IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 08.06.2010
Coram
THE HONOURABLE MR.JUSTICE M. VENUGOPAL
A.S No.661 of 2001
M/s.Gandhimathi Corporation,
A Regd. Partnership firm at
Arulagam, Cutchery Street,
Tiruchegodu Town and Taluk,
Salem District,
Represented by its partner
C. Chellammai. ... Appellant/Plaintiff
vs.
1.Pachamuthu (Deceased)
2.Tmt.Palaniammal
3.Pitchakannu
4.Mr.P.Srinivasan
(R2 and R3 recorded and R4 brought on record as
L.Rs. Of the deceased R1) ... Respondents/Defendants
Appeal filed under Section 96 of the Code of Civil Procedure against the Judgment and decree dated 31.7.2000 passed in O.S.No.116 of 1997 on the file of the Subordinate Judge, Attur.
For Appellant : Mr.G.R.M.Palaniappan
For Respondents
2 to 4 : Mr.N.Thiyagarajan
JUDGMENT
The Appellant/Plaintiff has preferred this appeal as against the Judgment dated 31.7.2000 in O.S.No.116 of 1997 passed by the Learned Subordinate Judge, Attur, Salem District.
2. The Learned Subordinate Judge, Attur in his judgment dated 31.7.2000 in O.S.No.116 of 1997 has among other things observed that
a) the Appellant/Plaintiff has not proved that Ex.A.2, Pro-note dated 20.5.1988 has been supported by valuable consideration;
b) on 21.5.1988, the first respondent/first defendant and the third respondent/third defendant have not deposited the property title deeds with an intention to create an Equitable Mortgage;
c) the Appellant/Plaintiff is not entitled to claim the interest of Rs.2/- p.m for Rs.100/- as prayed for by him;
d) the suit filed by the Appellant/Plaintiff is barred by Limitation holding that the Appellant/Plaintiff is not entitled claim amount with costs and
e)Ex.A.5, Memorandum of Deposit of Title Deeds dated 23.5.1988 has not been registered and therefore the same is not accepted and resultantly, dismissed the suit.
3. Dissatisfied with the Judgment dated 31.7.2000 in O.S.No.116 of 1997 passed by the Learned Subordinate Judge, Attur, the Appellant/Plaintiff has projected this appeal before this Court.
4. The Trial Court in all framed eight issues and two additional issues. On the side of the Appellant/Plaintiff, P.Ws.1 to 4 were examined and Exs.A.1 to A.11 were marked. On the side of the Respondents/Defendants, D.W.1 (first Defendant) was examined and no documents were marked.
5. The points that arises for rumination in this Appeal are:
a) Whether the deceased First Respondent/First Defendant, the Second and Third Respondents/Second and Third Defendants have borrowed a sum of Rs.2 lakhs from the Appellant/Plaintiff on 20.5.1988 and executed Ex.A.2 suit Pro-note?
b) Whether the deceased First Respondent/First Defendant and the Third Respondent/Third Defendant on 23.5.1988 have executed in favour of the Appellant/Plaintiff Ex.A.5 Memorandum dated 23.5.1988 by confirming the Deposit of Title Deeds with an intention to create an Equitable Mortgage at Tiruchengodu?
c) Whether Ex.A.5 Memorandum of Deposit of Title Deeds dated 23.5.1988 requires to be registered under Section 17 of the Indian Registration Act?
d) Whether the Appellant/Plaintiff is entitled to obtain a Preliminary Decree against the deceased First Respondent/First Defendant, the Second and Third Respondents/Second and Third Defendants and the Fourth Respondent (L.R. Of the First Respondent) by directing them to pay a sum of Rs.3,94,266/- with subsequent interest at 24% p.a till realisation with costs?
FINDINGS ON POINT Nos.1 to 4:
6. According to the Learned counsel for the Appellant/Plaintiff, the Trial Court’s Judgment in O.S.No.116 of 1997 dated 31.7.2000 is unsustainable both on facts and in law and further that the trial Court has ignored a vital fact that the suit has been filed by the Appellant/Plaintiff for enforcing the Mortgage by Deposit of Title Deeds.
