K.K.Nagar measuring 880 sq.ft. as described in the plaint, that the property was originally belonged to the father of the 2nd plaintiff and after his death, the suit property devolved upon the 2nd plaintiff. The plaintiffs are in possession and enjoyment of the suit property through their tenants and they are collecting rents from the said tenant. He would further submit that at the time of filing the suit an ad-interim injunction has been granted by this Court restraining the defendants 1 to 4 from in any way disturbing the possession and enjoyment of the suit property of the plaintiffs and also restraining the defendants 1 to 4 in any way alienating the suit property to any other 3rd parties and the defendants 1 to 4 from operating the bank account of the plaintiff as referred in the said petition. He would also submit that the said ad-interim injunction granted by this Court was extended until further orders, after ascertaining the 'prima facie' case in favour of the applicants/plaintiffs. He would further submit in his argument the suit has been filed by the plaintiffs (applicants) against the defendants that the defendants 1 to 4 have colluded together and played fraud upon the applicants in creating certain documents as if the plaintiffs have executed them in the course of the transactions, had by the plaintiffs with the 5th defendant bank wherein, the 4th defendant was working as a manager. He would also submit that the cash credit account to the tune of Rs.75,00,000/- had by the plaintiffs in the 5th defendant bank was handled by the plaintiffs for that the original sale deeds of the suit property as well, yet another house property belonging to the 1st plaintiff in kottur gardens were deposited as security and in the said cash credit account, the plaintiffs were dealing with for the purpose of their petrol bunk business. He would also submit that the plaintiffs who had tied up with the Indian Oil Corporation used to collect the cheques issued by the Indian Oil Corporation through the 5th defendant bank and the 4th defendant as bank Manager, slowly gained confidence with the plaintiff and they also transacted through the 4th defendant for handling of the cash credit account. He would also submit that the said properties given under security namely, the suit property worth Rs.80,00,000/- and the kottur gardens property was worth Rs.3 crores, at the time of the said transactions. He would further submit in his argument that the 4th defendant with active collusion and instructions from 3rd defendant, instructed the applicants to give further security for the cash credit facility to raise the level of Rs.1,05,00,000/- and for that, the defendants 3 and 4 gave assurance to the plaintiff, that the 3rd defendant would furnish advance money for that and it could be settled and the security papers will be returned to the plaintiffs in a period of one or two months and the cash credit limit will be increased before May 2008. He would further submit that believing the words of the 4th defendant, the plaintiff gave some signed blank cheques dated 31.03.2008, on the faith had in 4th defendant. Even though the said cash credit facility was promised to be raised it was not done so, but the plaintiff had to pay an exorbitant interest for Rs.1,05,000/- per month. However, the 4th defendant had subsequently informed the plaintiffs that the head office of the 5th defendant had instructed to close Rs.75,00,000/- cash credit facility and to sanction new cash credit facility for Rs.1,05,00,000/- and in the meanwhile, the plaintiffs were suggested by 4th defendant to approach some other banks to get loan for the closure of cash credit facility by paying Rs.75,00,000/-. He would further submit that the said words of 4th defendant was believed and the plaintiffs approached City Union Bank, Mandaveli Branch and got the cash credit facility for Rs.75,00,000/- and for that, the security to be produced without obtaining the sale deed of Kottur Gardens and they have also deposited the said documents therein and got money and paid the same to the 5th defendant bank and cleared the said cash credit facility. He would further submit that however, the title deed of the suit property was retained by the 4th defendant at the instruction of the 3rd defendant for the loan obtained by the plaintiff at Rs.30,00,000/-, on 31.03.2008. He would further submit in his argument that when the 4th defendant was approached by the plaintiff for the return of the title deed, he said that he would talk to 3rd defendant and the 3rd defendant along with the 2nd defendant started coming to the petrol bunk of the plaintiff and therefore, the plaintiff told them about the arrangement done by