IMPORTANT POINTS
(1) For every fact which is pleaded, there has to be evidence, either oral or documentary, to substantiate the same.
(2) Justice on merits is to be preferred as against what scuttles a decision on merits.

JUDGMENT

AHSANUDDIN AMANULLAH, J.

Heard Mr. Narendra Kumar, learned counsel for the appellant and Mr. V. Prabhakar, learned Senior counsel for the respondent.

2. Leave granted. The pending applications shall be dealt with in the final pages of this judgment.

3. The present appeals germinate from the:

3.1. Final Judgment and Order dated 22.02.2017 (hereinafter referred to as the “First Impugned Order”)¹ [2017 SCC OnLine Mad 11918 : (2017) 3 CTC 777 : (2017) 3 Mad LJ 522 : (2017) 4 LW 421] passed by a Division Bench of the High Court of Judicature at Madras (hereinafter referred to as the “High Court”) in Original Side Appeal² [Hereinafter abbreviated to “OSA”.] No.189 of 2011, whereby the appeal filed by the respondent was allowed and Judgment dated 01.04.2010 passed by a Single Judge of the High Court in Civil Suit No.701 of 2005 (hereinafter referred to as the “suit”) was set aside.

3.2. Order dated 12.07.2018 (hereinafter referred to as the “Second Impugned Order”) passed by the same Division Bench, whereby Civil Miscellaneous Petition³ [Hereinafter abbreviated to “CMP”] No.10107 of 2017 in OSA No.189 of 2011 filed by the appellant seeking to “set aside” the First Impugned Order and restore the main appeal for fresh hearing, was dismissed.

BRIEF FACTS:

4. The respondent (defendant in the suit) and his wife are engaged in business of building materials. As per the appellant (plaintiff in the suit), the respondent approached him in February, 1995 seeking a loan for his business. The appellant advanced a loan of Rs.10,00,000/- (Rupees Ten Lakhs) to the respondent on the security of his properties.

5. Since the respondent could not pay Stamp Duty on the Mortgage Deed, it was agreed between the parties that the said sum be split into two registered mortgages and the balance in four promissory notes. Accordingly, the respondent executed the following:

i) Mortgage Deed dated 16.03.1995 for Rs.1,00,000/- (Rupees One Lakh) agreeing to repay the same together with interest at 36% per annum⁴[ Hereinafter abbreviated to “p.a.”];

ii) Mortgage Deed dated 17.04.1995 for Rs.50,000/- (Rupees Fifty Thousand) agreeing to repay the same together with interest at 36% p.a., and;

iii) Four promissory notes for the balance amount of Rs.8,50,000/- (Rupees Eight Lakhs Fifty Thousand).

6. Besides the two mortgages supra, the respondent borrowed the remaining Rs.8,50,000/- (Rupees Eight Lakhs Fifty Thousand) in four promissory notes on different dates. Since there was default in payment of interest, the appellant demanded repayment of the amount due under the four promissory notes. The respondent thereupon, in various panchayats, promised to repay the amounts. Ultimately, in the panchayat dated 24.06.2000, the respondent produced title document of his property as security towards debt under the four promissory notes, which has been noted in the Agreement dated 24.06.2000 (hereinafter referred to as the “Agreement”). This Agreement, in essence, is the root of the instant lis.

7. The Agreement notes that the respondent owed a total amount of Rs.11,00,000/- (Rupees Eleven Lakhs) to the appellant and in settlement thereof, the respondent handed over the title deeds pertaining to the property situated at No.33, Avvai Thirunagar, Chennai - 600111, admeasuring 1300 square feet of land together with 700 square feet building (hereinafter referred to as the “schedule property”), which was valued at Rs.9,00,000/- (Rupees Nine Lakhs). Per the Agreement, the respondent agreed to register the Sale Deed as and when demanded. Further, for re-paying the balance sum of Rs.2,00,000/- (Rupees Two Lakhs), it was agreed that the respondent will redeem the mortgaged property from the appellant and re-mortgage it elsewhere.

8. After the Agreement was entered into between the parties, the promissory notes were returned which were torn-out in the panchayat. Thereafter, the respondent neither executed a Sale Deed nor paid the balance sum of Rs.2,00,000/- (Rupees Two Lakhs). As a result, the