7. It is the further contention on the side of the Appellant/Plaintiff that Ex.A.5, Memorandum of Deposit of Title Deeds dated 23.5.1988 is not required to be registered as per Section 17 of the Indian Registration Act, inasmuch as it relates only to the past transaction and in this regard, the contra view taken by the trial Court is not correct
8. Continuing further, the learned counsel for the Appellant/Plaintiff submits that the Trial Court has failed to take note of the fact that the payment of Rs.2 Lakhs has been made through Indian Bank Account Payee cheque to the Respondents 1 to 3/Defendants and on 20.5.1988 Ex.A.2 Pro-note dated 20.5.1988 has been executed by the Respondents 1 to 3/Defendants, ignoring the evidence of P.Ws.1 to 4.
9. Also, a plea is taken on the side of the Appellant/Plaintiff that the Respondents 1 to 3/Defendants have admitted their signatures and put their Left Thumb Impressions in Ex.A.2 Pro-note and hence, it is for the Respondents 1 to 3/Defendants to establish that the suit Pro-note Ex.A.2 has not been supported by consideration, but this aspect of the matter has not been adverted to by the trial Court in a proper perspective.
10. Expatiating his arguments, the Learned counsel for the Appellant/Plaintiff contends that even in Ex.A.2 Pro-note dated 20.5.1988, the delivery of cheque to the Respondents 1 to 3/Defendants has been mentioned by quoting the number of the Indian Bank cheque, which has been confirmed in Ex.A.5, Memorandum of Deposit of Title Deeds dated 23.5.1988 furnished by the Respondents 1 to 3/Defendants and unfortunately, the Trial Court has failed to appreciate the same in a real perspective which has resulted in miscarriage of Justice.
11. Lastly, on the side of the Appellant/Plaintiff, a contention is raised to the effect that the Trial Court has wrongly rejected the Mail Transfer Entries found in the Appellant/Plaintiff’s Passbook Ex.A.10 and in any event, the dismissal of Mortgage suit filed by the Appellant/Plaintiff on the ground of limitation per se is not correct in the eye of law and further, he prays for allowing the appeal in furtherance of substantial cause of justice.
12. Per contra, the Learned counsel for the Respondents 2 to 4 has supported the Judgment of the Trial Court and submitted that since the trial Court has taken note of relevant aspects of the matter in dismissing the suit filed by the Appellant/Plaintiff and the same need not be disturbed by this Court sitting in Appeal.
13. The Learned counsel for the Appellant/Plaintiff contends that the Respondents 1 to 3/Defendants on 20.5.1988 have borrowed a sum of Rs.2 Lakhs from the Appellant/Plaintiff and promised to repay the said sum with interest at Rs.2/- p.m. for Rs.100/-, on demand either to the Appellant/Plaintiff or its order and executed Ex.A.2, Suit Pro-note and further, on 21.5.1988, the Respondents 1 to 3/ Defendants have deposited the Title Deeds with the Appellant/Plaintiff at Tiruchengodu with an intention to create an Equitable Mortgage by means of Deposit of Title Deeds and created an Equitable Mortgage on 23.5.1988. The Respondents 1 to 3/Defendants have executed Ex.A.5, Memorandum of Deposit of Title Deed dated 23.5.1988 in favour of the Appellant/Defendant by confirming Deposit of Title Deeds with an intention to create an Equitable Mortgage.
14. Added further, it is the contention of the Appellant/Plaintiff that the Respondents 1 to3/Defendants have paid interest up to 19.12.1988 and on 10.6.1989, they have paid three months interest for the period from 20.9.1988 to 19.12.1988 which has been endorsed on the back side of Ex.A.2, Pro-note and further, the Appellant/Plaintiff is entitled to seek the relief of Preliminary Decree being passed against the Respondents 1 to 3/Defendants by directing them to pay a sum of Rs.3,94,266/- together with subsequent interest at 24% p.a. till realisation with costs, etc.
