IN THE HIGH COURT OF JUDICATURE AT MADRAS
PUSHPA SATHYANARAYANA, J.
Sree Vadivambigai Ginning Industries Pvt. Ltd. & Others – Appellant
Versus
Tamil Nadu Mercantile Bank Limited – Respondent
Second Appeal Nos. 736 & 737 of 2009 & 355 & 356 of 2010 & M.P. No. 1 of 2009 & M.P. Nos. 1 & 1 of 2010
Decided On : 28-04-2015
Indian Contract Act – Section 171 – Suit for mandatory injunction – Plaintiffs, group of Private Limited Companies, filed the suit for mandatory injunction directing the defendant Tamil Nadu Mercantile Bank Limited to return them the schedule mentioned documents within a stipulated period. – Held, Court have perused Ex. B.1. Clause 32 of the said report relates to balances from concerns in which two directors are interested and also the closing balance in their accounts as on 31.3.1999 together with maximum outstanding at any time during the year – The outstanding during the relevant year of the companies under the same Management are mentioned there. Plaintiffs 1 to 3 are said to be the Companies under the Management of Sree Vadivambigai Textile Mills Limited – It was pointed out that it is only the outstanding, at any time during the year, of the plaintiffs companies that were shown under Clause 32 of Ex. B.1 – The mere mention of the same would not bind the plaintiffs to pay the outstanding of their sister concern – As such, this point also finds favour with the plaintiffs. – Judgment and decree of the Lower Appellate are wholly unsustainable and they are liable to be set aside – The substantial questions of law are answered accordingly – Second Appeal Allowed
1. By this common judgment, this Court proceeds to decide the above four appeals, which are inextricably interconnected with each other, arising out of similar and common questions of law and facts.
2. For the sake of convenience, the parties are referred to hereunder according to their litigative status and ranking before the trial Court.
3. In these appeals, both the plaintiffs as well as the defendant have called in question the legal sustainability of the judgment and decree 04.12.2008 passed by the learned Subordinate Judge, Pollachi, in A.S. Nos. 47 and 48 of 2008 filed against the judgment and decree passed by the learned District Munsif, Pollachi, in O.S. No. 178 of 2006.
4. The plaintiffs, group of Private Limited Companies, filed the suit for mandatory injunction directing the defendant Tamil Nadu Mercantile Bank Limited to return them the schedule mentioned documents within a stipulated period.
5. The factual expose which arise for disposal of the present appeals are as follows:-
(a) The plaintiffs, who have obtained a loan of Rs.37,27,000/- from the defendant Bank on equitable mortgage by depositing the title deeds, claim to have promptly repaid the loan as early as on 28.7.1998 and 17.8.1998. It is stated that the defendant also closed the account and issued “No Due Certificate” to them on 19.6.1999. Thereafter, when the plaintiffs approached the defendant Bank for return of the title deeds deposited with them at the time of obtaining the loan, the Bank was delaying in returning the same inspite of assurance to give back the title deeds. Hence, the plaintiffs issued legal notice on 22.7.1999 for which a reply was received by them on 10.9.1999 from the defendant stating that the said documents could not be returned as another Company, which is alleged to be a sister concern of the plaintiffs, viz., Sree Vadivambigai Textile Mills Limited at Sivaganga, had obtained loan from the Madurai Branch of the defendant Bank and since the outstanding was not paid by them, the documents deposited in the Pollachi Branch, by the plaintiffs were withheld as general lien over the documents. As the mortgages were discharged and the documents were not returned by the defendant Bank, the plaintiffs filed C.O.P. No. 214 of 1999 before the District Consumer Dispute Redressal Forum, Coimbatore. However, the Original Petition was dismissed. Aggrieved by the non-delivery of title deeds despite all payments, the plaintiffs preferred to file the suit O.S. No. 178 of 2006 for the relief of mandatory injunction.
(b) The defendant Bank, inter alia, contested the suit on the ground that the documents could not be returned as the same are held as general lien towards the liability of Sree Vadivambigai Textile Mills Limited, which is the sister concern of the plaintiffs.
(c) The plaintiffs also filed a reply statement contending that the said Sree Vadivambigai Textile Mills Limited is a separate entity in the eye of law and the documents furnished by them towards the loan obtained from the Pollachi Branch of the defendant Bank cannot be retained as collateral security for the outstanding due by their sister concern to the Madurai Branch of the defendant Bank. The plaintiffs also contended that having issued “No Due Certificate”, the retention of the documents with the defendant Bank is unlawful and hence, prayed for return of the documents.
6. Before the trial Court, one Subramanian, partner of the second plaintiff was examined as P.W.1 and Exs. A.1 to A.12 were marked. On the side of the defendants, one N. Sivasubramaniam was examined as D.W.1 besides examining one Pawnraj Rajkumar as D.W.2 and Exs. B.1 to B.7 were marked.
7. The trial Court, on consideration of the documents and the arguments advanced by the learned counsel for the parties, decreed the suit in part directing the defendant Bank to return the plaint schedule document Nos. 1, 2, 8 and 10 to the plaintiffs within a period of one month from the date of decree. The trial Court al
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