the 4th defendant, would be sorted out by the discussion and during the discussion, it was suggested by the 4th defendant to keep the title deed in a safety locker in the 5th defendant's branch and each of them can have a key and it could be opened by both the persons and as per the instruction, a locker in the name of the plaintiff and the 3rd defendant in the branch of 4th defendant and the title deed were kept in locker on the hope that the matter would be settled by the 3rd defendant shortly. He would further submit that the 4th defendant instead of crediting the cheque given by the plaintiffs for Rs.20,00,000/- to the account of the 3rd defendant, credited the said money in the current account and adjusted and closed the over draft facility. Apart from taking another sum of Rs.7,50,000/- belonging to the plaintiff for such course. He would further submit that when the plaintiffs asked the 4th defendant about the indifference he had strangely acting in a manner and instructed the plaintiff to pay and clear the loan of the 3rd defendant. However, when the 3rd defendant was approached he had demanded a sum of Rs.60,00,000/- for the loan of Rs.30,00,000/- given to the plaintiffs on 31.03.2008 to which, the plaintiffs are not willing. He would further submit that the 3rd defendant threatened the plaintiffs to dispose the suit property by taking the law in their hands. He would further submit that in the meantime, the plaintiffs came across that some documents have been registered at the Sub-Registrar Office at Periyamet by the plaintiff through the real estate brokers and on verification of the said documents, the plaintiff came across yet another document styled as sale agreement and another sale deed was executed on the conspiracy and a fraud was committed by the defendants, the suit property is stated to have been sold. He would further submit that the plaintiff never executed any power of attorney in favour of the 2nd defendant to sell the property to the 1st defendant. The 2nd defendant, being an employee under the 3rd defendant and all the defendants 1 to 4 have committed fraud, so as to deprive the right, title of the plaintiffs in the suit property on the foot of the signatures put by the plaintiffs with the 4th defendant which was obtained by the 4th defendant by mis-representation that they would be utilised as security to the loan given by the 3rd defendant. He would further submit that the said act of fraud is committed by the defendants 1 to 4 could be fully established only in a full fledged trial but the facts and circumstances and other documents would go to show a prima-facie case at this stage. He would further submit that the plaintiffs are owning the property at Kottur Gardens, which is worth more than Rs.3 crores and yet another property at Anna Nagar and they have no reason to sell the suit property belonging to them for a smaller sum of Rs.30 lakhs. He would further submit that the said property was worth more than Rs.80,00,000/- , at the time of the said transaction and therefore, there would not be any execution of power deed and a further sale agreement and the sale deed stated to have been executed by all and the power agent of the plaintiffs would not in any way show the transaction as true and genuine. He would further submit that the plaintiffs are in possession of the suit properties, through their tenants and if the possession of the plaintiff is likely to be disturbed by the defendants 1 to 4 and the right of the plaintiffs would be jeo-paradised, in the event they are granted with a decree after a full fledged trial.
13. Similarly, if for any reason, the defendants are proceeded with the sale or any alienation of the suit property with 3rd parties, on the foot of the questioned documents of sale deed, sale agreement and the power of attorney, the right of 3rd party would also intervene and it would certainly complicate the issue in the event of the plaintiff for succeeding the suit. If the ad-interim injunction already granted by this Court is not made absolute and no order of injunction has been granted in favour of the plaintiffs, they would be put to irreparable loss and it cannot be compensated by way of awarding of damages. He would also submit that when the strong allegations have been made against the 4th defendant, the Manager of the 5th defendant in respect of the fraudulent transactions averred in the plaint and if the 4th defendant is permitted to handle with the accounts of the plaintiffs in the 5th defendant branch there is a likelihood of further tampering of the account entries. Therefore, the 4th defendant may be injuncted from operating the accounts of the plaintiffs in the 5th defendant branch.
