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IN THE HIGH COURT AT CALCUTTA
Soumen Sen, J.
Indian Chain Private Limited.
Vs.
Ajit Nain & Anr.
C.S. 158 of 2008
Decided on : 28th July, 2014
Plaintiff advanced a loan of Rs.20 lacs to Defendant No.1 on terms of an agreement that the loan would be repaid in five monthly installments of Rs.4 lacs each commencing from January 1995 to May 1995. The agreement provided for penal interest of 1% per month in the event of default. The loan was secured by an equitable mortgage of a flat owned by Ashok Nain at “Monalisa Co-operative Housing Society”, being Flat No.6D, 17, Camac Street, Kolkata, in favour of the plaintiff. The Defendant No.1 in acknowledgement of the loan also executed a demand Promissory Note. The plaintiff instituted a suit for recovery of money lent and advanced and for enforcement of mortgage. The defendants contested the suit and filed a written statement. The defendants in the written statement stated that there is no valid creation of an equitable mortgage as alleged by the plaintiff. The Memorandum of Understanding was executed prior to disbursement of the loan. Mr. Ashok Nain was not present at the time of disbursement of the loan on 26th September, 1994. The letter of declaration dated 27th September, 1994 was issued by the defendant No.2 one day after the loan was given. There is no agreement for payment of penal interest in the Memorandum of Understanding or in the declaration of Ashok Nain. The present suit is a counter blast to the criminal proceeding instituted by the defendant No.1. The purported letter dated August 23, 1999 was never issued by the defendant No.1 or his manager Mr. Ramachandran. A bare perusal of the purported letter would show that the signature made therein is not that of Mr. Ramachandran and differs from the original signature of Mr. Ramachandran appearing on the Memorandum of Understanding dated 26th September, 1994. The interest all along has been paid in cash as directed by Mr. N.K. Chitlangia, which are shown in the books and Income Tax return of the defendant No.1. No money is due or payable to the plaintiff company as the balance sheet of the plaintiff company dated 31st March, 2007, would show that no amount is due or payable to the plaintiff company. The five post dated cheques of Rs.3 lacs each was issued on the basis of an assurance and promise given by Mr. Chitlangia that the plaintiffs should give defendant No.2 a further loan for a sum of Rs.15 lacs and on the basis of such promise and relying on such representation, the defendants in or about January, 2008, have issued five post dated cheques. Since the said plaintiff company did not give the said loan of Rs.15 lacs, the defendant No.1 by a letter dated 11th March, 2008 demanded return of the said post dated cheques. When such cheques were not returned, the defendant No.1 had to stop payment of those cheques for Rs.3 lacs each.
Fact of the Case:
Plaintiff advanced a loan of Rs.20 lacs to Defendant No.1 on terms of an agreement that the loan would be repaid in five monthly installments of Rs.4 lacs each commencing from January 1995 to May 1995. The loan was secured by an equitable mortgage of a flat owned by Ashok Nain at “Monalisa Co-operative Housing Society”, being Flat No.6D, 17, Camac Street, Kolkata, in favour of the plaintiff. The Defendant No.1 in acknowledgement of the loan also executed a demand Promissory Note. The plaintiff instituted a suit for recovery of money lent and advanced and for enforcement of mortgage. The defendants contested the suit and filed a written statement. The defendants in the written statement stated that there is no valid creation of an equitable mortgage as alleged by the plaintiff.
Finding of the Court:
The Court found that the plaintiff had proved creation of a valid mortgage and that the defendants had failed to prove that the loan had been repaid. The Court also found that the defendants had not pleaded novation of contract or accord and satisfaction, and that the onus lay on the defendants to show that the said sum of Rs.2 Lacs was paid and received by the plaintiff in full and final satisfaction of its dues.
Issues: 1. Whether the plaintiff is entitled to a decree for Rs.1,53,34,792.09 along with interest @ 18%? 2. Whether the plaintiff is entitled to other reliefs and any part thereof as claimed in the suit?