15. In the written statement filed by the first respondent/first defendant (adopted by the 2nd and 3rd respondents/defendants), it is mentioned that the averment made in paragraph 4 of the plaint that the Defendants 1 and 3 deposited the Title Deeds at Thiruchengodu with an intention of creating a mortgage by Deposit of Title Deeds is not correct and further, it is not correct to state that the Defendants 1 and 3 executed the Memorandum to confirm the Deposit of Title Deeds and also that the first Defendant has not paid any interest either on 19.12.1988 and or 10.6.1989. Also, the first Respondent/first Defendant in his written statement stated that the averment that on receipt of notice, the Respondents 1 to 3/the Defendants paid a sum of Rs.20,000/- is not correct and in fact, one E.S.Ramasamy Udayar of Attur, who is the maternal uncle of the first Defendant, has taken away the Title Deeds of this defendant for some reference and later, the said Ramasamy Udayar brought some papers both stamped and unstamped and requested him and others to sign on those papers and since the said Ramasamy Udayar is the maternal uncle and also his sister’s husband, the defendants without questioning Ramasamy Udayar signed in those papers with all good faith and indeed, the Defendants never received any sum from the Appellant/Plaintiff and that the suit is not supported by consideration and there is no cause of action for filing of the suit.
16. Ex.A.1 is the copy of the Registration Certificate dated 26.3.1985 in respect of the Appellant/Plaintiff’s Firm. Ex.A.2 is the Pro-note dated 20.5.1988 for Rs.Two lakhs executed by the Respondents 1 to 3/Defendants in favour of the Appellant/Plaintiff. A perusal of Ex.A.2 Pro-note dated 20.5.1988 indicates that for the purpose of Family Expenses and Business, the Respondents 1 to 3/Defendants have received a sum of Rs.Two lakhs by means of Indian Bank Cheque bearing No.85/Y1-694737 dated 20.5.1988 in the name of the first Respondent/first Defendant and the interest agreed to be paid at Rs.2/- p.m. for Rs.100/-.
17. In Ex.A.2. Pro-note dated 20.5.1988 over the revenue stamp the signatures of first and third respondents/defendants dated 20.5.1988 are found in Tamil. However, over the revenue stamp in Ex.A.2 Pro-note, the second Respondent/second Defendant’s Thumb Impression is mentioned. Significantly, in Ex.A.2 Pro-note, Right Hand Side Top, the left Thumb Impressions of the Respondents 1 to 3/Defendants have been obtained in Tamil.
18. Moreover, on the Back Side of Ex.A.2 Pro-note dated 20.5.1988, an endorsement is made by the Respondents 1 to 3/Defendants to the effect that on 10.6.1989, for the period from 20.9.1988 to 19.12.1988, they have paid a sum of Rs.12,000/- in cash towards interest. Also, the Respondents 1 to 3/Defendants in Ex.A.8 dated 9.11.1989 have reportedly paid a sum of Rs.20,000/- towards five months’ interest. Interestingly, in Ex.A.6 and Ex.A.8, endorsements (on the back side of Ex.A.2, Pro-note) the name of the persons who have written the said endorsements is mentioned. Ex.A.9 is the Counter Foil of the Indian Bank bearing No.85/Y1-694737 in the name of the first Respondent/first Defendant dated 20.5.1988 for Rs.2 Lakhs and on the back side of the Counter Foil, the signature of the first Respondent/first Defendant is seen.