14. He would also referred to a judgment of this Court reported in 1999 (2) MLJ 666 (Thirumalai Vadivu Ammal and others v. Muthammal and another) for the principle that the burden of proof that the plaintiff signed document only after knowing the contents when the contents were denied by the plaintiff, is lying on the defendant. He would also submit in his argument that the evidence regarding the validity and registration of the said document are also to be proved by adducing necessary evidence through the examination of the registrar concerned and it cannot be decided at an interlocutory stage. He would also draw the attention of the Court to a judgment of this Court reported in AIR 1934 Madras 113 (Ramaswami v. Srinivasa) for the said principle. He would also submit in his argument that when the Court is drawing presumption under Section 85 of the Evidence Act equal weight has to be given to the parties who are relying upon the document and taking of the document as not a genuine one, when there is a slightest doubt regarding the genuineness of the document. In support of his argument, he would cite a judgment of Bombay High Court reported in AIR 1979 Bombay 202 (Mohanshet Purushottam Gujar v. Mrs.Jayashri Vasantrao Mahagaonkar). Quoting the aforesaid judgment, he would insist in his argument that the fraudulent nature of those documents could be fully established only at the time of adducing evidence.
15. He would further submit that the defendants 1 to 4 will not be put into any prejudice in the event of grant of injunction against them and the balance of convenience is also in favour of the applicants/plaintiffs and in favour of granting temporary injunction. Therefore, he would request the Court to order temporary injunction in all the applications by making the ad interim injunction already ordered as absolute.
16. The learned counsel for the 1st respondent would submit in his argument that the 1st plaintiff was a psychiatric Doctor and he is a well educated man and it is strange to put a story that he had put signatures at the instruction of the 4th defendant only for the purpose of furnishing security even before the Sub-Registrar is not believable. He would further submit that the plaintiffs have received the money towards the consideration of the said transaction to the tune of Rs.57,00,000/- and they have also been squatting upon the properties and are receiving the rent payable to the said property. He would further submit in his argument that the applicants/plaintiffs have not come to Court with clean hands since they suppressed the facts. He would further submit that the plaintiff had entered into a sale agreement with one Chandran, who is the brother of the 3rd defendant and he is also a necessary party to the proceedings. He would further submit that nothing was stated about the sale agreement executed by the applicants in favour of the said Chandran. Apart from that a sum of Rs.30,00,000/- and Rs.27,00,000/- were shown as consideration paid to the plaintiff and even after receiving the said consideration they want to continue the possession of the suit property somehow or other. The plaintiffs are not entitled to any injunction against the true owners. He would further submit in his argument that the execution of the sale deed, has been questioned in this suit and the transaction would be valid and the purchasers under the questioned sale deed would be the owners of the said property till it is set aside. He would also submit in his argument that the plaintiffs have contradicted regarding the sale consideration mentioned in a sale deed dated 24.10.2008. The cheques issued to the 2nd plaintiff was credited to the account of the plaintiffs and therefore, there would be no doubt regarding the execution of the sale deed by the plaintiffs through the power agent. He would further submit that when the money referred as consideration in the sale deed has been appropriated by the plaintiffs, the entire case of the plaintiffs would be nullified and there could not be any case of fraud as stated by the plaintiff. He would further submit that the applicants/plaintiffs have no prima-facie case to get the order of interim injunction before this Court. He would also submit in his argument that the reasons given by the plaintiff to act in accordance with the instruction and direction of the 4th defendant could not be believed since there was no valid reason stated by the plaintiffs for obeying the directions of the 4th defendant. The mere collection of the cheques obtained from Indian Oil Corporation quickly for the benefits of the plaintiffs would not be the reason for the plaintiffs to obey the directions of the 4th defendant. He would further submit that the plaintiffs have come to Court suppressing the facts regarding sale agreement with one Chandran, in respect of the suit property and this would falsify that there is no intention for the plaintiffs to sell away the suit property can be nullified and therefore, the claim of the plaintiffs for discretionary relief of injunction cannot be granted to the plaintiffs. He would also quote a judgment of the Hon'ble Apex Court reported in (2006) 5 SCC 282 (Seema Arshad Zaheer and others) v. Municipal Corporation of Greater Mumbai and others) for the principle that no injunction could be granted when no material is placed for the grant of temporary injunction. He would also cite a judgment of the Hon'ble Apex Court reported in (1994) 1 SCC 1 (S.P.Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead) by LRs and others) for the principle that the plaintiff has come to Court with true case and to prove the case with true evidence. He would also cite a judgment of this Court reported in AIR 1994 Madras 247 (K.Kanakarathnam v. A.Perumal and another) for the principle that the plaintiff who come to Court for a relief should disclose the essential material facts. He would further submit that the claim of the plaintiffs to set aside the sale agreement, sale deed and the power of attorney were not supported by any legal principles nor a prima-facie case. There would not be any irreparable loss in the event, the Court is not granting temporary injunction in favour of the applicants. He would therefore request the Court to dismiss the applications and to vacate the ad interim injunction granted in favour of the applicants/plaintiffs.