Ratio Decidendi: 1. An equitable mortgage can be created by deposit of title deed with an intention to create mortgage. It does not require any such form. 2. The declaration dated 27th September, 1994 clearly shows that the documents have already been delivered to the plaintiff with an intent to create a security in respect of the flat in question. 3. The language of the declaration leaves no manner of doubt that the declaration was preceded by deposit of the title deeds under the share certificate. 4. This would also be evident from the letter dated 26th September, 1994 which gives particulars of the loan amount and it records that in consideration of the said loan of Rs.20 lacs, the defendants had delivered through Mr. Ashoke Nain one share certificate bearing No.17 in respect of the Monalisa Co-operative Housing Society”, being Flat No.6D, 17, Camac Street, Kolkata, standing in the name of Ashoke Nain as a mortgage.
Final Decision: The suit is decreed accordingly. The department is directed to draw the decree as expeditiously as possible.
Soumen Sen, J:-
The plaintiff has instituted this suit for recovery of money lent and advanced and for enforcement of mortgage. The case made out by the plaintiff in the plaint is summarized below.
On or about 26th September, 1994, the plaintiff had lent and advanced a sum of Rs.20 lacs to Ajit Nain, defendant no.1, on terms of an agreement that the said sum would be repaid by him in five monthly installments of Rs.4 lacs each commencing from January 1995 to May 1995. The agreement provided that the said loan would carry an interest at the rate of 18% per annum to be paid on monthly basis by the defendant commencing from 25th October, 1994 on reducing balance. In the event of default of payment or either the principal or the interest, the defendant no.1 would pay penal interest of 1% per month. In consideration of the plaintiff agreeing to grant such accommodation loan to the defendant No.1 and as security thereof, the defendant No.2 would mortgage a flat owned by Ashok Nain at “Monalisa Co-operative Housing Society”, being Flat No.6D, 17, Camac Street, Kolkata, in favour of the plaintiff. The defendant No.2 is the brother of the defendant No.1. On the basis of such agreement the plaintiff by a cheque bearing No.47613 dated September 26, 1994 drawn on Indian Bank, Ganesh Chandra Avenue, Kolkata, lent and advanced a sum of Rs.20,00,000/- to the defendant No.1. The defendant No.1, thereafter encashed the said cheque and appropriated the proceeds thereof for his own benefit. The terms and conditions of the said loan agreement were recorded in a letter written by the defendant no.1 dated 26th September, 1994.
The defendant No.1 in acknowledgement of such loan also executed a demand Promissory Note. In consideration of the plaintiff granting such loan of Rs.20,00,000/- (Rupees twenty lakhs) only to the defendant no.1 as aforesaid and as further security, therefor, the defendant no.2 deposited with the plaintiff at Calcutta the original Title Deed in respect of his said flat being Flat No.6-D on the 6th floor of Monalisa Building at Premises No.17, Camac Street, Kolkata – 700 017 situated within the jurisdiction of this Hon’ble Court together with all furniture and fixtures, sanitary fittings, equipments and garage No.22 in the said Premises and thereafter recorded the same in a writing dated 27th September, 1994. The original Title Deeds deposited by the defendant no.2 to the plaintiff are as follows:-
(i) Original share script bearing no.17 of Monalisa Co-operative Housing Society Limited.
(ii) Purchase Agreement dated 6th May, 1980 between Ms. Fatima Raza and the defendant no.2.
Out of the principal amount of Rs.20 lacs lent and advanced, only a sum of Rs.13 lacs have been repaid by the defendants till May, 1999, leaving a balance of Rs.7 lacs as outstanding on account of principal. Interest, however, was paid till 25th October, 1996.
The defendants thereafter in acknowledgement of their liability paid a sum of Rs.2 lacs by two several cheques bearing No.540739 dated nd November, 2006 for Rs.1 lac and Cheque No.540740 dated 7th November, 2006 for Rs.1 lac respectively. The defendants, thereafter, on repeated demands for payment of the balance amount, proposed to make partial payment of the amount due and, accordingly, had issued five post dated cheques of Rs.3 lacs each payable between 31st March, 2008 and 30 October, 2008. The defendants, however, wrongfully, illegally and mischievously with the intention of avoiding payment of the amounts covered by the said cheques by letter dated 11th March, 2008 demanded return of the said cheques on allegation that the said defendant No.1 did not receive the alleged value against the said cheques.
In the premises, the plaintiff filed a suit against the defendants claiming a money decree for a sum of Rs.1,53,34,792.09 on account of balance principal amount and interest as well as for foreclosure and sale of the mortgaged flat.
The defendants contested the suit and filed a written st
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