19. The partner of the Appellant/Plaintiff’s Firm has been examined before the Trial Court as P.W.1. In his evidence, he has stated that the Respondents 1 to 3/Defendants on 20.5.1988 have borrowed a sum of Rs.2 Lakhs from the Appellant/Plaintiff’s Firm and executed Ex.A.2, Pro-note dated 20.05.1988 evidencing a sum of Rs.2,00,000/- has been paid through Indian Bank Cheque and the details of the cheque have been mentioned in Ex.A.2 and that on 21.5.1988, the first Respondent/first Defendant and his son have come to the Appellant/Plaintiff’s Office and handed over Ex.A.3, Parent Document and Ex.A.4, sale deed and they have deposited the Documents for receiving the amount and on 23.5.1988, the son and the father have executed Ex.A.5, Memorandum of Deposit of Title Deeds.
20. It is the further evidence of P.W.1 that the Respondents 1 to 3/Defendants have agreed to pay a sum of Rs.2/-p.m towards interest for Rs.100/- and they have effected Mail Transfer four times for Rs.4,000/- and on 10.6.1989, they have paid a sum of Rs.12,000/- towards three months’ interest which has been endorsed as Ex.A.6 on Ex.A.2, Pro-note and in Ex.A.6 endorsement, the Respondents 1 to 3/Defendants have signed and that the second Respondent/second Defendant has affixed her Thumb Impression and after receipt of Ex.A.7, Lawyer’s Notice on 9.11.1989, the Respondents 1 to 3/Defendants have paid a sum of Rs.20,000/- towards five months’ interest which has been endorsed as Ex.A.8 on Ex.A.2 Pro-note and that Ex.A.2 Pro-note and Ex.A.5, Memorandum of Deposit of Title Deeds have been reiterated by Dhanasekaran and Ex.A.8 endorsement has been reiterated by Jegannathan and after Ex.A.8 endorsement, the Respondents 1 to 3/Defendants have not paid the amount.
21. The evidence of P.W.1 is also to the effect that in the Bank Current A/c No.1285 viz., Ex.A.10 on 23.5.1988, it is mentioned that a sum of Rs.2 Lakhs has been paid and deducted accordingly, and that the first Respondent/first Defendant has received the money paid through cheque and the relevant entry dated 23.5.1988 is Ex.A.11 and after receipt of the loan for four time through Mail Transfer, the first Respondent/first Defendant on different times has paid a sum of Rs.4,000/- aggregating a sum of Rs.16,000/- towards interest, which has been recorded in Ex.A.10 Indian Bank Pass Book.
22. P.W.2 in his evidence has stated that the Respondents 1 to 3/Defendants have borrowed a loan of Rs.2 Lakhs on 20.5.1988 from the Appellant/Plaintiff as per Ex.A.2, Pro-note and that the Appellant/Plaintiff has given the loan of Rs.2 Lakhs through Indian Bank Cheque in the name of the First Respondent/First Defendant and the cheque detail has been mentioned in the Pro-note and that the rate of interest per month is Rs.2/- for Rs.100/- as mentioned in Pro-note and in Ex.A.2, Pro-note, the Respondents 1 and 3/Defendants 1 and 3 have signed and that the second Respondent/second Defendant has affixed her Thumb Impression and on the next day of the loan being paid, the first and third Respondents/Defendants have come to the Appellant/Plaintiff’s Firm and handed over the Original Sale deed in the name of the first Respondent/first Defendant and Certified Copy of the Parent Document which are Exs.A.3 and A.4 and those documents have been handed over with an intention to create an Equitable Mortgage towards the loan taken by the Respondents 1 to 3/Defendants and further, the Respondents 1 to 3/Defendants have executed a Memorandum of Deposit Title Deeds after coming to the Office of the Appellant/Plaintiff and in the said Ex.A.5 Memorandum of Deposit of Title Deeds, the Respondents 1 and 3/Defendants 1 and 3 have signed and that Ex.A.5, Memorandum has been written by them.
23. P.W.3 in his evidence has deposed that the Respondents 1 to 3/Defendants have obtained a loan of Rs.2 Lakhs from the Appellant/Plaintiff’s Firm and that the Respondents 1 to 3/Defendants have paid the interest towards the loan amount and on 10.6.1989, the Respondents 1 to 3/Defendants have paid a sum of Rs.12,000/- towards three months’ interest which has been endorsed as Ex.A.6 in Ex.A.2 Pro-note and the Respondents 1 and 3/Defendants 1 and 3 have signed in the said endorsement and the second Respondent/second Defendant has affixed her thumb impression.