17. The learned counsel for the 3rd defendant would submit in her arguments that the 3rd defendant never advanced any money to the tune of Rs.30,00,000/- either to the plaintiffs or to the 4th defendant. She would further submit that no document has been produced to establish a prima facie case that the money from the account of 3rd defendant came to the credit of the plaintiff's account as alleged in the plaint. She would further submit that the said case of the plaintiffs if any could be established only by adducing evidence. She would also submit that at this stage, there is no prima facie case made out and in the absence of any prima facie case, no injunction can be granted in favour of the applicants. She would also submit that the execution of the document namely power of attorney was admitted but it was averred that some fraud has been committed in presenting the document as security instead of power of attorney. She would therefore submit that unless oral evidence is adduced even the prima facie case of the plaintiff cannot be established and the plea of fraud can be established only through evidence and not at this interlocutory stage. She would also submit that the transactions had by the parties are only through the issuance of cheques and the plaintiffs did not deny the receipt of the consideration as mentioned in the document. She would also submit that no explanation has been offered by the plaintiffs regarding consideration received by them. Even otherwise, the power of attorney issued are not either cancelled or revoked by the plaintiffs. She would also submit that the title would vest with the purchaser unless the contrary is proved by the plaintiffs in the suit. Therefore, she would argue that there would be no prima facie case for the plaintiff for continuing the injunction order obtained by them. She would also submit that the suit has been filed belatedly and the discretionary relief of granting injunction need not be extended to the plaintiff. The plaintiff is admittedly not in actual possession of the properties and the tenants are in occupation. Therefore, the grant of injunction in respect of the possession of the plaintiffs would not arise. Therefore, she would request the Court that the ad interim injunction granted need not be extended and the applications may be dismissed and the ad interim injunction in force may be vacated.
18. The learned counsel for the respondents 4 and 5 would submit in his argument that the reasons stated by the plaintiffs in the applications as well as in the plaint are not true. He would further submit that the 4th defendant acted in good faith and in accordance with law while he was working as the branch manager of the 5th defendant. He would further submit that if really, the 4th defendant indulged in cheating the plaintiffs or committed any fraud against them, the plaintiffs could have given a complaint to Police. He would further submit that the suit properties were already in attachment by 3rd parties and therefore the allegations that the plaintiffs were under no need of selling the properties, cannot be true. The endorsements made by the 4th defendant is bonafide and the collection of cheques and crediting, debiting and transfer of funds were done by the 4th defendant in the course of banking business done by him and there was no collusion in between 4th defendant and the defendants 1 to 3. He would further submit in his argument that the said power of attorney dated 29.09.2008 was prepared by one counsel and there was no indulgence of the 4th defendant in the said transaction. He would also submit that the 4th defendant has been transferred from the said branch and therefore the grant of interim injunction against the 4th defendant regarding the operation of the accounts of the plaintiffs became infructuous. He would also submit that the 4th defendant is not having any right in the property nor any claim over the suit properties against the plaintiff and therefore, there is no need for granting any injunction in disturbing the possession of the plaintiff nor alienating the suit property cannot be ordered. Therefore, he would submit that an order of ad interim injunction already passed against him against the 4th defendant may be dismissed.
