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IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. ANAND VENKATESH, J.
Integrated Finance Company Limited, Chennai - Appellant
Versus
Kasthuri Renga Ramanujam Cotton Mills (P) Ltd & Others - Respondent
Civil Suit No. 637 of 2009
Decided On : 15-12-2021
Code of Civil Procedure, 1908 - Order XXXIV Rule 1 - Limitation Act, 1963 - Article 62 - Negotiable Instruments Act, 1881 - Section 138 – Dishonour of cheque for insufficiency of funds in accounts - Mortgage suit has been filed by Plaintiff against Defendants for recovery of a sum along with interest and in default of payment of said amount, to bring for sale mortgaged property and apply proceeds of sale towards payment of principal and interest - Whether hire purchase agreements, in respect of machineries listed in plaint schedule I 'A' to I 'E’ respectively, allegedly executed by defendant in favor of plaintiff are genuine, true, supported by consideration and valid - Held, there is a lot of suspicion with regard to mortgage deed which forms basis in present suit - First mortgagor in the mortgage deed and first executant of Power of Attorney document was not even alive on date when these documents are said to have been executed and registered - There is also an added dispute with regard to signature found in these documents - This is apart from fact that there is a material discrepancy between original document and certified copies with respect to both the mortgaged property and mortgage amount - On appreciation of available evidence, Court finds that mortgage deed is highly suspicious and cannot be relied upon - There is yet another justification to come to such a conclusion - Basis of mortgage deed is five hire purchase agreements which formed basis of liability alleged by Plaintiff against Defendants - Court has already found that all five agreements are bad in law and hence consequential document namely, mortgage deed must also be held to be bad and it cannot stand independently - In view of this finding, Court holds that mortgage deed is not genuine and Plaintiff Company is not entitled to any relief based on the said mortgage deed – Petition dismissed.
JUDGMENT :
(Prayer: Civil Suit has been filed under Order XXXVII Rule of O.S.Rules r/w Order XXXIV Rule 1 of Code of Civil Procedure, praying to pass a decree and judgment against the defendants:
(b) that, if the said proceeds shall not be sufficient for the payment in full of such amounts, the defendants may be ordered to pay the plaintiff the amount of deficiency with interest thereon @ 36% per annum until realization;
(c) that, for that purpose, all proper directions may be given and account taken by the Court;
(d) to direct the defendants to pay the plaintiff the cost of the suit;
and
(e) pass such further or other orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.
1. This mortgage suit has been filed by the Plaintiff against the Defendants for the recovery of a sum of Rs.8,17,28,388.28 along with interest and in default of the payment of the said amount, to bring for sale the mortgaged property and apply the proceeds of the sale towards the payment of the principal and interest.
2. The case of the Plaintiff is that they are carrying on with the business of hire purchase and leasing of machineries. During the course of their business, the first Defendant Company is said to have approached the Plaintiff for financial assistance for purchase of various machineries under hire purchase facility. Pursuant to the same, the parties had entered into five hire purchase agreements and the details of the same is extracted below:
| S.No. | Date | Hire Purchase Agreement No. | Amount Financed |
| 1. | 31.03.1998 | HPA NO. 97MAA00353 | 27,40,000/- |
| 2. | 31.03.2000 | HPA NO. 99MAA00265 | 18,17,782/- |
| 3. | 27.09.2001 | HPA NO. 01MAA00089 | 31,00,000/- |
| 4. | 18.03.2002 | HPA NO. 01MAA00151 | 17,25,000/- |
| 5. | 27.09.2002 | HPA NO. 02MAA00023 | 54,32,500/- |
3. The further case of the Plaintiff is that the Defendants defaulted and were irregular in the payment of the monthly installments. In order to secure the outstanding dues under the five hire purchase agreements, Defendants 2 and 5 are said to have mortgaged their property by means of a simple mortgage dated 30.09.2006 which was registered as Document No. 5563 of 2006. That apart, the Defendants also executed an irrevocable power of attorney dated 15.09.2006 and appointed the Managing Director of the Plaintiff Company as the agent. This document is also said to have been executed more in the nature of a security.
4. The further case of the Plaintiff is that the Defendants sought for 12 months’ time for repayment of the outstanding amount. However, the amount was not repaid and hence legal notice was issued to the Defendants and in spite of the same, the repayment was not forthcoming. As a result, the present mortgage suit has been filed.
5. The case of the Defendants is that the fourth Defendant was doing a business in the name and style of M/s. Revathi Plastics at Coimbatore. At that point of time, she had entered into a lease agreement with the Plaintiff on 11.11.1994. It is alleged that some monies became due and payable to the Plaintiff and that several documents were executed by the 3rd and 4th Defendants in order to secure the repayment. The amount was not able to be repaid and in order to clear the dues, cheques were issued by the 1st Defendant, signed by the 3rd Defendant as the director and it was issued on behalf of the said Revathi Plastics. The cheques got dishonored and it r
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