24. It is the evidence of P.W.4 that the Respondents 1 to 3/ Defendants have taken a loan of Rs.2 Lakhs from the Appellant/Plaintiff and on 9.11.1989, the Respondents 1 to 3/Defendants have paid a sum of Rs.20,000/- towards interest for the period of five months and the same has been endorsed as Ex.A.8 on the back side of Ex.A.2 Pro-note and that in the said endorsement in Ex.A.8, the Respondents 1 and 3/ Defendants 1 and 3 have affixed their thumb impressions as well as signatures and the second respondent/second defendant affixed her Thumb Impression alone.
25. D.W.1(First Respondent/First Defendant) in his evidence has stated that the second Respondent/second Defendant is his wife and the third Respondent/third Defendant is his son and that he does not know the place where the Appellant/Plaintiff’s Firm is situated and that it is incorrect to say that on 20.5.1988 he has received a sum of Rs.2 Lakhs as loan agreeing to repay the same with interest at Rs.2/- p.m. for Rs.100/- and executed the Pro-note thereto. Moreover, D.W1 in his further evidence has deposed that it is incorrect to say that on 21.5.1988, himself and the Third Respondent/Third Defendant have handed over the documents to the Appellant/Plaintiff and executed the Equitable Mortgage. The evidence of D.W.1 (the deceased First Respondent/First Defendant) is also to the effect that he has not taken loan from the Appellant/Plaintiff and that the signature and thumb impression seen in Exs.A.6 and A.8 endorsements made on Ex.A.2 Pro-note do not belong to him and that he has not received any amount as loan towards the suit Pro-note and 15 years ago, since his uncle has asked for signature, he has signed in the green paper.
26. The Learned counsel for the Appellant/Plaintiff in support of his contention that Ex.A.5 Memorandum of Deposit of Title Deeds does not require registration cites the decision of this Court in T.V.ALWAR V. BANK OF TAMIL NADU, THIRUNELVELI THROUGH ITS BRANCH MANAGER, 1997 (III) CTC 28, wherein, it is among other things held as follows:
“Therefore, the cumulative effect of these circumstances would go to show that the document in question is at best only a list of title deeds and that the document can never be said to form an integral part of the transaction nor it can be stated to evidence the bargain between the parties. On the other hand, it is at best an instrument recording the particulars of document and nothing more. The document was not intended to and did not operate to create any right in or over any property nor has the effect of creating any charge over the property and therefore it is not a document which requires to be registered. Therefore it follows that the conclusion of the courts below that the document is admissible in evidence and that is not hit by section 17 of the Registration Act is a proper conclusion. Therefore, I find that there is no merit in this appeal. ”
27. He also cites the decision of this Court in H.G.NANJAPPA V. M.F.C. INDUSTRIES (P) LTD. REP BY ITS DIRECTOR IN CHARGE V.SIVAPRASAD, OOTACAMUND, 1987 (100) L.W. 4, wherein it is held thus
“On the facts, the memorandum did not require registration and is admissible in evidence’.
28. In the aforesaid decision at page 5, it is observed as follows:
“That the memorandum in question does not require registration. In this case the defendant has admitted that the title deeds were deposited. It is he who has executed the memorandum and the memorandum merely states that he has deposited with the said company ” the deeds and documents set out in the list hereto as security ….”. It is not the case of the defendant that there was an agreement between the parties that the mortgage was to take effect only on the execution of this memorandum. The memorandum clearly and plainly appears to be something in the nature of a forwarding letter acknowledging the fact that the defendant has deposited the said deeds of title as security which is obvious, because, according to the plaintiff, there is admittedly a promissory note which has been executed much earlier and a sum of money was due on the basis of the said promissory note. The mere statement that a deposit is made by way of security for the repayment of the loan can not be read as a contract which is arrived at by the document itself. The document, therefore, cannot be read as recording an agreement between the parties, namely, the agreement to create a mortgage by deposit of title deeds. It is at best an evidence of the fact that the title deeds have been deposited with the plaintiff.”