19. I have given anxious thoughts to the arguments advanced on either side.
20. The claim of the applicants/plaintiffs would be that a huge fraud has been committed by the defendants 1 to 4 and thereby a deed styled as power of attorney was created and was registered subsequently with the representation that a security deed has to be executed for the advancement of Rs.30,00,000/- by the 3rd defendant, for the purpose of extending the cash credit facility of the plaintiff with the 5th defendant bank from Rs.75,00,000/- to Rs.1,05,00,000/-. According to the plaintiffs the 4th defendant had obtained certain signatures from the plaintiffs in blank papers for the purpose of giving security to the said loan and had utilised the same for the purpose of bringing power of attorney in favour of the 2nd defendant in respect of the suit property. The suit property is located in K.K.Nagar measuring an extent of 880 sq.ft. There is no dispute that the original owner of the property was the father of the 2nd plaintiff and the 2nd plaintiff as daughter, got the said property from the father through settlement deed executed by her father. The admitted facts are that the suit property along with the property belonging to the 1st plaintiff in Kotur Gardens were given to the 5th defendant bank as security for having the cash credit facility to the tune of Rs.75,00,000/-. The cash credit facility was sought to be extended for Rs.1,05,00,000/- and it is stated to have been advised by the 4th defendant to get advance amount of Rs.30,00,000/- from 3rd defendant and to execute the security deed for that.
21. The case of the plaintiffs that, for the advancement of Rs.30,00,000/-, the 4th defendant got the signatures in various cheques and had also instructed that the documents of security would be registered at Periyamet Sub-Register Office and in the said Office, the plaintiffs have put their signatures believing that the said document was a security deed but it was turned to be a power deed in favour of the 2nd defendant. No doubt, the said document was registered by the Sub-Registrar. Admittedly, the plaintiffs are well educated persons. The presumption as to the registration of any document under Section 85 would be that it is a good document unless it is proved to be a fraudulent one. If it has to be proved as fraudulent document, necessary oral evidence has to be adduced promptly in a full fledged trial. Now, we have to see whether such presumption can be rebutted at this stage, even if a slightest doubt in respect of those documents is pointed for arriving to a prima facie case. According to the plaintiffs, there was no need to sell the property for the smaller sum of Rs.30,00,000/-, when the plaintiffs were already owning the Kotur Gardens property worth about Rs.3 crores and yet another property at Anna Nagar. The allegations made in the plaint was to the effect that the 4th defendant had mis-used his official position and the confidence of the plaintiff who had dealt with the bank through him and had credited so many cheques belonging to the plaintiffs to the cash credit accounts instead of crediting to 3rd defendant's account. Such an extent has been averred in the plaint that a sum of Rs.20,00,000/- was given for discharging the debt obtaining from the 3rd defendant but it was credited by 4th defendant to the cash credit account apart from crediting another sum of Rs.7,50,000/- obtained from other accounts. The complaint levelled against the 4th defendant is so grave that he has credited wrongly and gave credit to some other accounts contrary to the instructions given by the plaintiffs. The said circumstances could be established only on adducing oral evidence regarding the chalans filled up by the plaintiffs for that purpose. It is also very much important to see whether those chalans have been filled up by the plaintiffs or 4th defendant himself. The very accusation against the 4th defendant would show that he had indulged in creating all these documents with the help of the defendants 2 and 3 in favour of the 1st defendant. No doubt, it has been clearly stated by the defendants 2 and 3 that they were very much aware that the plaintiffs approached them for the purpose of selling his property. In the arguments advanced by the learned counsel for the 3rd defendant that the 3rd defendant did not advance any amount to the tune of Rs.30,00,000/- to the plaintiffs, so as to get any security deed from him. However, it has been submitted by the learned counsel for the 1st respondent that the total consideration was Rs.57,00,000/- and the plaintiffs even after receiving the same are in possession of the suit property and are enjoying the rent derived from the said property and also utilising the money as consideration received by them. The consideration shown in the document was only Rs.27,00,000/-. However, it has been argued by the learned counsel for the 1st respondent that a sum of Rs.57,00,000/- has been parted and the said amount has to be deposited in-case, any injunction has been granted or extended. In the said circumstances, the controversies in respect of consideration, regarding the sale should have also been cleared only in a full fledged trial. I could see that the advancement of Rs.30,00,000/- by the 3rd defendant to the plaintiff for enhancing the cash