Before the Madurai Bench of Madras High Court
THE HONOURABLE MR. JUSTICE D. HARIPARANTHAMAN
M. Andiappa Chettiar & Others
Versus
R. Mohandoss
TR.C.M.P.(MD) NO.214 OF 2009 & M.P.NO.1 OF 2009
Decided On :Decided on : 02-03-2011
Money Lenders Act - Mortgage Dispute - Tamil Nadu Money Lenders Act 1957, Tamil Nadu Prohibition of Charging Exorbitant Interest Act 2003 - Section 7 of the Tamil Nadu Money Lenders Act, 1957, Section 2(5), 2(3), 3, 5 of the Act 38 of 2003
Fact of the Case:
The petitioners filed a suit for recovery of a mortgage amount. The respondent filed a petition under the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003, alleging exorbitant interest charges. The respondent's father died during the pendency of the suit, leading to a complaint against the petitioners for charging exorbitant interest.
Finding of the Court:
The court found that the cause of action for both the suit and the petition were the same, and both should be tried together. However, the purpose of the Act should also be considered. The court directed the District Judge to try the issue involved in the petition as a preliminary issue before proceeding with the suit.
Issues: Whether the suit and the petition should be tried together, and the interpretation of the Tamil Nadu Prohibition of Charging Exorbitant Interest Act, 2003.
Ratio Decidendi: The cause of action for both the suit and the petition were the same, and the court directed the preliminary issue to be tried before the suit.
Final Decision: The court ordered the petition and the suit to be tried together, with a direction to try the issue involved in the petition as a preliminary issue before proceeding with the suit.
1. This petition has been filed with a prayer to withdraw the M.L.O.P.No.111/2009 pending on the file of the Subordinate Judge, Pudukkottai and transfer the same to the file of the District Judge, Pudukkottai to be tried along with O.S.No.114 of 2004 pending on the file of the District Judge, Pudukkottai.
2. The averments made in the affidavit filed in support of this petition are as follows:
One Mr.R.Rengasamy and his wife R.Mahalakshmi borrowed a sum of Rs.60,000/- on 09.01.1992 on mortgaging the property belonging to them and executed a registered mortgage in favour of the petitioners herein. As per the mortgage deed, they agreed to pay interest at 24% per annum at quarterly rests. But whenever the petitioners requested the borrowers to pay the amount due, they paid some amount towards interest and did not pay the entire interest due and principal amount. Hence, the petitioners herein filed a suit in O.S.No.114 of 2004 on the file of the District Judge, Pudukkottai against the said R.Rengasamy and his wife R.Mahalakshmi for recovery of the amount due under the mortgage. During the pendency of the suit, the first defendant Mr.R.Rengasamy died and his sons and daughters were impleaded as legal representatives. The defendants filed detailed written statement accepting the execution of the mortgage deed, but only disputed the rate of interest. When the suit was posted for trial, the fifth defendant namely Mr.R.Mohandoss, who is the son of the borrower Mr.R.Rengasamy filed a petition in M.L.O.P.No.111 of 2009 before the Subordinate Judge, Pudukkottai on 20.08.2009 against the petitioners herein alleging that the petitioners herein are claiming exorbitant rate of interest and sought to deposit a sum of Rs.1,54,290/- to the satisfaction of the loan and interest due and for injunction restraining the petitioners herein from adopting coercive steps to recover the amount with exorbitant rate of interest in any other manner whatsoever. In the said petition, notice was not served on the petitioners herein. But notice was directed to be served only on the advocate who was appearing for the petitioners in the suit. Immediately, the petitioners appeared through counsel and also filed objections. It is further stated that the M.L.O.P.No.111 of 2009 cannot be tried independently and that it depends upon the judgment to be passed in O.S.No.114 of 2004. The cause of action for both the suit and M.L.O.P., are one and the same and everything is based upon the mortgage deed, referred to above. The learned Subordinate Judge is pressurizing the petitioners herein to argue the M.L.O.P., without even waiting for decision in the suit. It is also stated that the parties in the suit and the M.L.O.P., are one and the same and the issues to be decided in the suit and M.L.O.P., are one and the same. If both are decided separately, irreparable loss and hardship would be caused to the petitioners. Hence, the petitioners have come up with the present petition.
3. The respondent filed a counter affidavit refuting the allegations made by the petitioners. It is averred therein that his father and mother had jointly availed the loan of Rs.50,000/- by way of a cheque drawn on Indian Overseas Bank from the deceased Adaikammai @ A.Vedambal Achi and the fifth petitioner herein on 09.01.1992. But whereas on the contrary, the deceased Adaikammai @ A.Vedambal Achi and the fifth petitioner herein had forcibly insisted them to execute the registered mortgage deed for an excess amount of Rs.60,000/-on 09.01.1992. It is also alleged that the petitioners are not in the habit of issuing receipts whenever the interest amount was tendered by the father of the respondent. As the petitioners failed to issue receipts, his father asked for the full settlement at once. While so, the petitioners herein demanded huge amount with an exorbitant interest in violation of the Tamil Nadu Money Lenders Act, 1957 and also Tamil Nadu Prohibition of Charging Exorbitant Interest Ac
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