29. He further invites the attention of this Court to the decision in KARNATAKA BANK LIMITED, CHENNAI 5 REP. BY ITS BRANCH MANAGER, MR.K.S.JANARDHANA V. ABDUL HUSAIN
AND ANOTHER, 2006 (3) CTC 31, wherein, it is laid down as follows:
“A deed in nature of a Memorandum of deposit of title deeds deposited under equitable mortgage does not require registration and is admissible in evidence etc.”
30. However, the Learned counsel for the respondents 2 to 4 cites the decision in UNITED BANK OF INDIA LIMITED V. LEKHARAM SONARAM AND CO. AND OTHERS, AIR 1965 SC 1591, wherein, it is observed as follows:
“When the debtor deposits with the creditor title deeds of his property with an intent to create a security the law implies a contract between the parties to create a mortgage and no registered instrument is required under S. 59 as in other classes of mortgage. It is essential to bear in mind that the essence of a mortgage by deposit of title deeds is the actual handing over by a borrower to the lender of documents of title to immovable property with the intention that those documents shall constitute a security which will enable the creditor ultimately to recover the money which he has lent. But if the parties choose to reduce the contract to writing, this implication of law is excluded by their express bargain and the document will be the sole evidence of its terms. In such a case the deposit and the document both form integral pans of the transaction and are essential ingredients in the creation of the mortgage. ”
31. It is to be noted that Memorandum of Deposit of Title Deeds is not enough but it must be in pursuance of an agreement for securing of loan advanced as per the decision in CHAUDHARY PARAS RAM SINGH AND OTHERS VS. BABU RAJA MOHAN MANUCHA AND OTHERS, 1944 PRIVY COUNCIL 22.
32. This Court aptly points out the decision in BEJOY RANJAN DAS VS. AJIT KUMAR DUTTA, AIR 1974 CALCUTTA 319, wherein it is held as follows:
“Intention to create security by deed is a question of fact and not of law.”
33. Also, this Court recalls the decision in PENTALA GITHA VARDHANA RAO AND OTHERS VS. THE ANDHRA BANK LIMITED AND OTHERS, AIR 1973 AP 245 wherein, it is observed as follows:
“A mere Memorandum evidencing deposit of title deeds cannot be construed as contract and as such does not requires registration”.
34. In the decision in B.R.SHAMALA AND B.R.SHYAMALA DEVI AND ANOTHER VS. KUNDAN S.BHAYAANI AND OTHERS, 1999 (3) MLJ 74, it is held as follows:
“The document Ex.P.16 shows that it only records a past transaction etc. and further the said exhibit shows that the document has already been handed over. So long as Ex.P.16 is not bargain but only evidences the intention to create a mortgage, it will not require registration.”
35. In the case on hand, on behalf of the Appellant/Plaintiff, Ex.A.2 Pro-note dated 20.5.1988 for Rs.2 Lakhs has been marked before the Trial Court. In the said Ex.A.2 Pro-note, the Respondents 1 and 3/Defendants 1 and 3 have affixed their signature. Also they have affixed their Thumb Impression along with second Respondent/second Defendant in Ex.A.2, Pro-note. Before the Trial Court, the First Respondent/First Defendant has filed the written statement , which has been adopted by the Respondents 2 and 3/Defendants 2 and 3. Only the First Respondent/First Defendant has been examined as D.W.1 before the Trial Court. The Respondents 2 and 3/Defendants 2 and 3 have not been examined as witnesses before the Trial Court. With regard to the execution of Ex.A.2, Pro-note dated 20.5.1988 in favour of the Appellant/Plaintiff by the Respondents 1 to 3/Defendants, there is overwhelming oral evidence of P.W.1 to 4 coupled with Exs.A.9 to A.11 (Cheque book, Pass book and endorsement) in the considered opinion of this Court. But these aspects of the matter have not been looked into by the Trial Court in a proper perspective.
