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1988 Supreme(J&K) 46
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
Mazhar Ali Shah,M.L. Bhat, JJ.
Satish Sethi - Appellant
Versus
Mehta Shiv Dass Kohli & Anr. - Respondent
CIA No. 19/1978
Decided On : 15 March, 1988
Advocate For Appellant: U.K. Jalali
Advocate For Respondent: S.P. Gupta
A court is always empowered under Rule 7 of order 7 of the code of civil procedure, as the court may think just to the same, extent as if it had been asked for.
Headnote:
MORTGAGE - SUIT FOR RECOVERY OF LOAN - DECREE AGAINST MORTGAGOR - VALIDITY - COMPANY ACT - WHETHER SUIT MAINTAINABLE - ORDER 1 RULE 1 OF THE CODE OF CIVIL PROCEDURE - APPLICABILITY.
Fact of the Case:
Plaintiffs, a private limited company and its chairman, filed a suit against the defendant for the recovery of a loan of Rs. 15,000/- secured by a mortgage. The defendant admitted receiving the loan but claimed that he had repaid Rs. 5,000/- on the date of the mortgage and Rs. 3,800/- subsequently. The trial court found that the defendant had only repaid Rs. 1,200/- and Rs. 1,000/- and decreed the suit for Rs. 18,000/- in favor of the plaintiff company. The defendant appealed, arguing that the suit was not maintainable as it was filed on behalf of the company and not the chairman individually, and that a personal decree could not be passed against him in the presence of the mortgage deed.
Finding of the Court:
The High Court dismissed the appeal. It held that the decision on the preliminary issues, which held that the suit was filed on behalf of the company, did not bar the grant of relief to the chairman individually, as the court was not called upon to decide whether the chairman was barred from getting a decree in his individual capacity. The court also held that the provisions of Order 1 Rule 1 of the Code of Civil Procedure could be pressed into service to help the plaintiffs, as the transaction of borrowing the money was between the plaintiff and the respondents and the chairman had paid back the money to the company, entitling him to claim the entire amount borrowed by the defendant.
Issues: 1. Whether the suit was maintainable as it was filed on behalf of the company and not the chairman individually? 2. Whether a personal decree could be passed against the defendant in the presence of the mortgage deed?
Ratio Decidendi: 1. The decision on the preliminary issues, which held that the suit was filed on behalf of the company, did not bar the grant of relief to the chairman individually, as the court was not called upon to decide whether the chairman was barred from getting a decree in his individual capacity. 2. The provisions of Order 1 Rule 1 of the Code of Civil Procedure could be pressed into service to help the plaintiffs, as the transaction of borrowing the money was between the plaintiff and the respondents and the chairman had paid back the money to the company, entitling him to claim the entire amount borrowed by the defendant.
Final Decision: The appeal was dismissed and the decree of the trial court was confirmed.
1. The Letters patent appeal arises out of the judgment & decree passed by a Single Judge of this Court in Civil Suit No : 16 of 1969 on October 30, 1978 decreeing the suit in favour of respondent No; 1 for the recovery of a sum of Rs. 18, 050/-
2. A brief resume of the facts will show that respondents 1 & 2 brought a suit for the recovery of Rs. 20, 250/- against the appellant & prayed for the sale of one building with saw mill & furniture of the factory, etc., for the payment of the amount indicated hereinabove alleged to have been mortgaged with respondent No ; 2. Respondent No ; 2 herein was a registered private limited company in the name & style of M/s Rashtriya Loan and Chit Fund Pvt. Ltd., Jammu. Respondent No ; 1 happens1 to be the Chairman of the said company. It is stated that the appellant is related to respondent No 1, who in the beginning of 1966 approached him with a request to advance a loan of Rs. 15, OOO/- as he was in the need of money for advancing his business. Appellant in his turn offered to mortgage his property with respondent No ; 1. Respondent No ; 1 on his part advanced Rs. 5, OOO/- out of his own money and took Rs. 10, 000/- as advance from Respondent No ; 2, which was paid to him for payment to the appellant by means of two cheques of Rs. 5000/- each drawn in favour of respondent No; 1 from National Bank of Lahore Limited. This way the said money was paid to the appellant by respondent No; 1, however, a mortgage deed was executed to secure the said money by the appellant in favour of respondent No ; 2. It is further stated that the appellant agreed to pay interest on the borrowed money at the rate of 1 per cent per annum. It is alleged that respondent No ; 1 returned the sum of Rs. 10, OOO/-, which was advanced to him to respondent No ; 2- the Company. Since the appellant failed to pay the loan advanced to him of Rs. 15, OOO/- as indicated hereinabove, the present suit was filed for the recovery of Rs. 15, OOO/- as the principal and Rs. 5, 250/- towards interest as stipulated claiming total sum of Rs; 20, 250/- on behalf of both the respondents against the appellant.
3. The appellant defended the suit though did not deny the receipt of Rs. 15,000/- before the Sub-Registrar at the time of registration of the mortgage deed on September 3, 1966, but pleaded that Rs. 5,000/- was returned by him to respondent No; 1 on the very day as he represented to him that the same will be adjusted towards the interest. However, he further pleaded that out of the sum of Rs. 15000/- on deduction of Rs. 5,000/- as indicated hereinabove Rs. 10,000/-was paid to him by way of two cheques endorsed in his favour by respondent No ; 1 in his capacity as Chairman of the Board of Directors of Respondent No; 2 the Company. Regarding mortgage deed, it was contended that the same was executed under duress without consideration, which is not binding on him. The appellant also claimed to have made a payment of Rs. 6, OOO/- to respondent No; 2, out of which it is alleged that Rs. 1200/- were paid through its Director -Yash Paul Kapoor, Rs. 1,000/- through its chairman-Respondent No ;1 and Rs. 3, 800/- through another Director of the Company. Thus leaving the total-of Rs. 4,000/- to be paid by him. Learned Single Judge on the pleadings of the parties framed the following issues on 7-1-1970:-
1.. Whether the petition of plaint is not verified according to law. If so, what is its effect on the suit ? O. P. D.
2. Whether plaintiff No ; 2 is a private limited Company and plaintiff No ; 1 is its Chairman ? O. P. P
3. If issue No ; 2 is proved in favour of the plaintiff, whether the suit is not tenable, if so, how ? O. P. D.
4. Whether the suit is barred by any provisions of the Companies Act ? O. P D.
5. Whether the mortgage deed dated 3-9-l966 was without consideration & was got executed by the defendant ?