credit facility to the tune of Rs.1,05,00,000/- could also be clarified in the trial only. When the plaintiffs have alleged fraud in execution of the power of attorney, the sale agreement and the sale deed which are challenged in the suit, the circumstances under which the power of attorney executed in favour of the 2nd defendant by the applicants have necessarily be considered and decided only in a full fledged trial. The transactions had by the plaintiffs through the 4th defendant had any connection with the defendants 1 and 2 and the involvement of the 3rd defendant could also been decided only in the trial. The sale agreement dated 29.09.2008 executed by the alleged power of attorney of the plaintiffs even though described in the cause title had not been referred in the body of the sale agreement, admittedly, the said title deed is said to have been kept in locker in the common name of the 3rd defendant and the plaintiff. But, it has been shown in clause-6 that the original title deed is said to have been handed over to the purchaser. Similarly, the cash credit facility was closed by the 5th defendant bank only after the whole money to the tune of Rs.75,00,000/- was deposited after obtaining another cash credit facility with City Union Bank, Mandaveli branch by the plaintiffs and the title deed in respect of the suit property was said to have been kept in the locker at 5th defendant branch in the joint names of the plaintiff and the 3rd defendant. The reason for keeping the said document in the joint locker is also to be explained during the full fledged trial. When the submissions of the 3rd defendant that the 3rd defendant did not advance any money to the tune of Rs.30 lakhs, why it could be kept in the joint locker is a most question. The plaintiffs explanation is that under the instruction given by 4th defendant, the document was kept in a joint locker. Therefore, I could see some doubt in the execution of sale agreement by the so called power agent of the plaintiffs with particulars of handing over the document to the 1st defendant even though the said document is kept in a joint locker. Moreover, the said cash credit facility was not cleared on the date of sale agreement, but in clause-4, the power agent had declared that there was no encumbrance in respect of the said property. All these controversies would show some doubt over the power of attorney, and consequently over the sale agreement and sale deed. In such circumstances, if the 1st defendant or the defendants 1 to 4 are permitted to deal with the property with the 3rd parties and in case, the plaintiffs succeeded in the suit, certainly the 3rd parties' right will intervene and it will lead to or promote multiplicity of proceedings.
22. Similarly, if the plaintiff's possession through the tenants is disturbed then there would be further complications regarding the enjoyment of the suit property.
23. In the said circumstances, the judgment as cited by the learned counsel for the plaintiff reported in AIR 1979 Bombay 202 (Mohanshet Purushottam Gujar v. Mrs.Jayashri Vasantrao Mahagaonkar) is quite relevant. The relevant passage would run as follows:-
"Section 85 contains a presumption, a presumption which may operate in favour of the party relying on a document and to the prejudice of the party alleging that the document is not a genuine one. For the purpose of such presumption to operate the authentication must be clear, specific, more decisive. If there is the slightest doubt, then the Court must be loath to rely on the presumption contained in S.85 and must be equally loth in applying such presumption in favour of the party relying on the document."
24. In the aforesaid judgment, I could see that even if slightest doubt is shown regarding the sale deed, the presumption under Section 85 of the Evidence Act need not be readily taken. In a judgment of this Court reported in AIR 1934 Madras 113 (Ramaswami v. Srinivasa), it has been clearly laid down that the duty of the Registrar was to verify as to the signature of the executor and not regarding the nature of the document. The relevant passage would be as follows:-
"In fact the scheme of the Act appears to be that the Registrar is not to go into questions as to whether the parties understood the nature of the document or meant it to be something else than what it is. The only question which he has to decide in this respect is whether it hears the genuine signature of the alleged executant. In that view it is clear that even on his findings, the learned City Civil Judge should have ordered registration of the document."
25. From the aforesaid judgment, I could see that the presumption of the document before the Registrar would not draw the genuineness of the document by itself and it is for the Court to decide about the nature of the document, only at the time of full fledged trial.
26. Yet another judgment of this Court was cited by the learned counsel for the plaintiff as reported in 1999 (2) MLJ 666 (Thirumalai Vadivu Ammal and others v. Muthammal and another), in support of his case. The relevant passage would be as follows:-
"When the plaintiffs contends that she was executing only a power of attorney and not a settlement, the entire burden is on the defendants to prove that the plaintiff signed the document after knowing the contents."