36. In the instant case, a sum of Rs.2 Lakhs paid through Indian Bank Cheque dated 20.5.1988 is governed by the Principles of the Negotiable Instruments Act and therefore, the presumption is attracted background to the issuance of cheque bearing No.85/Y1 694737 which is mentioned in Ex.A.2 Pro-note dated 20.5.1988 for Rs.2 Lakhs executed by the Respondents/Defendants in favour of the Appellant/Plaintiff. Only if the background to the issuance of cheque is not accepted, the presumption under Section 118 of the Indian Evidence Act can be rebutted either by circumstantial evidence or by presumption of fact drawn under Section 114 of the Indian Evidence Act. On going through the Judgment of the Trial Court, this Court is of the considered view that the Trial Court has wrongly construed the ambit and scope of Burden of proof as per Section 101 of the Indian Evidence Act and wrongly shifted the burden on the part of the Appellant/Plaintiff. Further, it has failed to take note of another fact that as per Section 106 of the Indian Evidence Act, it is for the Respondents 1 to 3/Defendants to prove the facts which are essentially within their knowledge and domain.
37. As far as the present case is concerned, the evidence on record discloses that the consideration mentioned in the Pro-note passed to the Respondents 1 to 3/Defendants and the presumption under Section 118 of the Negotiable Instruments Act is to be drawn. Further, the Appellant/Plaintiff has prima facie established that it is the Respondents 1 to 3/Defendants who have executed Ex.A.2 Pro-note dated 20.5.1988 for Rs.2 Lakhs and on behalf of the Respondents 1 to 3/Defendants, the First respondent/First defendant has received the Indian Bank Cheque dated 20.5.1988 and also, the Appellant/Plaintiff have proved to the satisfaction of this Court by adducing cogent, coherent and convincing evidence on their behalf through the evidence of P.Ws.1 to 4 that the Respondents 1 to 3/Defendants have paid a sum of Rs.12,000/- towards interest as per Ex.A.6 and further paid a sum of Rs.20,000/- towards interest as per Ex.A.8. In that view of the matter, this Court comes to an inevitable conclusion that the deceased First Respondent/First Defendant, the Second and Third Respondents/ the Second and Third Defendants have executed Ex.A.2 Pro-note dated 20.5.1988 for Rs.2 Lakhs in favour of the Appellant/Plaintiff after receiving the consideration and the point No.1 is answered in favour of the Appellant/Plaintiff.
38. Coming to the aspect of execution of Ex.A.5 Memorandum of Deposit of Title Deeds Dated 23.5.1988 in favour of the Appellant/Plaintiff by the Respondents 1 to 3/Defendants, it is to be pointed out by this Court that the recitals of Ex.A.5, Memorandum dated 23.5.1988 refers to the receipt of loan of Rs.2 Lakhs through Indian Bank Cheque dated 20.5.1988 and that the Respondents 1 to 3/Defendants have deposited their sale deeds dated 20.8.1971 and 16.09.1983 on 21.5.1988 at Thiruchengodu with an intention to create Mortgage by Deposit of Title Deeds and to confirm the same, they have executed Ex.A.5 Memorandum of Deposit of Title Deeds. Though on the side of the Respondents, the pleas have been taken to the effect that the Respondents 1 to 3 have not executed Ex.A5 Memorandum of Deposit of Title Deeds with an intention to create an Equitable Mortgage and the said Memorandum requires Registration under Section 17 of the Indian Registration Act, on going through the recitals of Ex.A.5, Memorandum of Deposit of Title Deeds, this Court is of the considered view that the said document speaks only of the past transaction and also proves the intention to create security by the document concerned and that the Respondents 1 to 3 have executed Ex.A5 Memorandum of Deposit of Title Deeds with an intention to create an Equitable Mortgage at Thiruchengode and that Ex.A5 Memorandum of Deposit of Title Deeds does not require Registration under Section 17 of the Indian Registration Act and the point Nos.2 and 3 are answered accordingly.
