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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. VENUGOPAL
M/s.Gandhimathi Corporation,
Versus
Pachamuthu (Deceased) & Others
A.S No.661 of 2001
Decided on : 08-06-2010
(B)Negotiable Instruments Act, 1881 (26 of 1881)-Sec.118-Negotiable instruments-Pro note-Execution-Consideration-Presumption-Once the facts preceding the execution of the negotiable instrument is established, presumption under Sec.118 of the Negotiable Instruments Act could be invoked against the defendant.
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. Para 36
(C)Registration Act, 1908(16 of 1908)-Sec.17- Memorandum of deposit of title deeds-Past transaction-Registration-Necessity-Memorandum that evidences the past transaction of deposit of title deeds as security for a loan amount need not be compulsorily registered under Sec.17 of the Registration Act, 1908.
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. Para 38
(D)Code of Civil Procedure, 1908(5 of 1908)-O.34 R.11- Mortgage-Interest-Contractual rate-Variation-Court-Jurisdiction-In a suit for a recovery of a sum of money based on mortgage, the Court has discretion to award interest at the rate other than the one agreed by 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. Para 39
1. The Appellant/Plaintiff has preferred this appeal as against the Judgment dated 37. 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 37. 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 25. 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 25. 1988 has not been registered and therefore the same is not accepted and resultantly, dismissed the suit.
3. Dissatisfied with the Judgment dated 37. 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 25. 1988 have executed in favour of the Appellant/Plaintiff Ex.A.5 Memorandum dated 25. 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 25. 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 Courts Judgment in O.S.No.116 of 1997 dated 37. 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 25. 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 est
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