"When there is absolutely no evidence that the Sub-Registrar read on the contents of the document to be executed and when the executant pleads that she is ignorant about the contents, registration by itself will have no legal validity."
27. In the aforesaid judgment, I could see even that the said principle would apply to the circumstances of this case and the burden is also on the defendant to prove that the plaintiffs had executed only a power deed and not a security deed. When I have seen a prima facie case in favour of the plaintiffs, it has to be cleared by the defendants. Nothing is available on the side of defendants and therefore it is left to be considered in the full fledged trial. Therefore I could see a prima facie case established by the plaintiffs. Now, I have to decide about the balance of convenience for the grant of injunction. No doubt, the plaintiffs are in possession through the tenants and they are receiving the rent. If the plaintiffs' possession is disturbed and in case the plaintiffs have succeeded in the suit, certainly, it would cause much inconvenience and loss to the plaintiffs which cannot be compensated. Similarly, if the defendants 1 to 4 are not restrained by an order of injunction from alienating the suit properties, there would be further interference of rights of 3rd parties. The arguments advanced by the learned counsel for the 1st respondent that the plaintiffs have suppressed the facts regarding the agreement entered into between the plaintiffs and one Chandran was not relevant to the transaction alleged by the plaintiffs. Even otherwise, the nexus in between such agreement and the transaction could be seen only in the trial. Therefore, the judgment of the Hon'ble Apex Court reported in (1994) 1 SCC 1 (S.P.Chengalvaraya Naidu (Dead) by LRs v. Jagannath (Dead) by LRs and others) is not applicable to the facts and circumstances of this case. Similarly, another judgment of the Hon'ble Apex Court reported in (2006) 5 SCC 282 (Seema Arshad Zaheer and others) v. Municipal Corporation of Greater Mumbai and others) as cited by the defendant is also not applicable to the present case since a prima facie case has been found in this case where no material has been produced for the grant of temporary injunction in the case dealt in the said judgment.
28. Therefore, I could see that the balance of convenience is only in favour of granting temporary injunction. In case of granting temporary injunction against the defendants 1 to 4, from interfering with the possession of the plaintiffs as well as from alienating the suit properties, the defendants would not be prejudiced. The only difficulty which was expressed by the learned counsel for the 1st defendant would be that the plaintiffs have received the consideration and also squatting upon the property and are enjoying the property for no fault of the 1st defendant. The said inconvenience could be corrected by an order, directing the plaintiffs to deposit the rents paid by the tenants in respect of the suit property from the date of the sale deed (i.e) 24.10.2008 till this date and also to deposit the future rent payable to the demised premises after meeting the expenditures in respect of the suit property towards payment of property tax, water tax and after attending to the repair works. The plaintiffs should deposit the said money with accounts within a period of one month from the date of receipt of a copy of this order. Therefore, I am of the considered view that the ad interim injunction already granted by this Court in all the three applications are to be made absolute subject to compliance of the above referred direction. As regards, the ad interim injunction granted against the 4th defendant in O.A.No.1317 of 2008, it was argued that it has become infructuous, since the 4th defendant was transferred from the said branch. Merely because, the 4th defendant was transferred, it would not become infructuous, since the 4th defendant, if again posted, could interfere in the accounts or as an inspecting officer of the main branch. Therefore, the injunction order passed against the 4th defendant need not be modified or withdrawn, as infructuous. Therefore, I am of the considered view that the ad interim injunction granted against the 4th defendant in O.A.No.1317/2008 is also liable to be made absolute.
29. In fine, the ad-interim injunction ordered by this Court is made absolute with the condition imposed on the applicants to deposit the rent after deducting the expenditure within the time limit as directed above. Accordingly, all the three applications are ordered. No costs.
.06.2012 Index: Yes / No Internet : Yes / No ssn V.PERIYA KARUPPIAH, J., ssn O.A.Nos.1315 to 1317 of 2008 in C.S.No.1175 of 2008 19.06.2012