39. In regard to the entitlement of Preliminary Decree in favour of the Appellant/Plaintiff, it is to be mentioned that the Appellant/Plaintiff has filed the suit for recovery of a sum of Rs.3,94,266/- with subsequent interest at 24% p.a. till realisation with costs. The Principal amount advanced is Rs.2 Lakhs. The interest has been calculated at 24% p.a. for the period from 20.5.1989 to 7.6.1993 at Rs.1,94,266. Except the payment of interest of Rs.12,000/- as per Ex.A.6 and further interest of Rs.20,000/- as per Ex.A.8, the Respondents 1 to 3/Defendants have not paid any amount towards the loan transactions. For the suit loan of Rs.2 Lakhs, the Respondents 1 to 3/Defendants created an Equitable Mortgage by Deposit of Title Deeds as per Ex.A.5 Memorandum. In regard to the contention that the Court of Law can direct payment of interest at 6% p.a in mortgage suit from the date of the suit and not at contractual rate, the Learned counsel for the Respondents relies on the decision of this Court in A.S.RAMAKRISHNAN V. BANK OF BARODA, MADURAI [DB] 2001 (1) CTC 662, wherein, it is held that “Court can direct payment of interest 6% per annum from date of suit and not at contractual rate etc.” Section 34 of the Civil Procedure Code is a general Procedural Provision. It empowers a Court of Law to award reasonable pendente lite and future interest as opined by this Court. This Court aptly points out that in the decision CENTRAL BANK OF INDIA V. RAVINDRA AND OTHERS, (2002) 1 SCC 367 AT PAGE 368 wherein the Hon’ble Supreme Court has observed that ‘the word ‘may’ in Section 34 of Civil Procedure Code confers a discretion on the Court to award or not to award interest or to award interest at such rate as it deems fit dehors the contract between the parties.’ Further, this Court has discretion to fix the pendente lite interest and subsequent interest as per Order 34 Rule 11 CPC which is squarely applicable to the Mortgage suit before us. Since the Respondents 1 to 3/Defendants have not repaid the loan amount of Rs.2 Lakhs except the amount of Rs.12,000/- and Rs.20,000/- paid by them towards interest as per Exs.A.6 and A.8, this Court comes to an inevitable conclusion that the deceased First Respondent/First Defendant and the Respondents 2 to 4 (Second and Third Defendants and the Fourth Respondent) are liable to pay the principal amount of Rs.2 Lakhs at the contractual rate of interest till the date of suit and thereafter, they are required to pay interest for the principal sum only at the rate of 12% p.a. from the date of suit till the date of realisation together with procosts (less amount already paid) and accordingly, the Appellant/Plaintiff is entitled to get the relief of Preliminary Decree and the Point No.4 is so answered.
40. In the result, the appeal is allowed in part leaving the parties to bear their own costs. The Respondents/Defendants are directed to pay the Principal amount of Rs.2 Lakhs at the contractual rate of interest till the date of suit and thereafter, they have to pay interest for the principal sum only at the rate of 12% with proportionate costs from the date of suit till the date of realisation (less amount already paid) and accordingly, the Preliminary Decree is passed with Proportionate-costs in favour of the Appellant/Plaintiff. Time for payment is six months. Resultantly, the Judgment and Decree of the Trial Court dated 31.7.2000 passed in O.S.No.116 of 1997 stands modified.
08-06-2010
Index: Yes/No
Internet:Yes/No
cla
To
1)The Subordinate Judge,
Attur.
2)The Record Keeper,
V.R. Section,
High Court, Madras.
M. VENUGOPAL,J
cla
Judgment in
A.S No.661 of 2001
08-06-2010