JUDGMENT :

(P.B. Balaji, J.)

(Prayer: Original Side Appeal filed under Order 36 Rule 1 of the Original side Rules read with Clause 15 of Letters Patent against the judgment and decree dated 30.06.2011 made in C.S.No.237 of 2005 and dismiss the suit in C.S.No.237 of 2005.)

1. This intra Court Original Side Appeal has been preferred by the 1st defendant, aggrieved by the judgment and decree dated 30.06.2011 made in C.S.No.237 of 2005 on the file of Original Side of this Court.

2. The 1st respondent as plaintiff filed the said suit in C.S.No.237 of 2005 for recovery of a sum of Rs. 57,99,700/- together with interest at 18% p.a on Rs.25,00,000/- and also prayed for a preliminary mortgage decree with further prayer to bring the property to sale by public auction in the event of default committed by the defendants in payment of the decree amount and for a personal decree against the 3rd defendant in the event of the sale proceeds not being sufficient to satisfy the decreetal amount.

3. It is the case of the plaintiff/1st respondent that the 1st defendant company represented by its Chairman and Managing Director Mr.G.Venkateswaran, approached the plaintiff firm in October 1999, seeking financial assistance to the tune of Rs.25,00,000/- offering the property of the 2nd defendant as security. The plaintiff agreed to the request of the 1st defendant and lent a sum of Rs.25,00,000/- by executing a bond dated 20.10.1999, which was executed by the Managing Director of the 1st defendant company and the original title deeds of the property offered as security were also handed over to the plaintiff and thereby an equitable mortgage stood created.

4. It is the further case of the plaintiff/1st respondent that even subsequent to the said transaction, the 1st defendant company was in the habit of borrowing various amounts to the tune of several lakhs on various dates from the plaintiff and was also paying interest promptly. Further, it is also stated that additional collateral security was also given by the 1st defendant since the borrowing became huge and another property of the 2nd defendant was given as collateral security. The 3rd defendant is the wife of the Chairman and Managing Director of the 1st defendant and the said 3rd defendant stood as guarantor in her personal capacity for the amounts borrowed by the 1st defendant company. It is the specific case of the plaintiff/1st respondent that repayments were only through cheques issued by the appellant/1st defendant company.

5. The plaintiff/1st respondent further contends that the 1st defendant used to repay monies every now and then and the total outstanding got reduced and therefore, the 1st defendant requested the plaintiff to return the original title deeds pertaining to ground and first floors of the mortgaged property, retaining the title deed pertaining to the second floor which would adequately secure the amounts due to the plaintiff.

6. The plaintiff/1st respondent further stated that as of April 2003, the 1st defendant company was due and payable a total sum of Rs.46,60,000/- towards principal and interest, in respect of which 95 post dated cheques were issued totalling in all Rs.46,60,000/- towards discharge of liability of the plaintiff. It is also pleaded that the Chairman and Managing Director, Mr.G.Venkateswaran committed suicide on 04.05.2003 and the plaintiff was in dark as to how the monies due to them could be recovered, especially since it was belatedly known to them that there were several other claims against the 1st and 2nd defendant companies. In this factual matrix the suit came to be filed.

7. The 1st defendant filed a written statement denying liability to pay the suit claim. Paragraphs 3 and 4 of the written statement are extracted herein below:

“... 3. This defendant is maintaining regular books of accounts. From the records of this defendant it is found that there was no entry in the account books that the plaintiff had advanced amounts to this defendant. Moreov