2011 Supreme(Mad) 4178

High Court of Judicature at Madras
M. VENUGOPAL
A.M. Ambrose
Versus
S. Jeyaraj & Others
A.S.No.131 of 2004
Decided on : 04-10-2011

The Court held that the Appellant/Plaintiff is not entitled to recover a sum of Rs.7.35 lakhs with interest at 24% per annum and further it is held that the Appellant/Plaintiff has misused the Pro-notes as alleged by the Respondents/Defendant and the Points are answered against the Appellant/Plaintiff accordingly.

Headnote:

APPEAL - SUIT FOR RECOVERY OF LOAN AMOUNT - DISMISSAL OF SUIT BY TRIAL COURT - APPELLANT/PLAINTIFF CHALLENGED THE JUDGMENT AND DECREE - HELD, APPEAL DISMISSED.

Fact of the Case:

The Appellant/Plaintiff filed the present Appeal before this Court as against the Judgment and Decree dated 22.09.2003 in O.S.No.3230 of 2001 passed by the Learned II Additional City Civil Court Judge, Chennai. The Appellant/Plaintiff advanced a loan to the 1st Respondent/1st Defendant which was repaid by him together with interest @24% per annum. In June 1999, the 1st Respondent/1st Defendant approached the Appellant/Plaintiff and wanted a sum of Rs.6.5 lakhs for purchasing a property and promised to return the said amount, within a period of eight months, at the latest by February 2000. The Appellant/Plaintiff advanced a sum of Rs.6.5 lakhs on 15.06.1999 and that the 1st Respondent/1st Defendant executed a Promissory Note for an amount of Rs.6.5 lakhs on 15.06.1999, promising to repay the loan along with interest @24% per annum. The 3rd Respondent/3rd Defendant after receipt of an amount of Rs.35,000/- executed a separate Promissory Note on 17.02.1999, promising to repay the loan of Rs.35,000/-with interest @24% per annum. During February 2000, the Appellant/Plaintiff requested the Respondents/Defendants to repay the aforesaid amount with interest, since he fell sick and was in need of money for his medical treatment. The 1st Respondent/1st Defendant promised to settle the amount during the last week of February 2000. When the Appellant/Plaintiff approached the 1st Respondent/1st Defendant in the last week of February 2000, the 1st Respondent/1st Defendant refused to see him. In spite of the Appellant/Plaintiff approaching the Respondents/ Defendants along with friends requesting to settle the amount, the Respondents/Defendants failed and neglected to pay the amount. The Appellant/Plaintiff also advanced a hand loan of Rs.50,000/- to the 2nd Respondent/2nd Defendant. The 2nd Respondent/2nd Defendant promised to repay the said loan along with interest @ 24% per annum. The Respondents/Defendants in spite of several demands made by the Appellant/Plaintiff had failed to repay the amount. For the due repayment of the loans, as referred to supra, the 3rd Respondent/3rd Defendant mortgaged the property on 22.06.19996 bearing Paimash No.242, S.No.64, Block No.1, T.S.No.39, consisting of a House and Ground at Puliyur Village, Kamala Nehru, as collateral security for the repayment of the loan and created a mortgage for the loans advanced and for future loans to be granted by the Appellant/Plaintiff to the Respondents/Defendants. The security was kept alive, since there was some loams or the other advanced to both the defendants with remained unpaid. Further the security was continuing as an account of the Respondents/Defendant with the Appellant/Plaintiff was a running account. The Appellant/Plaintiff issued a Lawyer's notice dated 23.03.2001 to the Respondents/Defendant, since the mortgage was in his favour in respect of three loans. The 3rd Respondent/3rd Defendant sent a reply stating that document of title was lost and that he gave the Police complaint for the same and this reply was only to evade payments. The Respondents/Defendants had not repaid the amount due to the Appellant/Plaintiff, in spite of reminders. The Appellant/Plaintiff, although he was entitled to claim interest @ 24% per annum for the sum of Rs.7,35,000/-, he restricted his claim only in respect of the Principal amount as he was unable to pay Court Fee for the interest portion. As such, the Respondents/Defendants were to pay a sum of Rs.7,35,000/- with future interest @24% per annum from the date of Plaint till the date of realisation. The Mortgage created by the 3rd Respondent/3rd Defendant was for all the three loans. Therefore, a single suit was filed by the Appellant/Plaintiff in respect of three loans due by the Respondents/Defendants to the Appellant/Plaintiff, as a different cause of action against the Respondents/Defendants were clubbed as per order Order II Rule 3 of the Civil Procedure Code. Therefore, the present suit had been filed in directing the Respondents/Defendants jointly and severally to pay the Appellant/Plaintiff a sum of Rs.7,35,000/- along with further interest @ 24% per annum (along with penal interest), the quarterly rest from the date of filing of the suit till date of realisation and in default of the payment of the said amount within the time granted by the Court, the Plaint schedule mentioned property may be ordered to be sold etc. The 1st Respondent/1st Defendant became a Partner in the real estate business run by the Appellant/Plaintiff's wife Mrs.Innocent Ambrose in which they both did business amounting to more than Rs.3 crores. On numerous occasions, he had financial transactions with his business Partner viz., the wife of the Appellant/Plaintiff and the same was shared by him during a short period of time. Later, because of the Appellant/Wife's fraudulent activities Police arrested the Appellant/Plaintiff and his wife. They were remanded to judicial custody. Hence, he quit the business which he had with the wife of the Appellant/Plaintiff, though his due amount was not paid by her. Although the Appellant/Plaintiff promised the 2nd Respondent/2nd Defendant to pay the said sum of Rs.30,00,000/- as his share of profit. The Appellant/Plaintiff, in the partnership business, had not bothered to pay the profit share as agreed to. Thereafter, when he requested the Appellant/Plaintiff's wife, he was threatened by the Appellant and his wife that they would forge his signature in the Promissory Note and filed cases through nominees. The Appellant/Plaintiff had misused all the documents, Promissory Notes and Cheques to his convenience. Before the trial Court, the Appellant/Plaintiff was examined as witness PW1 and Ex.A.1 to Ex.A.8 were marked. On the side of the Respondents/Defendants, the 3rd Respondent/3rd Defendant was examined as DW1 and no exhibits were marked.

Finding of the Court:

The Court held that the Appellant/Plaintiff is not entitled to recover a sum of Rs.7.35 lakhs with interest at 24% per annum and further it is held that the Appellant/Plaintiff has misused the Pro-notes as alleged by the Respondents/Defendant and the Points are answered against the Appellant/Plaintiff accordingly.

Issues: 1. Whether the Appellant/Plaintiff is entitled to recover an amount of Rs.7,35,000/-together with interest @ 24% per annum?. 2. Whether the Appellant/Plaintiff is entitled to file a single suit for all the three loans due by the Respondents/Defendants (clubbing the different cause of action) as per Order II Rule 3 of the Civil Procedure Code?. 3. Whether the Appellant/Plaintiff has misused the Pro-notes etc., as alleged by the Respondents /Defendants?

Ratio Decidendi: The Court held that the Appellant/Plaintiff is not entitled to recover a sum of Rs.7.35 lakhs with interest at 24% per annum and further it is held that the Appellant/Plaintiff has misused the Pro-notes as alleged by the Respondents/Defendant and the Points are answered against the Appellant/Plaintiff accordingly.

Final Decision: The Court dismissed the Appeal and affirmed the Judgment and Decree of the trial Court dated 22.09.2003 in O.S.No.3230 of 2001 passed by the Learned II Additional City Civil Court Judge, Chennai.